Balancing Money – Step #1
I am so glad you are excited to read more about My Balancing Money Series! This could turn out to be something pretty cool! 
In short, the plan is this . . . Pay all of my monthly expenses and commuting costs and give myself a small weekly allowance. The allowance is step #2 so I will have more on that later. After ALL of this is taken care of, any money that is left over at the end of the month will go into a separate account called the Balancing Val Account. I will try my best not to take any money out of this account but I am certain that the random nature of life will cause me to do so. I will give a monthly update balance on the account as well as what came out of it for what reason (haircut, oil change, gifts ect.). At the end of school, I will see how much I have saved to hopefully make a big dent in my student loan!
STEP #1: WHAT DO YOU OWE?
In order to find out what you may be able to save, you MUST know exactly how much is going out each month. This is SO important whether you have a saving situation or not!! These are my fixed expenses for every month no matter what. Keep in mind that Chris and I split everything 50/50. I am not counting the things that come up at random, because well . . . they are too random to know what and how much. I will have a separate plan of action for those things.
Val’s Monthly Fixed Expenses
- Rent – $425
- Cell Phone – $74
- Auto Insurance – $121
- Groceries – $100
- Apartment Bills/Utilities – $100
- ING Savings Account – $50
- AT&T 3G Service – $15
- Sallie Mae – $25
- Commuting Costs (includes gas) ~$355
TOTAL: ~$1265 per month
Now I know that $1265 is the magic number. That is the MINIMUM amount of money I need to make each month to have all my bills paid without ANY other expense. Im sure I can do some tweaking here, but I know that this is comfortable, at least for now. Just knowing this number will help me understand how many hours I need to work and will help me calculate how much money I can use for myself which is what I plan to tell you about in my next post.
Do you know exactly what you owe each month? Or do you just wing it?
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9 Responses to Balancing Money – Step #1
There was a great article about paying yourself first at getrichslowly the other day. (http://www.getrichslowly.org/blog/2010/11/04/how-to-save-putting-pay-yourself-first-into-practice/)
It suggests putting your entire paycheck into a savings account and then paying yourself a stipend (for lack of a better word) for rent and other expenses. Then, what is left over is already in a savings account, and if it’s in ING it will be relatively high yield or even my bank (capital one) has a savings account that is 1.3% interest. I use ING mostly because it’s harder to get to my money quickly, so I’m less likely to spend it.
This is a great idea!
I signed up with ING not too long ago, and I have 2 $25 transfers set up each month that just come out like a regular bill. I would love to increase this amount, or deposit all into savings and only take what I need, but I’m not sure how much exactly commuting costs are going to be just yet. Plus if I need something for an emergency it does take a few days to actually ‘get’ the money which is good and bad. For now, I will be transferring my ‘balancing val money’ into my regular bank savings and then once it builds up, I can transfer a chunk of it to ING.
all you spend on groceries is 100 bucks?! how do you do it?
Oh no no no!
Lol, we spend $200 a month. That’s just my half I put in. We tried doing $160 a month for a bit, but it just turned into us going out to eat and spending even MORE money because there was no food in the house! Lesson learned.
I would like to post soon about the whole grocery budget thing.
I usually just wing it.. but I really like the idea of adding it all up and knowing EXACTLY what my fixed expenses are. I think starting in December I’ll start doing this.
Can’t wait for the next part of the series!
Very cool!
I’m telling you, once you add it all up and then know that what’s left over is all yours . . . It’s an awesome feeling!
Let me know how it goes.
O_o
I live in the wrong state if all you pay for groceries each month is $200.
We’ll have to redo the budget when we move next month. I like the idea of a budget because I know everything will be paid and I can still save at the end of the day.
I think its pretty decent for groceries around here. I could only imagine what your budget is in Alaska!
Let me know how it works out for you, I have an exciting adventure coming up and maybe you would like to contribute to it?
I could only imagine how expensive it is in Alaska!!
Let me know how the budget thing works out. Maybe you can contribute to a special project im devising?