Yesterday I addressed the issues of budget organization and variable expenses. If you missed it, you can see it here. Today I am going to explain how we deal with fixed expenses and bills, what happens when we go over budget, and the goals for our budget.
For our fixed expenses/bills, we do not use envelopes. I do not believe a credit card company or phone company would be too happy if we sent them a payment with cash.
The Hubs gets paid every other week and I get paid once a month. Based on when we get paid is when we pay our bills. For most months our paychecks come in this order: Hubs gets paid at some point in the first week or so of the month, I get paid in the middle, and he gets paid near the end of the month. The days do move around a bit, but for the most part that is how it falls.
We have 3 bills that are due near the beginning of the month (by the 10th or 15th of the month). We have our utilities (electric, water, trash), internet service, and gas payments. Our internet service really is a fixed expense. It is the same each month. Our utilities and gas change monthly.
For a bill that is truly fixed, such as the internet service, I just pay the bill each month using my online banking. I make sure to schedule the payment at least 4 or 5 days before it is due.
For a bill that changes, such as utilities and gas, I have a certain amount that is set aside for that bill. If it is under the amount, then whatever is left over is put into savings. If it is over the amount, I pull what it is over out of savings to cover it.
When I get paid on the 15th, we pay the bulk of the other bills: car loan, credit card, 1 of the student loans. Those bills are ones that I actually plug into online banking to pay. We also have some automatically withdrawn bills that are taken out at some point after the 15th: Netflix, Backblaze (my online back up program), 1 student loan, car/renters insurance, and Directv. I like these bills because they automatically come out and I don’t even have to think about it.
Finally, when Hubs last paycheck comes near the end of the month we have 3 more bills to pay: phone bill, 1 student loan, and rent.
One of the other expenses that we have is our savings account. We aim to put in at least $300 each month. Sometimes it is great! And sometimes it is really a struggle.
*My favorite months are July and December because my husband actually gets paid 3 times in those months because of how the weeks fall. Yay for extra money!
Here is a break-down of our budget for our fixed expenses/bills:
Internet: $71.34- fixed, never changes
Car: $519.03- fixed, never changes
Student Loan: $161.90- fixed, never changes
Netflix: $7.99- fixed, never changes
Credit Card: $200.00 (This is our current snowball, so anything extra goes here)
Student Loan: $283.31- fixed, never chanes
Backblaze: $5.00- fixed, never changes
Student Loan: $50.00- fixed, never changes
Rent: $790.00- fixed, never changes
Car/Renters Insurance: $100.25- fixed, never changes
What gets me super mad is that when I look at this, I realize we are paying at least $1,200/month to debt. Imagine what we could do with that kind of money. We would have a hefty down payment for a house in no time!
We are not perfect. There are times when things come up and we do go over budget. If it is on a bill, then we pull what we need from savings and cover it.
There are sometimes that I don’t feel like cooking, but we don’t have any more eating out money. I will ask Hubs if he would mind if I took some money from another envelope to cover a dinner out. Usually it comes out of the entertainment budget. He is usually ok with it because if he said no, then we wouldn’t have anything for dinner.
Sometimes we have things come up that are not written in our budget. For example, I had to order checks the other day because I only have one left. I ordered them, pulled the money from our savings and covered it. I used to have a very bad habit of just rounding up how much I needed and transferring that over to cover the cost. (When I say rounding up, I am talking to the nearest $10 or so… If something cost $16.35, I would transfer over $20. Not smart.) Now, when I transfer over to cover, I transfer over the exact amount. I realize that some people would just recommend to have a miscellaneous category to cover these things, but I don’t like that. I would rather just have the money in savings earning some interest (probably a measily $0.00005) than just sitting in our checking account where it is more tempting to use.
Obviously our main goal is to stay on budget. This is a lot easier to type than to actually do. Part of this goal involves a smaller goal: to put everything into our spreadsheet each week. I am getting better since it is weekly. I really sucked at putting in expenses at the end of the month.
Another goal is to get rid of our debt! We are working on getting the credit card paid off as soon as possible. We are almost half-way there and to see my tracker go over the half-way point (hopefully next month) will be awesome! Once that gets paid off, we will focus on the student loans. I am not too concerned about the car loan because it’s 0% interest. I am hoping to be out of our current debt by the time I am 30! That is in a little less than 3 years. I really think we can do it! (I say current debt because I am getting ready to go back to get my masters and will be taking out more student loans. I know that Dave Ramsey would be very disappointed, but my masters will increase my salary.)
Another goal (down the line) is to save up some money for a down payment on a house. My parents will be helping with some of the down payment, but I would like to save up another $10,000 at least to add to it.
So, that is basically our budget breakdown. We don’t make the most money, but we also don’t make the least money. We are right in the middle and we are pretty happy with where things are at right now.
Who does your budget? Do you have a spreadsheet or a program that helps?