Happy Friday! 🙂 Many of you have highly requested a budgeting blog post. So today I am going to do a quick overview of how to make a monthly budget. I am all about finding ways to reduce stress and live a happy life, and making a budget is a huge help with that! So I will list below how my Husband and I make our budget every month and save money.
How to Make a Monthly Budget
- Figure Out Your Monthly Net Income: Sit down and figure out your net monthly income. Write down exactly what you will bring home after taxes. Do not count anything that you might bring in from other sources that isn’t a sure thing.
- Figure Out Your Fixed Expenses: By fixed expenses, I mean anything you have to pay no matter what. For example, you have to pay rent and certain utility bills if you rent an apartment. You don’t have to pay for a routine trip to the nail salon. 😉
- Get Rid of Expenses You Don’t Really Need: Now get rid of any expenses you really don’t need. This could be monthly subscriptions, eating out, too many coffee trips, getting your nails done, etc.
- Think of Large Expenses You Can Possibly Eliminate: Now think about any big expenses that you could potentially get rid of. If you’re a stay-at-home Mom, do you really need a separate car right now? We got rid of my Husband’s car, and we kept mine that was paid off. Boom! That’s a whole car payment that you won’t have to pay anymore for a while! You also won’t have to pay for car insurance on that other car anymore! If you really have something you need to get done, you can always carpool in the morning and drop off your significant other at work.
- Double Check That You Have Cut Out Any Unnecessary Expenses: Now make sure that you have cut down expenses to only what you absolutely need (house payment/rent, utility bills, grocery bills/personal hygiene, what you give to the Church every month, if you go – still need to give to God, house/car insurance, gas for the car, and a reasonable discretionary amount, etc.).
- Think of Ways to Lower the Amount of Your Fixed Expenses: For example, we used to pay about $150 for our AT&T phone bill. Then we switched to Sprint, and we paid about $120. Then our contract ended with Sprint – here is the key way we figured out how to save money: we didn’t renew our contract. Instead, we started using Tello and have no contract. This is not sponsored, and I am honestly sharing how much we love Tello! Now we pay an average of just $18 a month for BOTH of us! If you work from home (this is how we save a lot of money on our bill), you can just use your WIFI all the time. If your significant other has WIFI at work, he/she won’t have to use much data, either! With Tello, we just pay for the data we use and get unlimited text messaging. Also, make sure you are getting the best deal on your TV package (unless you are just happy with Netflix)! Most of the time, different services will offer you a lower rate if you want to end your contract, etc. You can also switch to a cheaper online streaming TV provider like Sling. We ended up getting an offer we couldn’t refuse from DirectTV, so we are with them right now.
- This One is for Bloggers/Small Businesses, etc.: If you’re a blogger, make sure to add an expense amount to your monthly budget for clothing/giveaways, etc. This way you won’t end up spending way more than you expect.
- Subtract Your Fixed Expenses: Subtract your newly created list of fixed expenses from your monthly net income. Now find out how much you have left over.
- Decide What You Need to Do with Remaining Income: First of all, do you have student debt or credit card debt? You need to look at your remaining income and pick out a good amount that you will put towards debt every month. Don’t use all of your remaining income, because you also want to be putting a decent amount in savings in case of emergencies. It should also simply be one of your goals to build up your savings. The more you get rid of any debt you have, the more you can use your remaining income for better things. You will have to be strict with yourself for a while. Getting rid of debt will make you feel so much happier and stress free!
- Take One Last Look at Your Discretionary Amount – I’m a firm believer that if you don’t give yourself enough wiggle room, you will end up worse off than you were before. So make sure you leave room in the discretionary amount for things that might come up. Think of things like eating out/getting fast food (sometimes we grab a $5 pizza), renting/buying a couple movies on VUDU, grabbing something from your favorite store as a little treat, and just reasonable things that you might spend money on. Just keep the amount as low as you can. I know that eating out adds up to a ton of money for a lot of people. So try to limit that to at least once a week.
This is Just an Overview
There are so many things I could go into detail about when it comes to making a budget. For this blog post, I want to just give an overview of how we make our monthly budget. Then I can go into more detail based on what you all want to read more about. 🙂 For example, I also have a grocery shopping routine every two weeks that saves us money.
Side note: If you like the glimpse of the home decor in the picture above, it is from my last blog post! I just decorated our entry table with items from Gordmans, and everything I got was very budget friendly. 😉 It is cozy and functional + it has a modern farmhouse feel! Click here to read the post!
I hope you all have a lovely weekend! Just let me know any other requests you have for a blog post and feel free to comment with any questions or ideas!