Burlap and Babies: budgeting 101 | the great plastic lockdown

At the beginning of this month I shared about how we're cracking down on our spending and doing our best to save everything we possibly can. If you missed that post, you can read about it here. Today I'm going to share how I manage our budget every month to help us do that...

The last few days of the month I buckle down on my budget and see how we can cut further than the prior month. I'll admit it isn't easy watching our budget so strictly and most months it sucks not getting everything we want!! But I know that, like the fantastic Dave Ramsey says, "Live like no one else, so we can live like no one else." And it's so true! How many couples buy a home one year out of college and have no other debt except a mortgage payment?! Love it!! And the only way that has been possible is by cutting back, living frugally, and enjoying life with little extra froofs.

Financial Peace
While we were engaged we chose to go through Financial Peace University at our church to get a handle on our money before it got out of control. The biggest change we made was we went to a cash only system. So besides bills, we pay with cash only. Or at least we try to. (Hence, the great plastic lockdown -- trying to get that unnecessary spending controlled again.)

How Do We Do It?
Besides the necessary expenses (i.e. mortgage and utilities) we budget monthly for gas, groceries, eating out, and then fun money for each of us individually and together. If we're planning a vacation in the future then we may put money away each month for that. Typically though, anything left gets transferred to savings at the end of the month.

Below are some answers to questions we hear from our friends when we start talking about why our budget is so much lower than others and how we do it.

When do we get new clothes if it isn't in the budget? Neither of us are big shoppers. So if I know I need new jeans or the season is changing and I know I need another pair of shorts, I'll budget that in for the following month and just cut money from another category.

What about oil changes for the car? What category does that go in? Again. Like the clothes category we budget it as needed. Why budget for it every month when you can just look at the little sticker in the top corner of your front window shield and plan that way?

Every few months I'll take a look at our regular expenses and see which utilities are high and figure out a way to reduce it. Whether that means calling the electric company or doing a google search on how to save water, I figure it doesn't hurt to try.

Below is a budget printable I made special for you, my readers! You can download it here. I love making my budget specific to me, so if you want a budget with specific categories for you and your family, shoot me an email and I can send you a budget update personalized for you.

The Process
I budget everything in a spreadsheet because yes, I'm a spreadsheet nerd and I am not afraid to admit it. I copy over the prior month's budget so I have a starting out point with all the figures from before. Why reinvent the wheel when it's not necessary? As I receive bills, whether that's in the mail or email, I put in the figure for that upcoming month. A few days before the end of the month I'll think back over the past month and see how we did and if I need to make any adjustments in those fluctuating categories (like gas, food, fun money, etc). The goal is to budget to zero. Fill in all of your expenses, add them up, and then subtract that number from your total income for the month to budget what you will save for the month.

One dilemma we had to overcome was how to budget for expenses that are paid irregularly. For example, we pay for car insurance twice a year. So what we do is take the total that we pay bi-yearly, divide it by 6, and budget that amount every month. Then I have my spreadsheet set up to automatically add that amount to be transferred into savings monthly to wait for the bill to come. Then we aren't caught in a surprise twice a year with a big bill that we don't have money for since we already put money away for it every month.

Envelope System
On the first of the month, I'll look at my budget and withdraw everything that is budgeted for cash only. I then divide that cash accordingly in my cash folder that will be explained in a future post.

I hope this helped give you a little insight into our budgetting system. If you have any questions on my process or how you can trim down your budget, feel free to shoot me an email at burlapandbabies@gmail.com or leave a comment below.