Basic Financial Fitness: Making a Simple Budget
We all know that I'm a late bloomer and that I readily admit to it. I was very sheltered growing up, so it seemed to take me longer than others to figure things out. Finances are no exception. Just the mere mention of the words "finances", "budget", or "money" used to incite a sense of panic and some hyperventilating. A few years ago, however, I finally stumbled upon one of the greatest things to ever happen to my household 'budget', and it's this:
You are probably saying, "huh?" and scratching your head in perplexity. It's just a little notebook with birds, flowers, and butterflies on it. Well, it does have a pretty cover, but it's what's inside that is special. Well, at least as far as money, budgeting, and bills go. Here's the inside:
Ta da! I know, exciting, right? Genius, right? It's a pretty little binder notebook with columned pocket-pages that have a page for each month of the year. I've blurred this one out so you can't see my personal stuff, but still allows you to get the gist of the notebook. From here on out it shall be referred to as "the folder" because that's what I've been calling it/them all this time.
Here's an unobstructed view of a blank month (Taken from one of my future folders. Yes, I have a stockpile for the future. See: last photo.):
As you can see, there are four columns that have mirror images on both the left and right sides of the pages. The first column says, "Due Date", the second says, "Expenses", the third says, "Amount", and the last says, "Paid."
If you find budgeting hard and need something simple, listen up. If you don't have the kind of finances that allow for the kind of budget you read about in articles, listen up. If you need a simple way of making sure you pay all your bills in full and on time--in other words, keep track of what you need to be paying--then listen up. It's simple.
I found this folder a few years back, like I mentioned, at the Dollar Tree. Yep, you heard that right, the Dollar Tree. That bastion of cheap, essential, and non-essential items. I saw it and thought, "Hmm, I wonder if I can get my bills in order with this thing?" A few years later, and, yeah, I can say that it did. If you can't find one at the dollar store or any other store, you can buy them online. This is one option at Current, and another at Amazon, where you should be able to find a wide assortment to fit your tastes. Just don't pay tons of money for one.
Now, here's what you do. First, sit down and write down every single bill that you pay, excluding food, gas, and household supplies like toilet paper. After you're pretty sure you've got every bill written down, next write down next to each bill their due date (or approximate due date). Then, write down how much each bill is, if the bill isn't the same each month, no worries. This isn't a standard budget, but rather an organized bill paying method, and I will share what to do there in a moment.
Give yourself a day or two before writing in the folder--trust me on this, I speak from experience--in case you forgot a bill but remember in the next day or two. Then, you're ready to transcribe. So, going in due date order, write in the due date, name of bill, and amount owed. The amount owed on some is static, but for the ones that flucuate, write the due date/approximate due date and name of bill, then wait to put in the amount due until you know.
Towards the end of the month, around the 20th or so, I fill in the coming month's information. Don't fill out all the months in one fell swoop. This is another mistake I've learned not to do. Why? Because bills fluctuate, and if you have to remove or add something later, it can really get messy in your folder. Messy is what we're trying to avoid too much of because it doesn't help you stay organized! ;)
Then, I jot down on the pages, next to the month name, the dates of all incoming money (paychecks, child support, royalties, whatever) so I know what days to open up the folder. Now, to implement your hard work!
1. Don't spend your paycheck before it comes. Ever. Just don't.
2. One of those expenses should be savings. Even if you can only start with $5 a month and work your way up, make it a part of your regular bills. You'll thank yourself for this one day. You can always open an online savings account where you either put the money in on payday yourself, or have it automatically withdrawn. I love online savings accounts because it's "out of sight and out of mind" so doesn't get dipped into or spent like money in your home bank.
3. When payday rolls around, pull out your folder and see what bills need to be paid. These are the ones that will be due now or before the next check comes in.
4. Pay the bills that are due, and then jot down in the "Paid" column the date you paid them. For example:
Due Date: 10/01
5. Keep any receipts or bill paying slips in the pockets. I also keep papers with running balances of my credit cards and savings in there as well, so I can keep track of everything and have it at my fingertips.
6. Close your folder, and put away until next check.
7. Smile knowing you got this under control.
When I've paid the last bill for the month, I make a notation at the bottom like, "Closed: 03/30." That way, I know the month has been taken care of, and when it was.
Here's a photo of 2017's pretty folder:
I'm no financial expert, but I know what it's like to try and keep money-organized on a paycheck to paycheck scenario. People living this way can't always budget like people with more disposable income, so, in my opinion, this is a great way to make sure you pay your bills on time and in full. This is very important and leads the way for good credit scores, saving money, knowing how you're spending your money, and, most importantly, paying bills first before blowing money on wants.
Now, let me address why I didn't add food, gas, or household supplies to my bill folder. Those of us who can't budget like those with more disposable income can't budget in these items, in most cases. After all my bills are paid, I look at what's left in the bank and determine how much I can spend on these three items before next payday. I then sit down and make a list for food and jot down household items I can afford. I also try to put aside a few bucks for fun money for the family, but not every paycheck with allow for this.
A) I cannot reiterate enough, MAKE SAVINGS A BILL. You might not be able to go out for pizza this week, but your bills will be paid and you will have some money set aside for the future.
B) Be disciplined. Pay your bills first, savings next, and everything else thereafter. It makes a difference.
C) You don't have to write down paydays or "Closed: This date" on your folder, that's just what I do, but you're welcome to if you want!
Lastly, these are all suggestions from a non-financial-professional. I'm just a chick who's struggled with money and finances in the past and found an easy way to get myself organized in those areas. If you try this out let me know, somewhere down the road, how this worked out for you.