This budget considers that your housing and other bills will be deposited into your checking account and paid by check. Your household money will be cash and your savings will be deposited in a savings account or an investment account. Your crisis fund will be deposited in a simple savings account for quick withdrawal if needed.
In order to get everything down on paper in the rough, go to the Budget Worksheet. There you will find spaces with the categories listed at the top. Using the sample list at the bottom of the form, start entering your bills in the spaces provided with the amount of that bill next to it. This will be relatively simple for your housing expenses and other bills, however it will take some time to fill in your household expenses. This category is for things that you spend money on between paydays such as groceries. Be sure to consider all of the possibilities.
When you feel certain you have entered everything on the form, transfer this information to the Budget Form. This form is setup with five tables. The first is your expenses not including savings. The second is for your income. Remember to only consider take home income as your payroll deductions are not income that you can use.
The next table is used to determine how much savings you can allow after all of your expenses are considered. This savings will be split up between your long term savings and your crisis fund.
The next cagegory is to compare your budget with the ideal percentages for each category. This is mainly for information, however if you have less than 10% for your savings, you may want to see about cutting some expenses in other categories. And finally, there is a table to distribute your paycheck by the week and month.
Now you are ready to go to the Monthly Bill Summary. This is where you will be able to see at a glance what bills have been paid and what you have left to pay. You will need to complete one of these forms for each month.
After you have written the month in the space provided, you can complete the first three columns at the beginning of each month. I would suggest that you fill in all of your re-occuring bills, print the form and then make several copies. You can list any other bills you have below that. That will save you time later. Then as you pay each bill, simply enter the date paid and the check number next to the corresponding bill. There is also a space to put any comments you might have about that bill.
Now to Page 2 of the Monthly Bill Summary. This form will allow you to pay an equal amount on bills each payday. It will take some time to determined which bills to pay on each payday. You will need to ensure that the payday you put that bill in will be paid on time. If you get paid weekly you will need to use all four tables. If you only get paid every two weeks, only use paydays 1 and 2 and so on.
Once your budget is established, maintaining it will only take a few minutes each payday. When you receive your paycheck, simply deposit the money you allowed for bills into your checking account and pay the bills you have for that payday. On your Monthly Bill Summary, enter the date paid and the check number next to the corresponding bill. Around the end of each month setup your Monthly Bill Summary for the next month. That's all there is to it.
Your budget is based on your current spending habits. If you have plenty of money to cover everything, you need do nothing more. However, if you are finding it hard to cover all of your bills and expenses with your paycheck, you probably need to cut back on some items. By visiting the Budget Stretcher home page and subscribing to my newsletter, you can start finding new ways to cut your expenses drastically. Besides the tips and ideas you will get at Budget Stretcher, I have links to hundreds of sites that will help you cut your expenses. All of this information is absolutely FREE.
Bill Organizer
Keeping track of your bills each month can be a headache. How to organize your bill paying and keep track of those receipts, canceled checks, loan papers and other important paperwork isn’t easy and isn’t fun. This section is designed to make that job easy. I can’t do anything about making it fun.
Below is a list of supplies you will need:
1 - Three Ring Binder 1 ½"
3 - Document Protectors(Designed to insert in 3 ring binder)
15 - Pocket Dividers
1 - Write on Tab Divider
SETUP
Step One: Open your three ring binder. Insert your pocket tab dividers. In front of the pocket dividers, place 1 Write on Tab Divider. The Write on Tab Divider is designed to provide
support while you are writing on the Monthly Bill Summary.
Step Two: After you complete your Budget as outlined in the text, label the dividers. Start by labeling the first divider, Bills to be Paid. Then label the rest of the dividers with the names of your bills. See the below sample:
Divider Tab's Labels
| Bills To Be Paid |
House Payment |
Car Payments |
Utilities |
Telephone |
Continue this until you have a divider for each bill. If you don’t have enough dividers I suggest that you combine similar bills. This could be all car payments, utilities or credit cards.
Step Three: Place your Budget Form, Monthly Bill Summary and Page 2 of the Monthly Bill Summary in the document protectors. Then place them in the three ring binder in this order:
Monthly Bill Summary (this will be the first form you see when you open your binder)
Budget Form
Monthly Bill Summary Page 2
USING YOUR BILL ORGANIZER
Step One: Gather all of your bill statements and payment books and place them in the pocket divider labeled Bills to be Paid. This is where all the bills are to be placed when you receive them.
Step Two: On payday, look at section 2 of the Monthly Bill Summary to determine which bills need to be paid that payday. Write out your checks for these bills and get them ready to mail. On the statement for each bill or in your payment book, write the check number and date paid.
Step Three: File all statements in the pocket divider corresponding to that bill. When you receive your bank statement and after you reconcile it, also put the canceled checks in the pocket divider corresponding to that bill. File any correspondence in these pocket dividers.
When you have The Complete Budget and Bill
Organizer setup and start using it regularly, don't be afraid to make changes. Try to put as much away in savings as you can afford. Your Crisis Fund is the key factor in making your budget work. It is designed to eliminate the use of credit cards for unexpected bills. If you use credit cards and don't pay them off each month, that this is one of your major expenses.
Other Important Files
First, there are really four types of files. Personal (bill receipts, etc), tax files (any paperwork that is required for taxes), long term files (mortgages, car contracts, or any other contract) and important papers (will, birth certificates, etc.)
Personal files are the files mentioned in the Bill Organizer. At the end of the year, if the files aren't too thick you can consolidate them into one folder labeled with the year. Examples of things in this category are: monthly insurance statements, credit card statements, mortgage receipts, and any other monthly statement. KEEP THESE RECORDS FOR TWO YEARS.
Tax files can be filed in a folder or accordian folder. These items include: W2 forms, 1099 forms, All tax forms with attachments and any other form that you receive that must be reported on your taxes. KEEP THESE RECORDS FOR THREE YEARS. It is best to keep your previous years tax forms plus the three years before that. The IRS only audits back three years. You can destroy older files.
Long Term files include your mortgage or lease agreements, notes on car purchases or any contract that is still in effect. Keep these files in a safe place. KEEP THESE FILES AT LEASE UNTIL THE AGREEMENT HAS ENDED. MY SUGGESTION IS TO KEEP THEM FOR FIVE YEARS AFTER THE AGREEMENT HAS ENDED.
Important papers should be kept together where you can lay your hands on them quickly. You might want to use a safety deposit box or at least a locked drawer. These items include: wills, deeds, trusts, stock certificates, birth and death certificates and any other extremely important document. KEEP THESE FILES INDEFINITLY.
|