OK, you are tired of living paycheck-to-paycheck or worse, not even able to manage on what you have coming in, it is time to focus and work on your budgeting skills. Let me break it down into a few easy steps. I just finished paying off everything due this month except for a few items left and have set money aside for food and travel for the remainder of the month. By travel, I basically mean, gas money. So let’s begin…
Where Do You Begin Planning for Next Month?
Realizing that anything comes in now is for next month’s budget, I take my next folder and prepare it for the upcoming month. First things first, make sure you put your summary of debt inside on the front cover for easy reference later. Have your list of bills you are collecting for next month and arrange in four piles – 1-Fixed expenses, 2-Flexible expense,3-Non-essential but fun expenses, and 4-debt expenses. This can just be a list you have made up of all the expenses you paid last month.
Now step away, have a cup of coffee or take a walk. This gives you a chance to come back after remembering you have another bill due next month that you forgot to account for. Once you have the list and piles complete, you are ready to organize your worksheet accordingly.
Organizing Your Worksheet
Everyone’s situation is different. Some may just receive a pension, others get Social Security and still, there are some that get both. This is monthly income so you would have one or two lines at the top under income. I have a free personal finance tool that will make organizing your worksheet easy to do every month.
You may still be working or be supplementing your monthly income with bi-weekly paid part-time work. In this case, you would have three lines beneath the monthly income lines.
Still, yet, you may also get income or money from different sources throughout the month – for those cases, you would have thirty-one (31) lines beneath bi-weekly for that purpose.
Following the income lines, goes your expense lines. This is where you start with your tithing and pay yourself first items; then follow with fixed expenses, flexible and ending with debt expenses. Any funds left over after these categories are paid are carried over to the other side of this simplified budget sheet and you can use that for the non-essentials, fun expenses.
Balancing the Budget
Okay, you notice we just put everything into categories and put a number that must be paid to stay current or make life easy for the month. Now let’s see how we balance – remember income and expenses should zero out at the very least or best, should show extra money available at the end. Extra funds mean you are living under your budget for the next month.
Starting at the top, you will notice we have added one total for all sources of income. All you need is one income total; however, we divided expenses so each carries there own total and did a grand expense total under the last category subtotal.
Now, we add up each of the expense subtotals for one grand total of expenditures. Now let’s put how we net out beneath the grand total for expenditures by subtracting total expenditures from total income expected for the upcoming month.
Hopefully, you got a number that is zero or greater. If it is higher, you can carry that to the backside of your budget sheet or increase any of
your lines above to create a zero balance. This is my personal suggestion! Either choice is okay, and up to you.
Ready to Start Paying When…
Congratulations! You are ready to start paying your bills next month as soon as your check hits your account. If you are still working, and always from retirement, you record your take-home pay as you get it and then pay whatever bills you can by there due date until there is no more funds available. When you get more money or your next check, you continue on and pay the remainder.
If you find you have more bills than money, you need to rethink what you are doing. Perhaps time to take on a second-job temporarily or get room and board from your child who is working and living with you, but if you must wait until the next month – call the company and tell them, and then schedule the minimum due this month with next months minimum FIRST.
If they are aware of your situation, they may be willing to forego any late fees or interest, but they don’t know if you don’t ask them nicely. Be polite and courteous! By doing your next month a week or two early, you give them time ahead to put the arrangement into there system.
Step Back & Reflect
Now that you have finished finagling the upcoming month a few weeks early, sit back and relax – you have earned it! If you are busy like most people, it may help to get a sheet that is all done for you that you just need to fill in – you can get a copy of my customizable monthly budget worksheet FREE by simply clicking the button below and leaving your name and email address. I will send you your free worksheet direct to your inbox. If you don’t see it, check your spam box for Donna’s Wise Budgeting Worksheet.
With my customizable monthly budget worksheet in your budget toolbox, you will be able to budget like a pro and see measurable results in the months ahead as your situation continues to improve every time you sit down to do the next month’s budget ahead. Just click the button below to get your FREE worksheet today and get started being a wise budgeteer by tonight!