Budgeting in Tough Times Master Your Budget

Preparing A Zero-Base Budget for September

The bills have been paid for August – it’s now the 29th. Pension check will be received in another day or so. To prepare s zero-base budget for September you enter the balance you are carrying over from the previous month (August) and any monies you receive on the first of each month, if any.

Retired? Start with Your Pension Amount

In my worksheet I start with my pension amount at top of the income portion of the sheet, then I post payments for the current (fixed) costs which I make it a point to pay each month for basic essentials. These fixed costs I need up to date include, but are not limited to, mortgage, property rent, utilities, food, etc. This way I ensure my basic needs are met as the new month commences.

Supplementing Your Income

However, other incidentals come along and you need to account for those as well. DO NOT rely on credit to meet these needs. In doing that you set yourself up for stress and frustration, sometimes even tears, fortunately I still hold a part time job as a waitress. Just a day or two a week can make a lot of difference.

List out ALL your credit accounts from lowest to highest and post it over your desk where you work on your budget. To the left of the credit name you should put the due date for each one, and then to the right put the total amount you owe. Once you have that done, put the MINIMUM you must pay each month to keep the account current to the right of the total you owe. Total up ALL the minimum balances due for the month – this is what you need to supplement your income to keep your creditors happy.

In Case Emergency Strikes…

Now that your main bills are paid for the month, and the minimum payments have been met on all your credit accounts; take a moment to put cash into a separate account, preferably savings, and RESIST TEMPTATION to touch it. This is an account if you DO touch, you MUST replenish. This is crucial and is the first baby step towards success. Dave Ramsey, the founder of Financial Peace University, says we need to set our initial goal to have $1,000 in this fund for starters – I lean more towards having $2,000 for greater peace of mind.

If you put just $25.00 a month into this account from supplemental income or after all your fixed expenses have been met and minimum credit accounts paid for the month – you will have achieved $300 in this by year-end. Though small, this will get you into the habit of saving. The chart shows how the more you set as your monthly investment in yourself the faster you will get to either $1,000 or $2,000.

Well, It’s Time to Give Yourself a Pat on the Back

As you see it takes time to learn to live within your means, and you will master this skill over time until it becomes second nature. We must learn to do things differently in life, and find new ways to amuse ourselves that steer us away from those deadly credit cards. If you didn’t noticed by purposely managing our funds so you put a little away in savings each month, you are not just living WITHIN YOUR MEANS, YOUR ARE LIVING BENEATH YOURS MEANS.

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