Okay it is time to get down to some serious business. I have a confession to make before I get into this post: I can not budget. There I said it! whew, glad I got that off my chest If you haven't already guessed the B word I am referring to is BUDGET. I know that there is a lot of information out there, but if you are like me most of it doesn't make a whole lot of sense. Well today I had a breakthrough!
I guess my major problem was that I never really knew how much of your money should be allocated for each area of your budget. I mean I know what I have been spending on groceries for our family of three ( I am fairly sure that I could spend less but that's another post for another day.) The hubby and I would really like to cut our expenses, save for our first home, and have some freedom to do fun stuff, travel back to Michigan to see our families, etc. So I started searching the internet YET AGAIN, to see if I could discover the answers.
In January I know that our church is offering Dave Ramsey's Financial Peace University and I am so, so excited! This is a faith based program that a lot of people I know have used and really love. The main points of the program however are things that we all can use regardless of faith; cutting debt, making and using a budget, and really obtaining freedom from your finances.
So here is what I found and what I am going to start using to try and get some control over here in our house.
Deborah Fowles over at About.com gave these recomendations:
Click Here for her original post.
- Food at home 7.7%
- Food away from home 5.4%
- Alcoholic beverages 1.0%
- Total food and drink 14.1%
- Housing 32.9%
- Apparel and services 4.0%
- Vehicles 9.1%
- Gasoline and motor oil 3.3%
- Other transportation 6.7%
- TotalTransportation 19.1%
- Healthcare 5.9%
- Entertainment 5.0%
- Personal care products and services 1.3%
- Reading .3%
- Education 1.9%
- Tobacco products and smoking supplies .7%
- Miscellaneous 1.5%
- Cash contributions 3.4%
- Personal insurance and pensions 9.9%
- Groceries & eating out 14%
- Housing 30%
rent or mortgage, utilities, and insurance - Apparel and services 4.0%
- Total Transportation 20%
Car payment & Gas - Healthcare 6%
Co-pays, deductible, Over the counter medications etc - Entertainment 5.0%
- Personal care products and services 1.3%
- Miscellaneous 1.5%
- Cash contributions 3.4%
- Groceries & eating out 14%
- Housing 30%
rent or mortgage, utilities, and insurance - Debt elimination 15%
- Total Transportation 20%
Car payment & Gas - Healthcare 6%
Co-pays, deductible, Over the counter medications etc - Savings 10%
- Miscellaneous 5%
Because we have decided to save for a home we are making every effort to cut all other spending and get our credit score up. We have 1 credit card each, I have school loans, and we have 1 car loan. Oh and we have a few medical bills because I have to see a specialist and it's expensive.
After talking with the loan officer at our local credit union she gave us the following suggestions: 1.) Pay off those cards and keep them paid off! 2.) Make payments on the loans ( I am currently in deferment, so I am accruing interest but I don't have to make payments-not a great choice but it needed to be done at the time and now we can start paying them off. I would call this a DON'T btw)
I will be updating you all on our progress in terms of how our budget is working and what I am learning over the next months. Here are the goals that we set, it is important to set goals and make financial decisions as a couple. That way everyone is on the same page and if something (god forbid) happens to one of you, the other person isn't totally clueless about things.
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