The first thing I want you is figure out what your income is.
This is any money that comes in monthly, weekly, daily. For our purposes don't include bonuses unless they are monthly and something you are guaranteed.
For our household we get paid on Fridays. My husband is our income earner and he gets paid every week.
You might have a job, your husband has a job. Then you would want to include both of those incomes.
(If you are all keeping separate money - I want to encourage you to rethink this idea. When you got hitched you became one in the eyes of God and everything should be combined - including finances - well that is just my humble opinion.)
So add up that amount.
That is the TOTAL amount of money your household COULD spend each month! So if you have $2000 coming in you can only have $2000 going out! This is so important!!! If you spend more than you make you are over extending budget and you will never get control of your finances.
This next part is possibly the hardest! I want you to make a full list of all your outgoing bills. Just bills. (Don't include grocery!)
Things on this list:
- car payment
- car insurance
- cell phone
- medical insurance
- credit cards
- subscriptions - netflix
- property taxes
This should be any reoccurring bill. Include quarterly bills as well.
Next on your bills I want you to write the amount due each month. For things that fluctuate pick a high estimate. For example our gas/electric is very high in the summer and the dead of winter but much cheaper in the fall and spring. So I allot $400 a month for the two and if I don't use all the $400 I have a surplus but if it goes to $400 I'm covered for that month.
For quarterly bills figure out the quarterly payment and divide by 4 - that is the amount you need to have each month so the money will be there when the bill is due.
So you should have two lists by now. Your income and bills.
Now add up that total.
Now I want you to take your bill total and subtract from your monthly income.
For our example the income is $800 weekly or $3200 monthly.
Bill total is $2148
So after the bills are paid our budget is left with $1052 a month.
This is where we will stop! Hold onto those papers because next week we will talk more about them.