B-U-D-G-E-T-S Where is my Money
Hopefully you enjoyed the previous Budgets column and you are working your way towards setting up your very own budget!
You have your online account at ABC Bank and are trying to figure out Where……Is……..My……….Money(Say it like the Wheel of Fortune game show and it becomes a little more fun, I repeat, a little.) Now we know we want to have a budget and see where everything goes. While I prefer to use Excel, writing it down on a piece of notebook paper will do the same job, the important part is to physically enter yourself so it’s Real. I’m going to make the assumption that you receive a steady paycheck 2x a month and you know about what your paycheck is going to be. KISS(Keep it Simple Steven). I am going to assume that your take home pay after taxes is $1,000, this will be your first line in the spreadsheet images, shown with the red arrow, the running total, shown with the black arrow, is the same since the only thing we have entered is our $1,000 Paycheck.
Next is the research portion of your first budget, feel free to call it detective work so it’s not so nerdy. Since we don’t know where the money is going we have to see where the money went. That’s where our online account information enters in. There is other ways to locate this information: old statements you rarely keep, hand written checks if you are my Mom and Dad, receipts that you already threw away, you get the idea.
Going with the online account, most banks show 90 days’ worth of activity, which is more than enough to figure out your spending and cross your fingers, savings transactions. My account over this period had a little over 100 transactions, this includes deposits and withdrawals. In the example above we found out that we are paying $570 month for rent and chances are you found this each month through a withdrawal of an ACH electronic payment or a check. You start adding up a few things here and there and guess what you go to the movie every single month and pay $25, now I’m using round figures to make this easy for calculations, but if you spend $18.97 at the theatre, put that in there we are trying to be as accurate as possible on our first go at this, it will only make things easier the next time you sit down……WAIT THERE’S A NEXT TIME? Well I hope so, but let’s not get to far ahead…………….
Congrats our detective work is done and we know for the last 3 months where our money went(Let’s throw a dance party, invite John Travolta, wait that sounds old, let’s invite Usher, dang that’s even pushing it, how about we invite Channing Tatum, he dances right?) We set everything up and we now know that we spent $100 on groceries, this is great we are developing a budget, we also found out we spent all of our money and used our Credit Card, all of this should be included in figuring out your first budget. Originally when I did my budget I took the 3 monthly totals for groceries and divided by 3 to get about what I spend each month. For example if I spend $100, $125, and $175 in groceries for 90 days, that totals $400, which divided by 3 is $133.33. We can see that overall this would cover our grocery expenses 2 out of the 3 months, so I would trust my research and to make things easier and provide a little room for error I would make my grocery budget of $140. Make sense?
Are you having any troubles putting together your budget? Were you surprised by what you were spending? Do you think this is the most difficult thing you have ever done? Tell me all about it. Interaction and Comments is the beauty behind all of this, afraid to talk about money, this is the perfect place to conquer your fear. Until next time on our way to Even Steven.
Picture courtesy of http://www.duxbury.k12.ma.us/