Saturday, July 9, 2011

Getting a Handle on Your Wallet

I saw a post a few weeks ago by a young friend of mine, recently graduated from college.  In it, there was a link to a personal budget spreadsheet.  Being the financial record keeper of my household as well my church, I have an interest in these things.  I decided to check it out.  It was a basic budget with income and basic expenses like rent and utilities.

It got me to thinking about when Mr. H and I were first starting out.  I learned to tithe.  I learned (the hard way) that some expenses come up only once a year, but that one time always comes as a surprise.  It took a decade before I was comfortable with the flow of our finances!

One day all that changed.  A friend and her husband were teaching a couple's Sunday night break-out group at church.  They showed us a budget they had set up for their son, a young adult with his first real job.  It was broken down by weeks:  first week -pay rent and buy groceries; 2nd week -set aside $100 towards next week's car payment and buy groceries; 3rd week - use last week's $100 and this week's check to pay car payment and buy groceries.... you get the idea.

I took that idea to my checkbook register.  I knew how much was coming in every week.  I paid attention to the due dates on all our regular expenses.  I assigned certain bills to specific pay checks: Mortgage to the last paycheck (in case the first paycheck of the month didn't come until the 6th or 7th day of the month!)  Electric bill to the 3rd paycheck, car payment to the 2nd paycheck.  I was stunned at the freedom I felt!  I knew that if nothing unexpected came up, certain bills would always be covered by certain paychecks.

I've heard people say that they don't want the restrictions of living on a budget.  I think they've got the wrong idea about what a budget is.  It's not a set of rules.  It's more like a map.  And unless you have unlimited access to a vast pool of cash, you are on a budget:  you're just ignoring the fact.  Only so much comes in and therefore,  only so much can go out.  You're much better off knowing where it's going.

To help with getting a handle on all the comings and goings of your dollars, I'd like to offer a form to get you started.  If you're familiar with spreadsheet programs, you can download it as an Excel or Open Office file and put your own numbers in (click File, Download as, and pick your format.)  If your computer skills are limited to read-only, get yourself a notebook and a calculator and write it out by hand.  Yes, it will take a while, but believe me, you'll feel better when you can see it all together!

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