Turner and I were on a strict no-spending “budget” from after the holidays in 2017 through the first couple months after our move. We had to save up for our move and hen ensure that we didn’t spend all our savings before we both found steady incomes. So aside from our bills and groceries, we only spent money on very rare occasions.
In September 2018, we sat down to discuss how our new budget should be set up. It took some trial and error, but we ended up with our current budget. It is strict, yet it allows some wiggle room and a bit of a happy surprise at the end of each month. It’s helped us think about our purchases as well as transfer a good deal into our savings account.
How we set up our monthly budget:
- We wrote down all the bills we pay. We put down the names/types and amounts.
- If some bills weren’t a round dollar amount ending in 5 or 0, then we rounded up to the nearest one. Eg. My phone bill is $51, so I rounded up to $55.
- We budgeted for unexpected expenses. For us, that’s essentially everything that isn’t pre-budgeted or groceries. Eg. Getting our car fixed or needing to replace something we broke in the kitchen.
- We budget gas money. We don’t drive very much and have a car with incredible gas mileage, thankfully, so we only budget $50 and often have half of it left over at the end of the month.
- We set aside eat-out money. For us, it usually only covers one meal out and maybe a drink or a small thing of frozen yoghurt.
- We have a fun budget. We tend to use this one up by the end of the month. It covers souvenirs from the parks and such that we visit or admission fees for events or zoos/aquariums that we visit.
- Laundry money. We took an average of our usual spending over a few months and then added a little extra in case of an emergency.
- Groceries we budgeted a bit differently. We averaged our weekly spending for our groceries over a couple of months and then subtracted our more expensive splurges. Then we multiplied it times 4. On four week months, this is more than enough for us. On five week months, it’s a little tight, but we still have enough food and are eating balanced meals. We also buy certain things in bulk at the beginning of the month outside the city so that we don’t have to worry about how expensive they are in town. Eg. olive oil, pasta, nuts, rice, and noodles.
- We pay towards student loans each month.
- Everything leftover from these and the money we earn outside of our regular schedules goes directly into our savings account. This ensures that we have an emergency fund and money for moves/trips that we might want to make.
We track absolutely all of our spending. It’s frustrating at times and definitely takes quite a while, but it’s worth it to see how much we tend to spend on different things and how our spending affects our lives positively and negatively.
Since creating the budget in September to the end of December, we’ve saved about $3500. This is largely from budgeting and from picking up extra shifts when able, but we also had a couple Christmas checks.
Here’s an example or our budget based on our current bills and our average total monthly income of $2690:
Do you have a budget? How do you work yours? Let me know in the comments!