Budgetting for 2006
I've been working on our weekly budget again, in preparation for 2006. Fun, I know.
I started a new way of budgeting our bills a few months ago and it's working really, really well. We used to have to drain our savings account every few months, but not any more.
First what I did was write down every monthly bill we have, every yearly bill we have (like car insurance), and anything big we are planning to spend our money on (like Christmas, or car tune up, or a PS3, etc.). Then I divided everything up by the week. For example, our phone bill costs $23 per week, and our car insurance bill would cost $15 per week. I did this by the week because that's how often Brent gets paid, but you can do it depending on your pay schedule. So I added up all my weekly calculations and came up with about $175. We would have to spend $175 out of each of Brent's checks in order to pay our bills this year, and save up for some fun stuff too.
Secondly, I set up a fake account in Quicken. I didn't actually set it up in a bank, it's just in Quicken - named Budget Account. Then I set up a reminder to pay our Budget Account $175 every week. So once a week our Budget Account grows and our Checking Account shrinks. But the money is not actually coming out of our bank, it just looks like it is. So we may actually have $500 in the bank, but our checking account says $100 because the other $400 is sitting in the Budget Account, waiting for bills to pay. This is the important part for me, personally. When the checking says we have $500, I'll forget about the new tires we'll need next month or sister's birthday that is coming up - we'll just spend it. But if the account says $100 then we'll be more frugal about our spending because the other money is already earmarked for something else. Does this make sense? I feel like I’m doing a poor job of explaining. Oh well.
Anyway, right now I’m working out what we'll have to save for each week in 2006. We are getting rid of cable so that can be taken off the list, but we're hoping to have a baby next year so that is $2500 we have to save for a home birth. It's kind of exciting looking forward to the new year and planning what may come to be.
I started a new way of budgeting our bills a few months ago and it's working really, really well. We used to have to drain our savings account every few months, but not any more.
First what I did was write down every monthly bill we have, every yearly bill we have (like car insurance), and anything big we are planning to spend our money on (like Christmas, or car tune up, or a PS3, etc.). Then I divided everything up by the week. For example, our phone bill costs $23 per week, and our car insurance bill would cost $15 per week. I did this by the week because that's how often Brent gets paid, but you can do it depending on your pay schedule. So I added up all my weekly calculations and came up with about $175. We would have to spend $175 out of each of Brent's checks in order to pay our bills this year, and save up for some fun stuff too.
Secondly, I set up a fake account in Quicken. I didn't actually set it up in a bank, it's just in Quicken - named Budget Account. Then I set up a reminder to pay our Budget Account $175 every week. So once a week our Budget Account grows and our Checking Account shrinks. But the money is not actually coming out of our bank, it just looks like it is. So we may actually have $500 in the bank, but our checking account says $100 because the other $400 is sitting in the Budget Account, waiting for bills to pay. This is the important part for me, personally. When the checking says we have $500, I'll forget about the new tires we'll need next month or sister's birthday that is coming up - we'll just spend it. But if the account says $100 then we'll be more frugal about our spending because the other money is already earmarked for something else. Does this make sense? I feel like I’m doing a poor job of explaining. Oh well.
Anyway, right now I’m working out what we'll have to save for each week in 2006. We are getting rid of cable so that can be taken off the list, but we're hoping to have a baby next year so that is $2500 we have to save for a home birth. It's kind of exciting looking forward to the new year and planning what may come to be.
Labels: Saving Money
posted by Tracy at 7:26 AM
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