How to Set Up Your Budget (an outline)

This is a simple outline that I am going to fill in in the next few days with information. For today, if you have not yet set up a finance binder or a system of organization for the paperwork of your finances then please read the blogs under Section I. If you have been following my blogs, and already have your paperwork organized, then I thought that seeing the process of setting up your budget outlined in this simple format may help you. If it is all new to you, then stay with me, because it will all be explained in the next few posts.

I. Setting up a Finance Binder for easy organization

I covered setting up your Finance Binder a little last Monday, but I didn’t major on it. If you would like more information on setting up a finance binder please see the following blogs:
Binders, Files and the Battle of the Sexes; A Plan for Freedom; A Place for Everything; Finishing Things

II. Setting up your Budget

a. Determining your budgetable monthly income
~ Salary (paid once or twice a month)
~ Hourly wages paid weekly or
~ Bi-weekly (hourly or salary)
~ Commission
~ Combination of salary and commission
~ Self employed

b. Listing your bills
~ Fixed bills (do not vary – the same amount every month
~ Fluctuating (like your electricity or gas –change every month)

c. Listing your monthly Fixed expenses (Giving, Savings, etc)

d. Discretionary Money
~ List your categories (Groceries, Gas, Entertainment, Clothing, Gifts…)
~ Look at your last few months to see what you typically spend and determine a livable budget based on this
~ The Envelope method

III. Balancing your budget

a. Work to reduce your expenses to within your income
b. This is the part that may take a little prayer and (gulp) sacrifice. Remember, living within your income is going to free you from debt and enable your dreams. This is the time to be realistic about what you are spending your money on, and what you may need to give up or reduce. Ask the Lord to help you to know how to manage your money well.

IV. How to use your budget

a. Carry it in your wallet
b. Make notes on your budget as you spend and pay bills
c. Print a new budget each month, making adjustments as needed