Budget. That’s a scary word. Especially to those who have never lived off of a written budget. It seems complicated and overwhelming, but it will get you and your family into a much better financial situation.
My husband and I took Dave Ramsey’s Financial Peace University through our local church just before we got married. It was one of the best ~$100 we ever spent. Even though we still don’t always agree on how to spend or save our money (I’m the spender and he is the saver!), we learned how to set goals, get on the same page with our finances, and even figured out how to afford for me to be a stay at home mom on a very tight budget. I highly recommend this course to anyone, but especially young married couples or those who are about to get married. Money is one of the hardest things to deal with in a marriage and getting on the same page is so vital.
If you want to learn how to set up a very basic zero-based budget, just follow these simple steps.
Gather Your Bills & Pay Stubs
You need to collect your bill statements and pay stubs for the past 3 months. Some bills are fixed amounts, while others are fluctuating. The fixed expenses are easy. Just set those statements aside. The fluctuating bills will need to be averaged from at least the past 3 months.
Track Your Spending
Then you need to track how much you are spending in each budget category. You can do this by looking at your bank statements or online bank account. To figure out how much you are spending on groceries add up all of your grocery shopping trips in a months time. I recommend going back 3 months and averaging these numbers to get a more accurate amount. Once you have figured your average spending for each budget category that doesn’t have a bill statement, you will move onto the final step.
Fill In The Numbers
Once you’ve gathered your monthly bill statements and tracked your spending, you need to plug in your numbers.
The goal is to end up with a zero budget. In other words, your income should equal your outgoing money. If it doesn’t, you need to start adjusting some numbers.
Some expenses are fixed and cannot be changed, however you may need to tweak some of your fluctuating expenses like food, household expenses, gasoline, blow money, etc. If your outgoing expenses are greater than your income, you need to adjust these fluctuating expenses down. You also, may need to consider cutting some expenses all together. A few things we have cut from our budget when money was tight include: cable/satellite, restaurants, blow money, and a second vehicle (this removed a car payment, car insurance, and a chunk of our gasoline budget).
If you have more income than you do expenses, thats great! You can start adding more to savings or your emergency fund, saving for a new car, paying down your mortgage, or investing for the future! Just make sure you spend every single dollar on paper on purpose. As Dave Ramsey says, “Every dollar should have a name.”
Once your income = your outgo, your budget is done. Go to the bank and take out the cash you need for the month, set up your other bills for auto pay or write out the checks and send them in, and transfer any money to savings or investments. It’s really not nearly as bad as it seems!
I hope this has given you ideas on how to set up a very simple zero-based budget. As a bonus, I’ve included a copy of what we use for our zero-based budget worksheet. And since I’m a sucker for cute printables, I made one to share just with you! Click the link below to print your own!
Basic Zero-Based Budget Worksheet PDF