Let's talk money today!

One of the top reasons for marital fights and divorce is MONEY. One of the top reasons someone stays in a marriage they don't want to be in is MONEY! Whether you are wanting to get finances under control for yourself or with your spouse, a budget is in order. My spouse did not want anything to do with that so I did it MYSELF! Guess what? Now DH wants to know how I did it and he wants me to help him do it too.

The last blog, we started clearing out some clutter. Get some of that posted on your local online classifieds for free. eBay items that you should sell for a higher value to the right buyer. Have a joint garage sale with your friends. I have two girlfriends who have been hosting garage sales with me the last several weekends. It's fun. We all make money and get to catch up on some time together. Win win.

The first month I started selling things around the house, I made $650!
The second month, I got a little more motivated and made $950!!!
The last two weekends were $330 and $130. THAT'S A LOT OF EXTRA MONEY FOR SOME STUFF THAT WAS COLLECTING DUST!!!

CONFESSION TIME: I have never done a budget. It's true, I have never written down my monthly expenses and income and then tracked what I spend.

WELL.....This is my 4th month keeping to a budget. I am going to share with you the best takeaways and practices I have found so far. Oh, did I mention aside from the $2,060 I have made selling junk, that I have recovered $20,000 per year by PAYING ATTENTION to my spending, saving and income?!

1.Start with a budget app like EveryDollar or Spending Tracker or print a budget sheet from Pinterest or Dave Ramsey etc. Whatever works for you.

2.Write down your take home pay.

3. Fill in all of your expenses, even if you are taking a guess. Some commonly overlooked expenses are Netflix, Gym, Sirius, Oil Changes. Some grossly underestimated expenses tend to be restaurants, shopping and entertainment. Don't forget retirement and 401k contributions.
You can take the time to look at last month's expenses and credit card statements and firm those guesses up if you have time.

4. Total all of your expenses up and compare it to your take-home pay. If you're like me, I was spending more than I had. Most people do.
I noticed I was doing $375 by myself at restaurants per month (and I thought I was being frugal!). My friend said she and her small family were racking up $1200 a month eating out!
I also noticed I was not donating regularly to charity. I donate several times a year, small amounts to the Humane Society but it wasn't much.
I do automatic retirement contributions but I had no idea where those stood or if they were performing or adequate...I didn't even know my login and passwords.

5. Lookup your home and auto insurance policies and actually go over them. I have one small rental property and noticed I had insured the contents of the home for $200,000...well NONE of my personal belongings are in there because it's all the renter's stuff. So I changed that right away. I did this with every policy I have and saved over $600 per year. Talk to an agent on the phone and ask for discounts. You probably deserve them!
Write into your budget what all of this costs monthly so you have a clear picture of what you need to budget every month.

Incidentally, I felt a lot more in control of my finances after making some calls and figuring out those passwords.

6. Next is your personal health insurance. Actually look at your coverages, premiums and deductibles. Make sure you are adequately covered but not paying for unneeded extras. Raise the deductibles.

7. Debt. List them all: car payment, credit cards, student loans. If you don't have debt, list your mortgage as a debt and get ready to pay that sucker off!

Total everything up to get an idea of what you are earning vs. spending vs. saving.
Some typical spending percentage recommendations for each category are as follows:

Percentages are based on your take-home wage.

Charity 10-15%
Saving 10-15%
Housing 25-35%
Utilities 5-10%
Food 5-15%
Clothing 2-7%
Transportation 10-15%
Medical/Health 5-10%
Insurance 10-25%
Personal 5-10% (baby sitter, CS, alimony, subscriptions, gifts, pets, misc)
Recreation 5-10%
Debts (at least keep up with the minimum payment but as you find money in your budget, pay those off FAST!) One thought is to pay off the balance of the highest interest rate first. Another thought is to pay off the smallest balance first so that you achieve success and get motivated to pay off the other debts. Do what works for you. Definitely try and get your interest rates lowered and if you're in collections, offer pennies on the dollar to settle. The faster you get out of debt, the faster you can fund retirement and FUN things like vacations, college, giving etc.

Let me know what budget forms you like or what apps you are using. Go find that money and use it to pay down debt. If you're debt-free, fund your retirement and pay off your mortgage!

This is getting fun!