Here at The Tabby World we like to follow a budget. This is a great way to save money. When you know where your money is going, you can easily plan for the future.
We started budgeting a few years ago when we were in major financial turmoil. We were on the brink of losing both vehicles and the home we had been purchasing. That’s when I started researching how to set up a budget.
After many hours of researching I found an article that helped me come up with my own plan. I had discovered the best way to plan the budget and how to save money for future economic hardships.
Senator Elizabeth Warren suggested to use a 50/20/30 rule (Whiteside, 2016). This breaks down to 50% of the income spent on needs, 20% on savings, and 30% on wants (Whiteside, 2016). When you first start budgeting this might not be the perfect fit for you.
You will never find out and understand your budget until you write it down so you can physically see where your money is going. I cannot stress this enough. Therefore I have created a worksheet to do our budget.
You can get your free copy of my Budget 101 Worksheet. You can also find it on the resources page at any time. So download your free copy and get started immediately.
What I like about this worksheet is that it’s easy to fill out. You just need to sit down and do it. I promise you will not regret it. Below is the link to the worksheet again.
As you can see there are four columns for you to fill out. The first is the Monthly Estimate column. You will need to write in the Estimates for each of your expenses. These are just estimates. You will them fill in the Actual Expenses as you get the invoices. For example, I estimate my income at $2000 every month. The actual is actually higher at $2215. Therefore I then fill in the third column with the difference which is +$215. This means that we had an extra income of $215. I continue to fill out the worksheet and at the end I can see if I have unalloted money. This money should be put in either savings or used to pay off debts.
I myself balance out the budget pretty well because I’ve been doing this since 2016. I know that our expenses are actually higher than the 50% that is suggested. Ours is actually 59%. So with that being said. I adjust what I would apend on entertainment to 11% of the income instead of the suggested 20%. I never adjust savings unless it is to increase the percentage due to an increase in income.
One thing you have to underatand is that we are on a tight budget because I cannot work due to my back injury. I have no money coming in currently. So we are surviving on my husbands income alone. This is why budgeting is extremely important for our family.
Aa you can see, the worksheet is easy to fill out. Just understanding where to go from that point is the hard part. You will find out where your income is going. Then you can adjust your spending to do whatever you need to do.
My top suggestion is to cut out the extra that you don’t need if your income doesn’t cover your needs. Also rathole into savings whenever you can because you never know when something is going to come up. Always include your spouse too. You both need to be on the same page or it won’t work.
Do you use a budget to stay on track?
Whiteside, E. (2016, February 29). What is the 50/20/30 budget rule? Retrieved July 16, 2018, from https://www.investopedia.com/ask/answers/022916/what-502030-budget-rule.aspTags: Budget, budgeting, expenses, future, income, Saving, saving money