Creating Your Budget

Betesha Ethridge – #BankWithBea

Hello friends! Here’s a quick recap of last week’s challenge. “…write down our income (whatever source that is), we will write down how much we need (to survive- basic necessities, savings acct, and life INSURANCE), then we will write down what you owe (debt- no matter how much it is-student loans, collections, charge offs, car loans, etc. ), and finally we will write down our dream goals (NEW house, dream car, new wardrobe, vacations- anything that is a luxury goal) and then we will construct a plan.”

Often, clients will discover that they wasted tons of money, but uncover new ways to begin to save for that dream goal. For example, discover your needs vs. wants. Be honest with yourself! Some of our needs are actually just wants and that’s ok. The goal is to make sure that all needs are met before you start to focus on the wants. The best way to equally budget is to create categories such as, “Monthly Goals, Housing- mortgage/rent, insurance, maintenance, utilities, phone, tv/internet, Personal- personal care, sports/gym, clothing, Loans- student loans, credit cards, Healthcare- medical bills/ copays/prescriptions, Food- groceries, date night/family outing, Entertainment- events, hobbies, Transportation- car payment/fuel/bus/uber, etc.

What this does is gives you a roadmap for your monthly income. Maybe you have some doctor appointments this month and need to allot for your copays and/or procedures. Maybe you need to celebrate a family members birthday, holiday, or save for your future wedding. Before you can plan for the occasional needs, you must ensure you are budgeting the source of income that you have for the basic necessities, (Housing, Food, Transportation, Medical, Insurance). For example, when you write down your monthly income of $2000.00 and subtract your Housing/utilities- $1000.00, Food/household items- $200.00, Auto/Life Insurance, $200, Transportation- $250.00, medical $100.00 and savings $100. That leaves $150 to go towards your debt (loans, credit cards) and monthly goals (events, entertainment, shopping, etc.). It is so much easier to plan when you know what you are working with. Don’t spend what you don’t have!

Trust me, one of the hardest things is to stick to your budget! Knowing what your monthly goals are is critical. That savings account IS a necessity, not that item you saw in the store that you just can’t live without. One of my peers once told me to take the cash that you have budgeted to buy whatever you are shopping for and leave your wallet in your car. This will help those of us who are impulse buyers. It really works, try it out and let me know if it worked for you. For those of us, like me, who never carry cash, there is still hope for us. You can use PayPal, cashapp, or a secondary checking account that you never touch, as your “expense account”. Only transfer what you can afford to spend on dining out, clothes, goals, etc. Use the card linked to that account only and refrain from transferring more. Our next challenge is to write down your due dates and pay dates so we can determine which bills get paid with each check and what to do if the due date falls outside of your pay period. Email me any questions at bea@bankwithbea.com#bankwithbea

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