I hope you had a chance to figure up your checks and get a list of all your expenses. On top of the necessity expenses, don't forget your credit cards and other debt that you have possibly accumulated. Kudos to you if you have none, some of us are not so good with staying out of debt, but you have great money sense!
Look at your list of expenses. Wow what a list that is, right! Don't fret, everything will be fine! As a member of the Church of Jesus Christ of Latter Day Saints, we have so many great reference materials to help us through life and especially finances and food storage. These are something everyone can use, not just members. Providentliving.org is a great reference for all that I am talking about.
So being a religious person, we have been commanded to pay a full tithe and offerings to the Lord and i do this faithfully every time I am paid an increase in wages. We are commanded to pay 10% of our increase. This should be the first thing that is deducted from your wages each time and given back to the Lord, for it is He that has blessed you with all that you have.
The next thing that can easily be deducted is your mortgage or rent. Since usually this is the same each month, it is easy to figure out. Next would be your utility expenses. Where we live, we pay to three different companies for the water, electricity and natural gas. That is three different payments. If you are just starting out in a new place, this part might be a little tricky for you. For us to set a good budget for utilities that tend to go up and down each month, the easiest thing to do is take an average over the year.
There are some companies that will allow you get on an equal payment program. These are great because then you know how much you will pay each month, but they review at least every six months and your payment will go up or down depending on your usage. Just keep that in mind, but it is great to have when working with a budget.
Start with your water bill. Collect all twelve of those bills. Sit down with a calculator and add them all up. You will probably be surprised at how much you are paying on a yearly basis for water and maybe you can think of ways to try to use less and save some money.
Take the total you got from all of those bills, divide by 12 and you have an average for the year. This is the best way we have found to help cover everything. For us our water bill is higher in the summer because we water our lawn and gardens, but its higher by about $50-$100 than in the winter. I don't know about you, but I can't just pull $100 out of thin air for three months to cover that, that's why we take an average. We also use multiple accounts and money market accounts attached to our accounts so everything has a place, works best for us, but you do what works for you.
Do you have your average now? Great, write that down and that's how much you will deduct each month for water. If you are taking out an average each month and setting that aside, during the months when your bill is higher you will have enough to cover without trying to pull from other things. Continue that with all your bills. Include gas for your car as well so you always have money for gas.
How are you feeling so far? More in control of your life and finances? Great! That's how it should be. Continue with all of your bills that way and see where you are at. Food and non-food expenses might be a little tricky for some. I won't go into too much detail here of what I do to save on food, but in order for us to keep to our budget, we had to set a limit to how much we can spend each month on groceries. We decided $400 each month is a good number and doesn't cut too much out of our money that should help with bills. Some of you probably just fell off the couch now, I know. $400 is not a lot of money and especially for 7 people, but later I'll show you how I make it work.
The average family spends about $200/month per person on food and non-food items. That means I should be spending about $1400/month on just that. That $1000 that I don't spend, covers my mortgage, so see what you can pay for when you sacrifice a little? Sacrifice is giving up something of value for something of greater value. Who doesn't want something better than what we have? If you are willing to sacrifice for it, it will mean more to you.
I know everything we discussed today is maybe a little overwhelming and maybe your head is swimming with numbers now, but I promise when you stick to your budget, you will find more money than you thought you had. Don't forget to save some as well, and some for your kids too!
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