I went to post on the other thread but it had gotten a bit long so here's part II.

Link to part 1... http://www.getorganizednow.com/forum/ubbthreads.php?ubb=showflat&Number=163233&page=1#Post163233

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Anyway, I just had to share...my boss just called me and gave me a 15% raise! Out of the blue. He called yesterday and I missed his call and he said he had some exciting stuff to talk to me about and my DH was teasing me, I'll bet he gives you a raise. :-)

The exciting stuff was actually about two additional golf courses we will be managing - to add to the three we have now. He said it would mean a lot more work for me - which is fantastic because I'm an independent contractor and bill them for my hours. Plus it's fun having new courses, we've had the other 3 for many years now.

Fantastic news, ChefSam! Congratulations!

Our friend Tia would like to pose this question...

I have always failed at making a sensible budget plan bc I have no idea how much we spend on average each month on clothes...we buy clothes very, very rarely.
I have the same problem with things like unexpected gifts, and other things we do buy but only every few months.

Stupid, I know, but how do I put these in the budget?

also, a few things we have no choice but to pay for once a year or (even worse) in 5 instalments of different amounts (council tax works like that here). How do I enter those things in?

Any other tips on making a budget plan pls?

tia

Tia,
First and foremost, you have to keep track of what you do spend so you can budget for the future. How do you keep your finances? Do you use Quicken or another formal method? Even just pencil & paper works!

Once you have an idea, then you can form your budget. Here's an example. I went through my Quicken software and saw that we spent an average of $500/mo on groceries. I therefor budget $500/mo for groceries. I allocate $100/mo for personal care...toothpaste, shampoo, haircuts, etc. And so on...

My categories are:
Food
gas
personal care
pets
clothes (includes shoes)
cable
cell phone
Misc
Cash
Home Repair
Household (paper towels, sheets, laundry soap, etc)
Golf for DH
Books for me and DD
Gifts

These are the things I charge to my American Express and pay off every month.

Then there is:
Mortgage
Electric
Gas
Water, Sewer & Garbage
**Property Taxes
**Auto Insurance
**Life Insurance
**Homeowner's Insurance
**Auto Repair
**Sears bill (washing machine & fridge charged w/no payments for a year)

The reason these last items are starred is that I pay them once a year or so but I "escrow the amount" each month to our savings.

For instance, our property taxes will be about $4200. Therefore I need to put about $350/mo into savings so that when the bill is due, it will be there and not be a problem. Same for the insurance and other bills.

Now we come to what's called accruals. Say you budget $125/mo for clothes and you spend $60 this month. That means you have $65 left over to add to next month and then you have $190 next month! The same goes in reverse though...if you overspend, you have to deduct.

Accruals is especially good for something like gifts. Say you budget $50/mo for gifts but have no birthdays, etc for a couple of months, you can set that money aside for xmas!

One thing that is important is to move the escrow and accrual money to a savings or other account so that it's not in with your regular checking account in case you'd be tempted to overspend. Then when you need that money, you simply move it back.

The biggest factors with this type of budget (or any type really) is you have to keep up with it and you have to have everyone on board. If DH is a spender and doesn't follow your budget, you're going to have problems.

The other really big factor is you can't just budget any amount you want, you have to see how much you're taking in and make sure your budget amounts don't exceed that. Also, leave yourself a cushion. Don't take it down to the penny. If you don't leave yourself some wiggle room, then you will panic if you go over.

Another example of something you can do is say you allocate $500 for food but only spend $400 but you're over on gas, then move $100 to gas to absorb the overage.

Please let me know what questions you have. BTW, Blessmymess is the Queen of Finances so she might be able to help you as well.

Thank you very much - that helps a lot.

what do i do about big ocassional purchases like a lawnmower?

Hi, I'm jumping on the bandwagon with 'justme', working out my finances is a big priority for me, so I'm following this thread with interest (pardon the pun )

BTW, justme, I believe my level of organisation and general tidiness around the place is directly related to my mental health, too. So I know exactly where you're coming from.

Back on topic, the kind of budgeting mentioned is one that I've been thinking of using, putting money aside for big bills coming up, but what happens is big bills keep stealing all the money I've allocated.

For instance, if I begin budgeting now and have, say, a $500 bill due next week it's going to take a huge chunk of our wage that we can't afford...it's no use allocating money toward this bill as it's due soon. Does that make sense?

It's really difficult to get ahead, it's almost like you need a big chunk of bill money put aside before you start to cover those big bills that come up that you haven't accumulated enough money for. We can't afford to put a large amount of money aside out of each pay packet.

I'm rambling, but I hope you get what I mean.

lil_miss_messy, are these variable or fixed bills? Like a fixed would be your car/house/credit card pymts verses variable bills are random ones like medical or dental that happen every so often.

You should try reading Dave Ramsey's Total Money Maekover. It literally saved my financial sanity! You start by getting current with all your bills, if you're already paying at least minimums then you're good. If you have large variable bills, like from a doctor's visit, call them up and see if you can pay some now and some later. They're usually pretty good about that.

Once you're current you try everything to save a baby emergency fund of $1,000. Stop eating out, start cooking in bulk, stop buying clothes for a few months, etc. Then you start your 'debt snowball', start paying off your smallest debts first with all your extra money. This helps you see progress almost immediately. As you pay the small ones off you takethe pymts you would've been making on those and add them to the next bill.

example: making $20 pymts on smallest credit card, throw all you can at this to get rid of it. Once paid off move onto the next, maybe a loan of some sort. Add the $20 fromt he previous cc pymts to your minimums on this bill. It eventually snowballs.

Sorry! I know this was a lot of info and some have other tactics/ideas. But I really needed the encouragement of seeing things get paid off. Since I started in May I've save more than double my emergency fund, paid off a school loan, a cruise, 2 really small personal loans, 1 credit card, 3 medical bills...it's so encouraging. Now I just have my last credit card, large school loan and car.

It's SO hard to get ahead so this may help, if not, no worries. I love writing/talking about ramsey's ideas since it's working for me.

Have a good one ladies!

Adriana,
Exactly!

I'm not making little of anyone's finances but quite often, money is being spent that doesn't need to be.

Are you eating out a lot or getting takeout because it's "easier" or that's what the kids "want?"

Are you stopping at Starbucks for a latte on the way to work?

Are you buying clothes because you want to go shopping rather than you absolutely NEED the basics?

I'm not saying you are but these are questions to consider.

Justme, things like lawnmowers need to be budgeted for as well. That's where the Misc part comes in. If you buy a $200 lawnmower and you have a $500 misc budget then you only have $300 left. Or you take $100 out of your grocery budget, $50 out of your clothes budget and $50 out of your household budget.

The bottom line is it has to come from somewhere, you can't spend or even budget for money you don't have.

BTW, one HUGE aspect of this whole thing is setting it all up. It takes a lot of time and effort but it's worth it and must be done. It's not going to be done in an hour.

yay chef, same page

lil_miss_messy, not sure if you have one but i have an excel spreadsheet set up for a budget if you want I can send it to you. it's really simple, I do it by paycheck since I get paid every other week but used to do it monthly. There's space for your fixed bills, the variable, wages in and it keeps track of your balance. This will let you know how much you're REALLY spending. I realized I spent over $600 a YEAR on my nails when i had the acrylic--um yeah I took those off asap!