August Budget

A new month means a new budget. I like to start the new month looking over my budget. I do this by first looking at the previous month’s budget and copying over the budget categories that apply to this month as well. I also take this time to look over the previous month’s budget and see what areas could be changed or if we were on track for the month.

I do have a spreadsheet on which I track and also an app on my phone that I use to reconcile my debit card and bank transactions. It doesn’t take very long to do, but it does help us see if we are overspending or getting off track.

So for August, we will have income coming in from my husband’s job and mine. As far as expenses we have a lot of the sames ones each month. We have our mortgage, utilities, cell phone bill, groceries, gas, car payments, and credit card payments. We also like to include our monthly savings on our budget too. This is how we like to keep track of every single dollar that comes into our bank accounts.

For August we’re also going to budget for my mom’s birthday, a few other birthdays, and also my fall tuition. Our goal is to fully fund my schooling and not have to take out any loans or go into debt.

Every month we try to keep our expenses below our income. We do this to avoid going into debt. I can honestly say that it has worked for us and we have made it work. It’s hard to not compare our lifestyles to other people around us and other people on social media.

We have been grateful and blessed to be able to make an honest living and not depend on others. What we have learned to be content with our lives and keep pushing towards our goals. Every day is a new beginning and we should try to do our best. Tell me what you do at the beginning of every month to get prepared for the new month? What works for you and what doesn’t. Any tips you would like to share?

Are you stuck in a hamster wheel?

Do you ever feel like you’re stuck in a hamster wheel? Just living month to month and never getting ahead. You are relying on your next paycheck to come in so you can make your monthly payments or just have some more money come in.

How stressful can it be feeling like you constantly have to work to keep up with your life? Just looking at all the bills coming in, maybe your car payment, your mortgage, and any other miscellaneous payments or expenses you might have.

How nice would it be having a little bit saved up? Building up your retirement, investing a bit, and living a comfortable life. Honestly, everything is possible it’s just a matter of becoming more organized and planning your monthly expenses to be less than your income.

People should always try to live below their means. Each month you should be able to calculate what your monthly take-home pay is. From there we are going to follow the 50/30/20 rule. Fifty percent of your take-home pay is designed to go towards your needs, Thirty percent of your take-home pay is designed to go towards your wants. Then last twenty percent of your take-home pay is designed to go towards your saving and debt repayment.

You need to figure out how much you spend on your “needs”. This would include groceries, housing, utilities, insurance, and car payments. Your “needs” need to total no more than fifty percent of your take-home pay. You may have to look at your needs and take out can expenses that make be considered “wants”.

The next category is your “wants”. This category doesn’t include extravagancies. This category might be composed of the basic niceties you enjoy. Some examples might include a haircut, cable bill, cosmetic repairs to your car, manicures, subscriptions, and many other little luxuries.

The last twenty percent of your take-home pay is designated to be used to pay off any debt you have and to save money. You could save money in your emergency fund or your retirement accounts.

To be honest, this percentage might be tweaked a bit depending on your situation. Let’s say you’re focused on getting out of debt. You might want to reduce your “wants” and put that money towards your debts. This might be a temporary situation, but in the long run, it will be worth the sacrifice.

Imagine not having debt that is demanding your money reach month. Once you’re completely debt-free. You can use the money for other categories. Please take a minute to study your finances and determine why you feel like the hamster that is just going around their wheel and getting nowhere. It’s fine to not have the most expensive things in life. You have to be grateful for what you have and content with your lifestyle.

Improve your credit

Your credit score is a three digit number that can either help or hurt your financial life. A credit score can help lenders determine if you’re a good candidate for a loan, credit card, or an lending situation. They will also use your credit score to determine what interest rate you should be charged. If your credit score is a higher score you could have more favorable terms.

The first step to improve your credit score is to obtain your credit report and score. With your credit score you’ll also receive information about what factors are affecting your score. Once you read these factors you’ll be able to understand what changes you might need to make to improve your score.

While you are reviewing your credit it might be useful to research any inquiries that have been made. If you don’t recognize the inquiries or any activity it might be the right time to dispute the inconsistencies. Incorrect information on your credit report could possibly bring your score down.

To improve your score it might help if you starting paying your bills on time. If you’re behind on any payments, it would be helpful to bring them current as soon as possible. Any late of missed payments appear on you credit score. However, recent late payments have more of an effect on your score that older later payments. You could also benefit from receiving credit from making utility and cell phone payments on time. The option to allow the credit agencies to look at these records might have to be granted by the consumer, but it could benefit them enormously.

Paying off debt and keeping balances low on credit cards and other revolving credit accounts is the right thing to do. This helps determine your credit utilization ratio and it’s another important number in your credit score calculations. A lower credit utilization ratio lets lenders know you haven’t maxed out your credit cards and you know how to manage your credit. Try to be wise about your credit accounts. Apply for and open only new accounts when needed. Having unnecessary credit can harm your credit score in many different ways.

If you have any unused credit cards, you need to keep your credit cards open. By closing accounts you might increase your credit utilization ratio. A higher utilization ratio isn’t seen as a good factor. Try to limit the amount of new credit you apply for. Hard inquiries may remain on your credit report for about two years.

Improving or rebuilding your credit can take some time and it all depends on what needs to be fixed. Take the steps needed to go in the right direction and be patient. It can take some time for information be be fixed or removed from your report. How is your credit score doing? Is there anything you could be doing differently?

Building credit

I remember when I turned eighteen years old, I was legally an adult. Growing up I remember thinking to myself that when I turned eighteen I would have this whole life already built for myself. Little did I know that it wasn’t going to be true. Being eighteen means that you’re an adult, you can vote, and you can many decisions on your own.

One of the many things you can do is start building your credit. I know that not everyone is all for building your credit. However, you need your credit score for several things, background checks, obtaining a car loan, applying for a mortgage, and just receiving lower interest rates. People might say that you should just save for all those things and not worry about your credit score.

While I do agree that saving is great and you should do it. I can’t lie and say that I have saved and purchased everything cash. I have a few credit cards, car loans, and a mortgage. I do believe these financial responsibilities have helped me build my credit. If you need help building your credit here are some tips.

I would recommend applying for a credit card, however, don’t be surprised if you get denied for an unsecured credit card. You might not have the credit score or history to be approved. It might be wise to start with a secured credit card. It does require an upfront security deposit to open. Once you have your credit card make sure to make payments on time, maintain a low credit card balance, always check your credit card statement for any inconsistencies.

It’s recommended to check your credit score at least once a year. There are a few factors that affect your score. Payment history, credit utilization, length of credit history, the mix of credit types, and recent applications. Unfortunately, the formula that credit scores use to calculate scores isn’t knowing. Making it difficult to know how a decision could affect you.

It ‘s not easy to start building your credit. Take it one step at a time and in no time you’ll start to see your score increasing. On my next blog post, I will be sharing what you can do if you have had some issues along the way and you want to rebuild your credit. It’s a different process, but some of the same principles apply. Don’t miss my next post to find out some new tricks to boost your score.

What’s your relationship with shopping?

We all have to do some shopping. While some people love it, others hate it. I enjoy shopping or just visiting stores just to see what has come in. I love shopping for clothes, shoes, home decor, and anything my family and I need. I also enjoy grocery shopping; I just don’t enjoy having to put everything away.

I budget out how much money we spend on groceries and other things. This helps us stay on track and not overspend on things that aren’t needed Our month budget might change a bit based on any events or plans we have throughout the month. For example, our grocery budget in November and December might be a bit more because of Thanksgiving and Christmas festivities.

Before going out shopping we make sure to write a list. We go through our pantry, refrigerator, and freezer. We make a list of what we need for the next two weeks and how much of each thing we need. I like to know what I plan to make during the next two weeks, this allows me to buy what I need and nothing extra. By doing this before our shopping trip we know that we’re only buying what’s needed and what we will use.

I have fallen victim to not taking a list and ending up with too many groceries or stuff I don’t know how to use to make meals. So, before hitting the grocery store, I make sure to have eaten and not be hungry. If you’re hungry and grocery shopping, your budget will not thank you because you will end up doing a lot of impulse buying.

My household consists of my husband and me, each month we set aside money in our miscellaneous category. This is money we set aside for the last-minute items that we didn’t budget for elsewhere. We do buy clothes and shoes, especially when there’s a change of season. So, I make sure to include a clothing category.

Don’t get me wrong we still take weekend gateways and shop every so often. However, we always try to be mindful of what we are spending. Any big purchases we talk about and explore our options. We don’t just make our own decisions and then share it after the fact. We are married for a reason and we respect each other’s opinions.

Do you enjoy shopping? Do you budget your shopping into your monthly budget? What are some shopping tips you might want to share?

Expenses are part of growing up right?

Well, yesterday was the tax deadline for the 2019 tax deadline. Many people were scrambling to get their taxes filed or paid. I did wait until the last minute to pay my taxes. My husband and I filed our taxes back in March, but we decided to wait to pay our taxes in case we might need the money.

The whole world has been in a pandemic, so we were a little afraid to pay any unnecessary payments. We continued to cover all our necessary expenses and didn’t pay anything extra. We’re both lucky in the fact that we weren’t laid off. We both have continued to work and are thankful for it.

I do have to say that getting financial responsibilities paid feels so good. I remember when I was little, I dreamed of the day when I was older and could live my own life. Little did I know that growing up came with responsibilities. Financial responsibilities are everywhere and you can’t avoid them.

You need insurance, housing, food, utilities, transportation, and any other expenses that may come your way. Most of these expenses can be shopped around for. While others are unavoidable and you have to find a way to pay for them. Unfortunately, not everyone has a bunch of money lying around to pay for everything.

I have learned over the years that I must budget and plan for some of my expenses. I still budget and come up with a budget every month. To many people, a budget might mean that you cannot spend money, but to me, it means to have money to pay for the things we need and want.

Just like taxes, most expenses are a part of being a responsible adult. So, what are some expenses that you have to pay for? What ways do you save on them and what do you think about them?

Goals for your first home

Every day is a new day to start something new. When you wake up what is the first thing you do? I get up and get ready for the day. For me, the first thing I check on my phone is my bank accounts. I don’t check them because I have a ton of money, but I like to be on top of my accounts and monitor them. It’s much easier to catch fraud on your accounts if you check them every day. Also, it helps me keep an eye on my deposits and withdrawals.

In my household, I am the one that is in charge of keeping everything in our accounts looking good. I am the one that makes any transfers necessary to cover our expenses and our monthly savings goals. Tracking all of our money is also my favorite task. My favorite part is updating our budget spreadsheet and knowing exactly where our money went.

When my husband and I first got married and joined our finances, we didn’t budget. We just made sure to cover our bills, expenses, and put away a bit in our savings. Then we decided we wanted to buy our first home and wanted to give a twenty percent down on it. So, we made a savings goal and when we were ready we shopped around for our house. It was a bit sad seeing our hard-earned money go towards our down payment. It was one of the best decisions we could have made. This allowed us to not have to pay private mortgage insurance (PMI). We live in our first home for about five years.

We then decided it was time to look for something different we wanted a bigger home in a quieter neighborhood. We looked around and then we decided the best option was to build. Again we were able to give twenty percent down and have now been in our home a little over a year. Our friends and family question how we have been able to do these types of moves. We tell them what has worked for us and what steps we have taken.

At the end of the day, no one is responsible for any of your financial decisions, but yourself. You should have the discipline to know what you can and cannot do. You should be able to set goals for yourself and always keep in mind that you might have to make a few sacrifices along the way. Think about what more you can accomplish if you just wait a bit. Sometimes it might mean that you delay gratification a bit longer. What are some financial goals you have accomplished? What are your current financial goals?

Fourth of July reflections

Well just like that the Fourth of July holiday has come and gone. For me, it was a quiet weekend at home with my loved ones. It was a three-day weekend which made it even better. The celebration that we usually take part in was a bit different this year. The whole world is still in a pandemic due to COVID-19.

People all take different measures and go about their lives differently. In my household, we’re still are cautious of our surroundings and avoid public gathering as much as possible. We don’t mind staying home more than normal if it means we can help possibly slow the spread of COVID-19.

During this month many things are approaching and for us, it means tax time. We did already file our taxes, but we still haven’t paid our tax bill. This year as like many others before, we owe the IRS some money. We’re aren’t shocked at the very least, because we let it be this way. I know that might sound silly to some, but it has worked for us.

My husband and I are both employed and we do have withholdings taken out of our salaries. The withholdings aren’t always enough since we don’t have any dependents and my husband takes on a bit of overtime here and there. We could adjust our withholding throughout the year, but we have decided to not mess with it and instead take a bit more home each month and then pay taxes if needed.

People enjoy receiving a tax refund, but it’s not “free money” it’s just your money that the government took in excess. To me, it represents a savings account that earns no interest. Wouldn’t that money have been better off in your hands than in the hand of the IRS? I believe it’s a personal preference and people will do what works best for them.

After the Fourth of July celebration, I was so thankful to be celebrating all the opportunities that have been given to me. All opportunities come with obligations, but it’s a part of life. Taxes are our obligation and we need to be prepared to obey the law. What are your thoughts on taxes? How do you prepare for tax season?

Setting up financial goals

Once you have set up your budget and seen what your finances look like what are your thoughts? Do you have more expenses than you would like? Are you leaving paycheck to paycheck? Maybe you realized that you make more money and spend less than you thought. A budget will allow you to see just what your finances look like and what your spending patterns are. Honestly, no one is perfect and we all might have some room for improvement.

In my household, we have bills and debt just like about everyone around us. However, we’re on a mission to get out of debt and stop giving away our money. It’s not easy, but I know in the long run it will pay off. My husband and I have read a few books, online articles, and programs about getting out of debt and living a more financially free life.

I can honestly say that we have acquired some knowledge and have altered it to what we think will work in our situation. We have built an emergency fund that has six months of living expenses. As a couple, we have agreed to not take on additional debt. We don’t use our credit cards anymore. I’m sorry to say that we aren’t building up reward points, but are they really “reward” points? They’re rewarding you for getting in debt.

We decided it would be a good change and would help to prepare for our future. We have been married for eight years and have built a wonderful life together. At the moment we don’t have any children but are planning on starting our family in the next two years. So, we plan to be debt-free except for our mortgage before welcoming children into our lives.

Every month we have a budget meeting and go over our finances. We are open to each other’s opinion and we make any changes to our budget that we deem appropriate. We keep each other accountable because at the end of the day we have the same goal in mind

A lifestyle on a budget is nice. You get into the habit of knowing how much you want to spend per category and sticking to it. If you are needing or wanting something, you make sure to include it into your budget. If it’s a bigger priced item then you might have to save for it and build up the funds to buy it.

We have gone with the approach of at the end of the month any money we have leftover we pay it all to debt. We honestly might not have the intensity that other people might have because all of our debts are current and we are making amazing progress as is. We agreed to have a steady pace and not burn ourselves out. Now tell me what have you done to improve your financial situation? How are you managing debt? What has worked for you?

Plan a budget

Today is the last day of the month, which means we made it through another month. Tomorrow we will wake up to a new month and more opportunities to continue to reach our goals. For me, a new month brings hope to do many things. One of the most important tasks to be able to start the new month off right is to create our monthly budget.
You can do a budget on paper, online, on a spreadsheet, or an app. When I first started budgeting, I was using an Excel spreadsheet. I created the spreadsheet and I adjusted it as needed. The first thing is I go ahead and list all money coming into our household. This would include categories such as a paycheck, child support, alimony, social security benefits, and any other source of income. At the beginning of the month, you might not know the exact amounts, but you can estimate based on previous months and then adjust when you receive the money.
The next section you have to calculate is your housing, personal, and transportation expenses. Write down all your utilities, any personal expenses, clothing, groceries, gas, and insurance. It might also be helpful to write down the due dates, so you’re not late on your payments. These categories should be the first to be covered with your income.
Then you should list all your debts. This might include car loans, credit cards, medical bills, store credit, personal loans, and any other types of debt. You want to write them down and how much you want to pay for them. Also, write down the due date.
We must always remember to save some funds for a rainy day or for any other emergency that might head our way. Also, it might be a good idea to set aside some money to give. You might want to give to your church, a foundation, or maybe even someone in need.
Once you start writing down and tracking your money you might be a little surprised with the numbers. I can honestly say that we tend to overlook amounts or underestimate. Your budget should be zero-dollar budget, meaning that every dollar coming in should be assigned a category or destination. At the end of the monthly, you should have allocated every dollar that was earned. I know this process seems a bit much, but take a moment and ask yourself if you know 100% where your money is going. If the answer is “no” then what are you waiting for. Even if your answer is “yes” wouldn’t it be nice to see how it works outs, you might find areas in which you can make changes.
Please remember that the budget isn’t going to be easy and especially not at the beginning. It might take a few months’ worth of budgeting to feel more in tune with the whole situation. Take the process step by step and keep updating your budget as needed throughout the month. No two household budgets are going to be the same. Give it a shot and let me know what you discovered in your budget?