When you are organizing your finances, the two software that come to mind are You Need a Budget (also known as “YNAB” and my personal favorite) and Every Dollar. These are good as you can start budgeting any time, as you start where you are at the present moment and keep moving forward – never looking back. Using what you have found available in the present, you can start giving those dollars a name (or job) to do. When you handle finances with purpose, budgeting is easier. Oh, even with a budget we experience setbacks at times – but those times are easier to recognize when we are organized and focused – it is simply a matter of picking ourselves up, dusting ourselves off, and get moving again.
These two programs are easy to set up, and you can choose whichever suits you the best as you prepare to setup next months budget. However, there are some that still prefer to do their work the good old pen and paper method – and yes, I have created a form that allows you to keep track of income anticipated and received; while balancing it out with the expenses you have coming up. Staying within your means is key to financial success, and you must stay on top of it constantly to keep debt from infiltrating back in.
Draft it out In Pencil, then Finalize in Ink
Before you select a budgeting software, use my simple monthly form and change categories and names to suit your expenses. A week before the new month, pencil in what you anticipate your income will be in the month ahead. Once this is done, total up all your sources regardless of whether they are a once a month payment, like a pension, or a parttime job paid bi-monthly or just random cash you received throughout the month.
Next move to the expense side and pencil in 10% of the total income anticipated as your monthly tithing to your church. Follow it with your regular monthly expenses, by allocating either the exact amount (if you have the bill) or an estimate; total these up.
List all your debts next – least to most. To the left of the item, pencil in the balance after your last payment. On the right hand side, pencil in the monthly minimum amount due in the upcoming month. Now go back and change the minimum balance for the least owed expense to the full amount owed, and total up this section.
Ok, add all the subtotal estimates on the right hand side and put the difference between total estimated income minus total estimated expenses at the bottom in the middle of the sheet. If you get a negative number, go back and see where you can adjust you totals to balance out with your income. The difference should be zero (0). As the actual bills come in, change the penciled estimate to an inked in actual for each item, then paperclip the bill to the back of your worksheet so you have everything handy when the new month arrives.
Now when the new month arrives, and you have inked in your first paycheck and staying paying off the right-side, put that invoice inside of a manilla envelope with your unpaid bills clipped to the front and your coversheet on top. Follow this practice for 6-10 months, then try-out both YNAB and EveryDollar to see which works better for you.
Remove Paid-off Debt from Circulation
Once you pay-off a card or vendor, pull that card out of your wallet and take it out of circulation. Put a box in your underwear drawer and drop it in – DO NOT OPEN THAT BOX AGAIN! We will discuss the contents of this box in more details in a later post. So, for now, practice and hide those paid off cards. As you lower the amount you owe, the amount available on your cards will improve your score – the goal is to get you to 750 or better, before we open the box and take the next move.
GOOD LUCK FOLKS! GET STARTED ON YOUR ZERO-BASED BUDGET TODAY!
Download my handy MONTHLY BUDGET FORM now!