I am a firm believer in making things simple. The more complicated things get the more I want to give up. Life is complicated enough, let's help each other make things simple. Are you in?
I believe we overthink and over complicated personal finance. I believe in investing and good insurance. I believe in minimizing risk (i.e. debt) and growing your assets but I do think we are missing a HUGE part of personal finance when we only talk about investing, insurance and assets.
Personal finance should also be about goals. What do you want to do with the money you have? What do you want YOUR life to look like 5 or 10 years from now? What do you want to teach your children about money? How much money do you want to give and help others?
We learned all of this the hard way. Years on fluctuating, low income left us deeply in debt and hopeless. Finally, we did what everyone said NOT to do. We didn't leave our jobs or manipulate others to help us. We took responsibility for our lives. We set goals. We worked hard and stayed focused. It has changed the way we live.
Along the way, we created a simple budget form that kept us on track each month, but also helped us work towards our goals. We created this form in a PDF. It's FREE just for you!
Wanna see how we use this?
1. In the first box, write down all your income for this month. If you have multiple streams of income, total them all up. It is important to know what you are bringing in each and every month.
2. In the next box, write down your giving for the month. Subtract your giving from your income. This is YOUR NUMBER. This what you will use to pay bills and reach goals. Are you ready?
3. Write down all your expenses in the "expenses box". Rent, utilities, food, target runs, clothes, childcare, kids activities, healthcare. EVERYTHING. Total all that up! If your expenses are MORE than your income minus your giving, you need to stop and evaluate.
What expenses can you cut? Start here. Get control of your spending. You can really work wonders if you pay attention to what you are spending money on. If you need more help controlling your spending, consider using these percentages.
We paid off our debt on a below average family income by committing to live on 2/3 of our income. It was crazy and I'm not sure how we did it, but we drastically cut our expenses. We took every penny we could find and paid off everything we owed.
4. The last box is your goal box. Think about the questions in that box. Write down some goals for your money. If you have nothing left over after your expenses, consider making a goal of paying off all your debt or finding creative ways to increase your income. Maybe you need a set a goal of bringing in a few hunred dollars more in income each month? Do you have a vacation you'd love to go on? Set a goal to save a little each month in a separate savings account until you reach your goal.
Every month we have a few goals lisited in that box. We recently paid cash for a new us to van so our car savings account was running low. We have set goal to replinish that savings account a little every month. We also set aside money for upcoming trip and a new air conditioner.
Getting control of your finances is hard work. We've been there. We decided we would make the most of our income, live on less than we made, take extra work to pay off debt when we need to, and work towards our goals. We knew exactly what we wanted our life to look like 5 and 10 years down the line and we went for it.
It was hard work and we wanted to gvie up. People have made fun of us and told us we were crazy, but we didn't listen. We stayed focused and encouraged each other to work hard and move toward our goals.
If you struggle with keeping a monthly budget download our free printable below. Happy budgeting friends!