So on Monday I shared with you why I started budgeting and how it got me outta debt and today I will share with you how exactly I got started on that budgeting. But I just wanted to give you a little disclaimer...I'm NO financial expert. I'm just a girl who was in a fickle and instead of continuing to bury my head in the sand, I surrendered my finances to Jesus, stopped overspending, worked my butt off and got out of debt.
I came across this verse a couple weeks back and it so has to do with my one word for the year (which I'm going to be sharing next week!!!) but this is why I'm being so open about my financial history.....
"He comes alongside us when we go through hard times, and before you know it, he brings us alongside someone else who is going through hard times so that we can be there for that person just as God was there for us." -2 Corinthians 1 MSG
God set me free from financial stress and shame and I want to do what I can to come alongside you!
So now on to the practical...
As I mentioned on Monday, my friend pointed me to Dave Ramsey. I heavily creeped his website and made a plan from his tips and wealth of knowledge. Here was what I took to heart.
- Be accountable to every single dollar you make AKA you should know where every single dollar of your income goes to.
- Make a budget and stick to it no matter what!
When it comes to paying off debt on credit cards, attack the card with the lowest balance first and pay the minimum payment on the higher one. Once your lower balance card is paid off, put all efforts into paying off the other one.
The thing I really loved about Dave Ramsey's advice is the whole being accountable to every dollar that you make. How often is it that we get our monthly statement and we're all like ughhhh, where did my money go??!!?
He has a free budget calculator that helps you work out your budget. Below is a screenshot of an example of someone who makes 3000/month.
James and I use a different budgeting system which I will share on the next budgeting post but this one definitely helped me out as a single girl.
Every time I got paid I would enter it into this budget calculator and then adjust the tabs as to what were my expenses for the next two weeks. I recorded how much I had allotted for each category into a mini moleskine and I carried that moleskine everywhere with me.
If I had any left over dollars, I would use it to pay off the credit card that I was attacking (ie. if I only used $80 for food and had allotted $100, I would make an extra credit card payment of $20). The whole point was to know where every single dollar was going. If I wanted to buy something but I didn't have enough in the category, I would figure out if I could move the money over from a different category (ie. say I wanted 10 more dollars for personal spending...I'd look through my categories and see if I could take it from something like gas $).
It was an intense method but it worked for me! What I like about budgeting is, it sets boundaries on where you're spending your money. It doesn't mean you can never buy shoes again, it means you can if you properly plan. If I wanted to buy something more expensive I would withdrawal my clothing money for that period and put it aside until the next period when I could combine it with my next month's clothing budget.
I followed this rigidly for 10 months and after the 10 months I was completely DEBT FREE! If you have any questions, let me know! Again, I'm no financial expert but I will try my best to answer your questions!
And for those of you who are asleep....tomorrow I'm sharing the plans for my dining room so get pumped!!!