Ok so they are pink but they aren’t scented. Although I highly encourage you give them a spritz.
Today we are going to cover your actual monthly budget. If you are just catching this post be sure to first go back and complete our first two sheets and come back to this one. You can download the budgeting sheets here!
If you have completed the debt payoff sheets and the household expenses we are now on the “monthly budget” sheet. Start by writing the month at the top of the sheet. Ideally, you are going to want to complete this sheet the last week of every month for the following month.
Step One: Writing Out The Dates
Write in all the dates for your weeks. We do our budgets from Friday-Thursday since JR is paid every Friday. If you are paid bi-monthly Sunday might be a good day to start. We pick the first Friday (or maybe Sunday for you) of the month and write that date in below week one. The end date is the following Thursday. We then take the second Friday and write it under week two and so on. You should have 28 days accounted for in your budget.
Step Two: Scheduling Your Paydays
Instead of working week to week we are then going to schedule all of our paydays. I am paid on the 1st and the 15th so whichever weeks those days fall under I write in the date (2/1/18 and 2/15/18) and the amount. Bi-monthly paychecks will only fall under two weeks. I then write in JR’s paydays which fall on every Friday. If you have an irregular income, Dave has some tips on budgeting for that here.
Step Three: Scheduling Your House Payment
Once all your paydays are scheduled you are going to add your house payment. This is your total household expenses divided by 4. It should be at the bottom of your “household expenses” sheet. Our weekly payment is $719. We pay 1.5x our house payment ($1078) on the two weeks of the month that we both get paid and then 1/2 of the amount ($359.50) on the weeks where JR only gets paid. This is where a bit of scheduling and math comes in. You just want to be sure you are depositing enough for all your monthly household expenses throughout all four weeks.
Step Four: Budgeting For Day to Day Expenses
Once your household payments are scheduled you then add the rest of your monthly budget. We use four categories: gas, groceries, shopping, and fun. It usually totals around $200-240 per week. All of these expenses are going to come out of your personal checking account. Add in any other categories you can think of and any specific events that might come up – examples are wedding gifts, extra cash for being out of town, or any special occasions.
If you aren’t great at managing your day to day purchases you can separate these categories into envelopes, get cash out of your personal checking account and use cash only. This is Dave tactic that definitely works!
Step Five: Totalling Your Debt Payments
Now that you have your whole month planned out go through and total each week. Add your paychecks together then subtract your house payment and the rest of your categories. You should have a positive number. If this number is negative you are over budgeting and spending more than you make.
Dave’s plan calls for a zero-based budget so at the end of each week we are going to ideally have $0.00 left over. The number that is the total at the end is going to be your debt payment for the week. This is the amount extra you pay on your current “debt focus.” (Again, your debt focus is the debt listed first on the top of your debt payoff sheet.) Write that number in under debt payment. Your “first total” and “debt payment” will always be the same.
Bonus Step: Calculating Your Debt-Free Timeline
Once you are done feel free to total up all your debt payments for the month. This will show you an estimate of how much of a dent you will make on your debt monthly. You can take your monthly debt payment total and divide your total debt owed by it and it will give you an estimate of how many months it will take you to be debt free.
Week One Debt Payment + Week Two + Week Three + Week Four
= Monthly Debt Payment
Total Amount of Debt / Monthly Debt Payment
= Months Until You Are Debt Free
Don’t be discouraged if your time estimate is high – it’s called a snowball for a reason. The longer you are on the plan the more momentum you will gain – you will probably pay off all your debt much sooner if you stick with the plan!