Creating a budget- where to start?

iVillage Member
Registered: 11-07-1999
Creating a budget- where to start?
4
Sun, 01-18-2009 - 9:06am

Hello everyone,


I am a long time lurker and have found much inspiration on this board. A little history- my husband makes very good money and yet we find ourselves 25k in CC debt, We have a plan to pay that off. After 23 years of marriage I finally (!) have the need to go on a "budget". Never really had one before- the money came in, the money went out. Bills came in and got paid.


However, I now find myself in need of a budget, except I have no idea where to start. I know we need to put $ aside for emergencies, and I know that I need to put certain amounts aside every month to pay for large bills such as property taxes (6k a year, which for the past two bills I have put on a CC as I had nothing saved up for them- stupid, I know). Most of the bills are non-negotiable (mortgage, taxes, etc). Some I can cut back on (food, entertainment,etc)


My husband knows I am horrible at this and yet he doesn't want to take over the task as he works in the financial field (shoemaker's kids have no shoes kind of scene). I feel like someone just handed me a wrench and said go fix the car. Ok, but how?????


I am embarrased to say that at 48 years old I am bad with money. I haven't charged a thing since December and have been very tight with my money, but that is only a small part of what I need to do. I am scared this time, and that's the difference. I am TRYING- but my husband wants instant results and I said it's like being in rehab- one day at a time. I can't change the past. My husband has no idea how much money it takes to run this house or what the bills are, or even how much anything costs. He doesn't ask and I don't tell. Stupid again, I know.


Any help or suggestions would be greatly

Avatar for sullengurl
iVillage Member
Registered: 02-16-2004
Sun, 01-18-2009 - 9:33am

Hi:) The first thing I would do is to write down everything that you spend to bills/debts. Bills that only come up once or twice throughout the year need to be divided by 12 to get the monthly cost. Then I would add all that up and compare it to the income you have coming in.


Once you take care of the fixed bills, then you can see how much left you have to work with for living expenses (food, personal items, clothing, free money, entertainment, etc.). Some people say to take a month or so and write down everything you spend so you can see where it is going. I think this could be helpful to you. Or you could even post your numbers on this board for some suggestions.


After you have figured out the amount of money you need to pay bills and expenses, see if there is any that is left on paper. If you have even a small amount, you can place that on your debt. Some people say to pay off the debt with the highest interest rate first, others the lowest amount. There are calculators all over the internet to help you decide which is best for you.


It is too bad that your husband is unwilling to be a partner in this, especially since it sounds like he has the experience and skill to help immensely...nonetheless, it can be done without him. I mean, I handle all the finances at our house and although it would probably be better if my dh was more involved...it is what it is. I am still allocating our funds to pay off debt.


Good luck to you! Hope this was somewhat helpful!

 


 



iVillage Member
Registered: 11-17-2007
Sun, 01-18-2009 - 11:13am

Here is advice from a person that can not do a budget in the normal since of the world. Do you have a money program like Quicker or Money on your machine. If you don't I will tell you right up front you really need them. Bad or Good with money you need either one of these programs They are around 30.00 or so dollars I bet you could find one real cheap at Circuit City since they are going out of business. If not buy a 2008 off of eBay the 2009 is out already so pass years go cheap.


Here are some percentages no matter what else you need to know. House that is mortgage /taxes (in your case divide tax bill by 12 and insurance too if it not taken out of mortgage payment. This is a great month to start this since it is January. Stick it in a special saving account. On line banks are great for this)and insurance should never be more then 25 -30% of your income. If it is then it is to really

iVillage Member
Registered: 04-10-2003
Sun, 01-18-2009 - 5:05pm

Hi there. I do my budget a little bit differently because I get paid monthly (rent money) and biweekly (from my job). I have a monthly budget that I aim for. I track all my fixed expenses such as mortgage, taxes, insurance etc.


Every few weeks I take a calendar (in my case outlook on my computer) and write down what bill is due on what day. I then write down my bi weekly pay periods. I look forward two weeks and


Bex -

iVillage Member
Registered: 11-07-1999
Mon, 01-19-2009 - 10:55am

Hi Ladies,


Thanks you so much for the advice, and for sharing your stories on this board. It helps to see how other people tackle these issues.


I am so annoyed and mad at myself for wasting so much money over the years, but better late then never. I am excited as well as a little nervous to begin this endeavor. I feel at times I am reinventing the wheel, it really is a bit overwhelming. I am horrible with numbers and even worse with a computer, so I think all my "reckoning" will be done in a notebook.


The percentage thing is interesting, I am curious to see how my numbers will jibe with that.


I think how I will begin is to look back at every bill from last year, add them and divide by 12, and see how that works out with our monthly income. On paper it looks like we should be rolling in the dough, but in real life, I have no idea where the money went, and that in itself is one of the problems. My husband says I spend money like a drunken sailor, and he is right. I am Madison Avenue's dream come true. That has changed, though. No more. Like a drug addict, I am DONE.


I know there IS a lot of fat that can be cut. I am in awe of you ladies that have it so together with managing money. It almost seems like a full time job. One that I never seemed to have time for, or couldn't be bothered putting in the effort,