Planning for January

Our First Budget

My wife and I have sat down and came up with our first budget We started it with the minimum amount we expect to receive in income. The budget is about even right now, but any extra money we receive should be able to be put toward debt or savings. This is our first budget and we realized it will probably need adjusted several times before the end of the month. It will also take a few months before we start getting it right.

In our budget there is savings set aside for: automobile service, Gifts (Christmas/birthdays), Pet Medical, vacation, Electronics, property taxes, and house insurance. These are meant to build up over time to pay for expected expenses throughout the year. These Saving will be applied at the end of the month. If the Budget needs adjusted, these will be the first categories to take from to balance the budget.

Our Envelope system.

We will be putting money in envelopes to keep from over spending on certain expenses. But we will be using them to save for other expenses. We have a bad habit to seeing money in our checking, and using it. This will hopefully hide our money from our bad habits. Some of our savings envelopes will have a max limit on them. While they are at or higher than that limit, no more money from the budget will go toward them. The Max limits will be set slightly higher than the largest bill we would expect to encounter. That way we don’t over save some categories. And the money is put where it is most needed.

Cash – this amount is split between me and my wife, this is money had no restrictions on its use. This is in since our “blow” money. We can use it or save it up for a larger purchase. Giving us our own freedom to get what we want without gilt.

Clothes – This amount is strictly for buying the family clothes.

Petcare – Max limit of $350. This amount is strictly for Pet medicine and Vet expenses.

Auto Service – This amount is used strictly for auto service and repair. It can also build up for future auto purchases.

Vacation – this amount is used on anything we deem a vacation expense.’

Gift Giving – Max limit $2000 This is strictly for birthdays and Christmas and other gift giving.

Home improvement – used for home repair and improvement

Property taxes – Max limit $2000

House insurance – Max limit $700

Recreation and Entertainment – Used for dinning out, movies, bowling, skating, camping, etc.

Electronics – Used for “netnanny” subscription, computer upkeep, and future electronics purchase.

College – will be budgeted in Step 5 of baby steps. Will use envelope to save up yearly deposits.

Retirement – Will be budgeted in Step 4 of baby steps. Will use envelope to save up yearly deposits a /roth IRA.

Groceries - This is only for food, drinks, and household items such as cleaners and paper towels. Probably should be renamed "walmart".

Gas - is left out for now, pay at the pump with a debit card is great. And we don’t seem to do lots of extra driving.