How to make a simple Budget

Budgeting is the easiest way to find out where your money is going, and for the future, to know where your money is going to go.
To prepare you budget, you're going to need to know a few things:
1. Your household income
2. The average amount of all of your monthly bills, to include rent/mortgage, electric, gas, water, garbage, debts, etc.
3. The amount of money you need to survive.

I attached a simple spreadsheet that will help you create a budget.

MONTHLY BUDGET
INCOME
	TOTAL	PAYCHECK 1	PAYCHECK 2
SPOUSE 1 MONTHLY INCOME	$       5,000.00	$       2,500.00	$            2,500.00
SPOUSE 2 MONTHLY INCOME	$       3,000.00	$       1,500.00	$            1,500.00
OTHER INCOME:	$          200.00		$               200.00
TOTAL:	$       8,200.00	$       4,000.00	$            4,200.00
EXPENSES
	MONTHLY	PAYCHECK 1	PAYCHECK 2
MORTAGE
RENT	$          950.00	$           475.00	$               475.00
GROCERIES	$          400.00	$           200.00	$               200.00
RESTAURANT	$          200.00	$           100.00	$               100.00
ELECTRICITY	$          250.00	$           125.00	$               125.00
WATER & GAS	$             50.00	$             25.00	$                  25.00
GARBAGE	$             24.00	$             12.00	$                  12.00
CHARITABLE GIVING	$          800.00	$           400.00	$               400.00
CELL PHONE	$          180.00	$             90.00	$                  90.00
TELEVISION	$             50.00	$             25.00	$                  25.00
INTERNET	$             40.00	$             20.00	$                  20.00
RENTER/HOME INSURANCE	$             15.00	$               7.50	$                    7.50
HOME SECURITY SYSTEM	$             50.00	$             25.00	$                  25.00
CLOTHING PURCHASE	$          200.00	$           100.00	$               100.00
CAR REPAIRS	$          100.00	$             50.00	$                  50.00
VEHICLE FUEL	$          400.00	$           200.00	$               200.00
VEHICLE INSURANCE	$          180.00	$             90.00	$                  90.00
CAR SAVINGS	$          600.00	$           300.00	$               300.00
HOLIDAY/BIRTHDAY GIFTS	$             40.00	$             20.00	$                  20.00
ENTERTAINMENT MONEY	$          200.00	$           100.00	$               100.00
REGULAR SAVINGS	$          800.00	$           400.00	$               400.00
SPENDING MONEY	$          240.00	$           120.00	$               120.00
SCHOOL LOANS	$          450.00	$           225.00	$               225.00
EXTRA DEBT PAYMENTS	$       1,600.00	$           700.00	$               900.00
CAR LOAN	$          250.00	$           125.00	$               125.00
CREDIT CARD DEBT	$             50.00	$             25.00	$                  25.00
TOTAL EXPENSES	$       8,119.00	$       3,959.50	$            4,159.50
TOTALS
	MONTHLY	PAYCHECK 1	PAYCHECK 2
TOTAL INCOME:	$       8,200.00	$       4,000.00	$            4,200.00
TOTAL EXPENSES:	$       8,119.00	$       3,959.50	$            4,159.50
REMAINDER:	$             81.00	$             40.50	$                  40.50

Dave Ramsey and Financial Peace University Changed our Lives!

After graduating college and commissioning as a 2nd Lieutenant in the US Army, I moved to Fort Rucker, Alabama for flight school in May 2012. My fiance at the time, Megan, moved back home to Wisconsin until we go married the following December. She had a job working at the local hospital, and I was living the Army life.

Upon graduation, we had a combined $90,000 in debt.  About $65,000 in school loans (my tuition was paid for, but I still had about $30,000 in loans for my personal flight training, the remainder of the school loans were for Megan's tuition and private/instrument flight ratings). The remainder of the loans was a "Career Starter" cash loan from USAA that I took out my senior year of college to pay for my brand new Jeep Patriot and our honeymoon.  We had a lot of debt and no real plan to pay it off, making the minimum payments as required.

In December 2012 we got married, and I brought her down to Fort Rucker with me.  At the time, I was making about $3,200 per month and had about $1,500 in loan payments. ALMOST HALF OF MY INCOME WAS GOING TOWARDS LOANS! We didn't have any type of budget, and had no idea where our money was going.

In February 2013, we started Financial Peace University, Dave Ramsey's Program to "living like no one else"  After the very first class, my wife and I sat down to create a budget that would get us on-path to being debt free.  We attended all of the classes and for the most part, follow what Mr. Ramsey says.  We did make a huge mistake in the winter of 2013, when we took out a loan on a car.

Throughout Financial Peace University we learned about the Baby Steps Listed Below:

1. Establish a $1,000 Emergency Fund.

2. Pay off all debt using the Debt Snowball

3. 3-6 month expenses saved in your emergency fun

4. Invest 15% of household income into Roth IRAs and pre-tax retirement

5. Fund your children's college

6. Pay off your home.

7. Build wealth and give!

Here's a youtube video that describes the baby steps

We are still on Baby Step 2 and at the time of this post, have about $45,000 left in debt to pay off. We are a lot further along in paying off debt that I would have expected at this time and we should be debt free by the end of 2018.  

Financial Peace University Changed our lives for the best! We are not as worried about our finances as we used to be and have an idea of how we are going to reach our goals!! If you're intersted in finding a Financial Peace University Class, click here to start your journey to being free.

Dave Ramsey's Baby Steps — the plan to win with money.

Beginning Net Worth Statement

As I mentioned yesterday, one of my financial goals is to have a positive Net Worth by the end of the year. To calculate your net worth, you add up all of your assets everything you own (cash value) and then subtract your liabilities (any debts you have).

How are we going to raise our net worth?

We will continue paying off debt  (approximately $1,000 per month), continue contributing to savings (about $200 per month), and continue contributing to retirement account (only about $45 per month until our debt is gone). With all of these transactions, we should have a positive net worth by the end of the year.

To start off the year, we have a net worth of -$12,037.02. We have $33,476.04 in assets and $45,513.06 in liabilities. A majority of our assets are not liquid, meaning the cash is tied up in items and not cash. A majority of our debt is school loans, and our next largest loan is a car loan. We don't carry a balance on our credit card. (We pay our credit card off every month, but the payment just hasn't posted for this month yet.) 

If you have any comments or questions, feel free to leave a comment.