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.

Turning your Craft or Skill into Money

I'm sure you've seen this before, but I'm going to say what everyone else says.  If you want to make extra money but you don't want to do something you don't enjoy, turn your hobby or craft into money.  There are three basic "crafts" you can turn into money: Services, Arts,  and Art Services.

Services: Services include anything you would do for someone else, such as cutting the grass or giving tennis lessons.  It could include anything that you offer your time to directly help the customer.  When you do a service for another, you have to make sure you are doing it correctly, safely, and legally. If you want to make money in an industry that requires a special certification, make sure you have proper documents stating that you have completed the proper training.  For example, you cannot Notarize something without being an officially licensed Notary Public.  Also, when you offer a service, such as some type of lessons, you are advertising yourself correctly.  A new guitar player cannot offer advanced guitar lessons.

Here are a few more services that one could offer:
Personal Cook
Delivery Person
Give Lessons
Mystery Shopper
Grass Cutter/Lawn Care
Notary Public
Tutor

If you can think of any more, feel free to comment and share your knowledge.

Arts: Arts are something you make and sell.  This can range anywhere from a homemade Greetings Card to a Kitchen Table.  You can sell your homemade items on websites such as Ebay, Etsy, or Amazon.  Note, that these websites take a cut of your profits, so make sure you add that in to your selling costs. If you have the proper FDA approvals, you can sell food items and soaps.

Here are a few more Arts you can offer to sell:
Soap
Candles
Handcrafted furniture
Crocheted items
Knitted Items
Sewed Items
Clothing

Pictured above is an old lawn chair that was modified.  Take off the plastic rope and used colored rope to make this design.  It only costs about $30 to make, and I know of people  offering to buy it for $75-$100. 

If you can think of any more, feel free to comment and share what you think.

Services and Arts: Serviced Arts are custom ordered items that you can offer on websites.  An example of this would be custom embroidered Christmas Stockings or a custom handcrafted kitchen island.  The world is the limit when it comes to this type of product.

Some examples of Services and Arts:
Custom wood projects
Custom fabric projects
Custom Ordered Food
Custom soaps and candles

Please share in the comments if you can think of anymore items.

Maintaining a Debt Free Lifestyle

Personal Finance Cheat Sheet posted a pretty interesting article: "6 Ways to Maintain a Debt-Free Lifestyle" Click here to read the article.  Below is a review of their 6 Suggestions to maintain a debt free lifestyle.

1. Build a Large Savings.  Makes sense to me.  If you have a large enough savings, you won't have to pull out the pesky credit card or go to the bank to request a loan to purchase an expensive item.  It also talks about saving money to pay for your children's education or new home. 

2. Pay off Credit Card Transactions Immediately. If you have a credit card, pay it off right away when you use it.  You can collect points to use in the future.  Be aware though, if you don't pay off your credit card immediately, you'll get hit by those enormous interest rates and the debt will add up.

3. Buy a cheap used car.  New cars depreciate in value the second you take it off the lot. If you purchase a new car with cash, it won't depreciate as much and you'll outright own the car and you can trade it in more easily in the future.

4. Go to Community College. Furthering your education will improve your hireability and desireability to an employer.  You can go to community college for a lot less money and get some education that can really help you in the future.

5. Rent. I don't really agree with this one. Sure it'll keep you out of debt, but where is that money really going? It's going to pay off someone else's mortgage and you only get temporary housing that you cannot modify yourself to make it more personable.  I say, if you have a steady job in a steady location, purchase a house you can afford.

6.  Buy only what you need. I'll add 'and what you can afford'.  My wife and I rarely follow this rule.  We are very impulsive when it comes to shopping.  I do believe we've gotten a lot better though, since we sat down and really talked through our finances.  With large purchases, we generally wait a day and talk about it before acting on buying something large. 



Source:
http://www.cheatsheet.com/personal-finance/6-ways-to-maintain-a-debt-free-lifestyle.html/?a=viewall, Chloe Della Costa, March 2015, Personal Finance: Cheat Sheet