About this episode
Simplified Explanation: It is always best to track saving and budgeting, throughout the year. At the year’s end, it is good to see how you stuck with your goals and/or budget. Consider this your annual review.
Real Life: How much do you spend each year? How much do you save? Would you like to save more? And lastly, why would you like to save more money? These are questions everyone should ask. Then comes the bigger question: how are you going to live your life?
BUDGET: Here is a word everyone loves to hear: budget. This is where you become intentional with your money. A budget is basically giving every dollar a job and telling it where you want it to be spent. Write out this budget right now - give every dollar you earn a place to be spent or saved. If you have any money coming in each month, you should create a budget. If you receive extra money, have a place for that to go, as well (so you don’t just think “extra money” and then go spend it anywhere). You can even say, “this is spending money,” but make sure you allocate it as such beforehand.
BUDGET ITEM
WANT TO SPEND?
WHAT DO YOU SPEND?
Essentials
Rental/Mortgage
Debt Payments
Utilities (Gas, Electric, Phone)
Less Essentials
Food (Groceries, Home Goods)
Donations
Savings
Medical
Transportation
Non-Essentials
Entertainment:
Dining Out:
Streaming Services:
Gifts:
Toys:
Other:
ESSENTIALS: Start with your essential items, when figuring out how to spend your money. After you list those items, and how much you want to spend on each, calculate how much of your income goes to essentials. Is it more or less than your income? If it is more, then you will need to scale back and shrink some of your other categories. This should also worry you, because you cannot spend more than you make; even a credit card will come due at some point, and you will need to repay. If your total is less than your income, this extra money can be paid towards debt or non-essentials. Remember, the less debt you have, the more you can spend on non-essentials.
DEBT PAYMENTS: How much do you spend each month on debt payments? When you are finding the initial numbers, just take from the payments of the past. After you have written up your budget, if there is any money that is not allotted to something, focus that extra on your debt. Whatever the amount, try to double it, or at least increase it as much as you can afford, to pay off these debts as fast as possible. Look at tomorrow’s section (W4:D4) titled ‘New Debt’ and see how you can get out of debt faster.
UTILITIES: How much do you normally spend each month in utilities? During the year, this may fluctuate by the type of utility, but most households that use gas and electric spend nearly the
