Friday, June 8, 2012

Fiscal Fridays: New budget

I have to make this quick, because as usual, I'm running behind this morning. But I did want to talk about my new budget and the official end of the Financial Diet! (Cue the loud cheering, etc.)

Now that I'm working with an income that doesn't necessitate my living paycheck-to-paycheck, I've been able to rework my monthly budget. Of course, it might be a few months before this exact budget goes into effect, since I have a lot of wedding-, bridesmaid- and car-related expenses to account for this summer. But I'm still using the figures below as the bare bones of my summer budget, and honestly, I really look forward to this fall, when I'll be able to implement it fully.

First, a comparison to my old "budget." The first thing I did when my paycheck came in was pay all my bills that were due before my next paycheck. Then, I bought groceries and put gas in my car. Next, I took care of any other expenses—random things that tended to pop up. Finally, I took $60 and set it aside as "spending" money. If there was any money left over, I made sure to save it because I usually needed it to help cover my next round of bills. Now, I have a set "spend this much on x" breakdown. For modesty's sake, I'm using percentages here instead of actual figures.

The Budget Breakdown
Before I even see my money, my retirement savings (about 10%) and health insurance premiums (about 2%) are deducted from my paycheck. The rest is up to me to disperse. Bills (rent, cell phone, utilities, cable, gym payment, insurance) take up about 29%. Groceries are another 7.5%. My debt, including car payments, credit cards and loan payments to my dad equal about 26%. That number won't change until all my debt is paid off, per Dave Ramsay's debt snowball. Basically, when one debt is completely paid, I'll use the money I was spending on it and put it toward another debt. Right now, my savings are minimal because I'm focusing on debt reduction; I'm saving just 2% of my paycheck right now, as I already have a small emergency fund in place. And my spending money, which covers clothes, entertainment, dining out, house décor and everything else, is a comparatively indulgent 15%.

For those of you keeping track, that adds up to about 95% of my monthly income. The extra 5% is wiggle room for small, unaccounted-for things, like oil changes, minor car repairs, doctor's copays, etc.

So there you have it! A brief breakdown of my ideal budget, once I get this Summer of Crazy out of the way. I'm pretty excited about it. And when I have all my debt paid off, in about a year and a half by my estimations, I'll have to rework my budget again...this time, focusing on building up a REAL emergency fund and saving up for grown-up things like a wedding and a down payment on a house. Woot!

If you're looking for more budget inspiration, check out Whitney's post over on Between the Lines. She has a really awesome, simple system set up with her hubby!

1 comment:

  1. very cool! good reminder to re-work your budget when things change. when I moved home after living on my own I really had to consider where my money was going since I had so few expenses. If I don't save a huge portion of my money, I have nothing to justify the large amount of spending.


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