budget help??

[sermon527]

Hi everyone..

we just moved into a place of our own in june. these past few months we haven't really budgeted. we spent what we wanted on whatever we wanted. we haved decided that starting on sept. 1st we were getting back on track. we both have a tremendous amount of credit card debt that we want to pay off so we can start saving up for a house.

i just dont know where to start! how do you make a budget when you are paid hourly and it doesn't always equal the same amount every month??

any help is greatly appreciated.

[CMS79]

Do you know what the least amount of money you will make in a month? I would budget from that number. Then you can apply any pay above that to your debts. Or, if needed help supplement some of the other areas of your budget that are cutting it close.

[kita]

Also write down what you know are your bills. Rent, Min payment on the credit cards, Utitlities, a basic amount for food, etc. Then compare that to min paycheck. In your case I would be very sure to have an emergency fund esp if you have a low min for pay. There are a couple of automatic calculators at crown.org, which I thought were helpful to judge where my expenses were too high. I live in the NYC metro area. My rent has almost always been at the brink or over their rent amount. But this is a high rent area. I just had to make up for it in transportation (public buses) or other areas.

[sermon527]

thanks for the help!

[Jamauk]

I would prioritize your monthly bills.

1. Rent
2. Transportation
3. Utilities
4. Food
5.......and on down the line.

Are you familiar with the Dave Ramsey plan? Once you have your budget figured out (based on your lowest possible income), then you can start "snowballing" using his method and you'll be surprised how quickly your debts decrease.

[frugalfranny]

Good luck with whatever plan you set up. The key is to HAVE A PLAN and stick to it.

There is always lots of help here.......be sure to let us know how you are doing.

[Greebo]

When you have an irregular income, having a budget is all the more important. Jama gave you a good starting point - those things she listed - those always get paid FIRST.

Everything else - well you write down what you have to spend on paper and then you write down your income, and go down the list like so...

             Income         $2,000
Expense      Amount      Cash Left
Rent           $700         $1,300
Utilities      $200         $1,100
Gas            $125         $1,025
Food           $350         $  675
------------------------------
CC #1          $125         $  550
CC #2 ...

When the income runs out, you stop spending money. If you've got 5 things on the list that don't get money, next month they can go up the list (but not above the top 5 items) and get money.

If you keep your spending limits even and UNDER half of the average of your irregular income, you will end up carrying money over from one month to the next. When you find you have extra money after the budget has been completed, you DO NOT spend it - you save it for the next low month.

You only have extra when you can go through a low month and your expenses are still lower than your income.

[sermon527]

thanks for the help everyone! tommorrow im going to be sitting down and putting a plan on paper..wish me luck!

[Michelle68]

Good luck! Keep us updated on how it goes.

[sermon527]

i just got done making the plan with the expenses listed in priority order. boy was i suprised how much extra money we had lying around..being spent on useless things.. close to $500! it feels good to have a plan on paper and our eyes opened to what was really going on...!
we also requested the dr total money makeover book from the library..must be a good book.. we were 114 on the list lol
thanks for the help everyone!

[Greebo]

Awesome! Great job!

[Preston]

My wife and I are paid hourly.

We are union, so we are scheduled for 40 hours a week, however, due to business needs we will be forced out from time to time early. Do you get fairly consistent hours? What is the lowest check you've ever gotten?

I budget the wife's and my paycheck to be $825 each per 2 week pay period. That is AFTER taxes. We haven't had a paycheck that low in over a year, however this is what my budget is based on. When there is holiday pay, or I get my full 40 hours, or overtime it is like getting a bonus. My lowest paycheck has been $850 and her lowest paycheck has been $905. So there is plenty of buffer for incidental unforseen expenses. This keeps me from having to pull from the EF.

While I underestimate my income I also overestimate my variable expenses (no sense overestimating rent) and this leads to a budget surplus. This money is put toward most appropriate use -- either I knock out more debt or this month my wife is having oral surgery and the bill is almost $3000 -- however it NEVER gets wasted on frivilous crap.

Every dollar in your budget should have a purpose -- if you aren't applying it toward something then it needs to find a home -- and if you can't find a place for it stick it in the emergency fund.

[Preston]

BTW -- Just go out to half price books and buy total money makeover. you're going to end up buying a copy anyway and I wouldn't want to wait in line after 100 people at the library. I'm sure you can afford the $10.