My Budget Year – How I plan my yearly budget, expenses & savings
Check out the video below.
..And find the transcript and the spreadsheet we mention below the video.
Here is the spreadsheet I mentioned in the video: >>DOWNLOAD SPREADSHEET<<
TRANSCRIPT OF THE VIDEO:
As you guys know I’ve been doing budgets for 7 years. First, because I needed to because our debt was big and our income so small. Then I later because I wanted to.. I found that budgeting empowered me, there were circumstances in my life I had no control over, but THIS I COULD do.. make a plan for my money and tell it where to go.
In this video I want to walk you through how to create a well planned out budget, taking yearly expenses into account – so you can start the new year strong! Let’s get started.
#1 Write your budget down
There are several different ways to keep track of your budget. You can keep it super simple and just write it down on a piece of paper.
For the longest period, I used an Excel Spreadsheet (I’ll link to it in the description) and it worked really well – however after 6 years I really wanted to change it up and the past year I’ve been using EveryDollar.
It gives a nice visual overview of your numbers in percentages, shows you how much you have left in a category and if you’ve overspent. And if you have an American bank account you can connect your bank to your budget and it transfers your transactions into the budget… sadly this feature is not available to me here in Denmark, but hope it comes soon.
#2 Yearly Expenses
Now that you’ve decided on what budgeting system you want to use, the first thing you are going to want to do is to think into the future. What expenses come around EVERY year?
Christmas would be one of them, birthdays, insurances, Car repair, maybe a club membership and definitely the dentist.. don’t forget the dentist.
To Calculate your Month-Number just make a list and fill in the cost of each of them.
Do the same with presents: I made one with names of everyone in our combined families, set a budget for birthday and Christmas and tally it all up.
Once you’ve written everything down, add it all together and divided by 12. Now you know exactly what you need to set aside each month to cover those expenses. I’ve set this up as an automatic transaction into a different bank account, so I know it’s there when I need it. Up to you if you want to do the same.
If you have a big event coming up within a year or two do the same. Figure out the cost and divide it by however many months you have to save up. This also applies to a new car, you know you need in 2 years or that big mandatory family reunion trip you know is coming up in 6 months which you know is going to strain your budget a bit.
#3 include all normal categories
The next step is to make a budget including all the normal categories like rent, food, and household items, we do pocket-money pr person so I’ll put that on there. Daycare or school expenses, expenses for your kid, transportation, phone bill and the Month-Number you just calculated of course.
Remember to include giving; if you are tithing to a church, or giving to a charity. Yes, I still believe it’s a good idea to give even when we are paying off debt.
It’s also a good idea to include an amount for small unexpected expenses like a new thermometer because your old one broke, not a lot – just a small amount.
When you plan your numbers, make sure to make them realistic,
If you really want to save, set an optimistic budget and if you succeed try lowering it a bit the next month… see how you do and then correct it from month to month.
#4 check your account
Now you’ve set your budget, but to succeed, in keeping it you need to check your account – ideally every week, but at least every 2 weeks.
This allows you to pull the breaks if one category is being spent to fast and also just makes it take less time to go through the transactions making the task easier. I normally just have my online bank open, but lately, I’ve started actually printing them out.. I find it makes it easier for me to get an overview, I can take note on the side and crossing transactions of as I go is just so satisfying.
Since paying off the last of our debt 2 years ago we have started saving but I have found it a lot harder to stick with my budget. WhenI had debt I was so dead set on not wanting to pay interest to the bank. I wanted to gain my freedom so bad and I was super motivated.. I knew exactly what my motivation was and it was strong.
But Morten and I never had a mission for our money for AFTER becoming Debt Free. We knew we would probably want to buy an apartment or house at some point, but we were not completely sure and kind of vague about the whole thing.. Now after 2 years and a baby we know that we want to save for a home of our own. Now we know our goal and we’re motivated to stick to a budget again.
A while back we feature Sarah aka Budget Girl, she started her channel as a way to stay accountable to her budget. I was so inspired by that, that I’ve decided to document our 2018 Saving Up-journey with you guys.
Every 2 months I’m going to be posting a budget update video, letting you know how we are doing on saving up, what our trouble areas are if we’re overspending-in that case on what, and hopefully celebrate our victories with you as well.
I hope you found this video helpful and that you’ll follow our budget journey in 2018J
As always like share and subscribe and I’ll see you next week. Have a great weekend.