Budget, Emergency Fund

Get Out Of Debt – A Better Budget

I recently wrote about our debt reduction process – a simple one-page guide to getting out of debt. Step 2 of our process was: We created (and followed) a zero-based budget. We “spent” our paychecks, on paper, at the beginning of each month, so that we would know where our money was going to go. I thought I would elaborate a bit on our budgeting process – and some tips that work for us. We break our budget into three major categories: spending, saving and giving. Within those categories, we try our best to estimate upcoming monthly expenses.  We save for annual expenses (such as insurance premiums) and quarterly expenses (such as our car insurance premiums). The easiest way to…

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Budget

Avoid These Budgeting Mistakes

My family and I have been living on a budget for nearly 10 years.  Over that time, we’ve made our share of mistakes – and we’ve adopted some valuable habits.  When making your budget, consider the following – Do not wait until the last minute to make your budget.  Our budget begins on the first of each month, so we sit down and write ours out a week or more before then.  This gives us a chance to discuss the upcoming month – and it also gives us plenty of time to tweak the budget before the new month begins. Do not use an unmanageable number of budget categories.  It’s easy to get too complex – or too basic –…

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Budget

Forgotten Budget Categories – Home Maintenance

When making a monthly budget, it is easy to forget certain budget categories. One of the most often overlooked and underfunded categories is Home Maintenance. It’s easy to understand.  None of us want to think about stuff breaking – especially in our home – so we tend to ignore this vital category. Over the years, we have employed two different techniques for including Home Maintenance in our monthly budget. 1.  We simply lumped it into our baby Emergency Fund.  That’s kinda what the baby emergency fund is for, in a way, so that’s what we did.  When something broke, we stopped our accelerated debt reduction, fixed the broken item, and then continued with debt reduction.  This worked well for us,…

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