How does a pauper live like a prince? Budgets can be fun!

I forget that budgeting doesn’t come naturally to some people. I’m not sure it came naturally to me, but my husband is a budgeting kind of guy. He has his chartered financial consultant designation, his Certified Internal Auditor designation as well as a BS in accounting. You might think he’d adore the Microsoft Excel or other spreadsheet type vehicles, but when he does a budget for us or helps someone to set up a budget, he needs only four things. Two pieces of lined binder paper, a pencil and a calculator.

Step one: Make a list of all your expenditures. Allow for flexible bills to be higher now and then. Get as close as you can and if you’re spending $5.00 a week on slurpies, (or “icy drinks” as they’re called in OK) put it down on the budget. Once you have your comprehensive list of expenditures tally it up. For credit cards, and other outstanding bills, add the total owed. List food purchased in restaurants as ‘entertainment’ and food bought in grocery stores as ‘food’.

Step two: Make a list of all your income. Write down the gross amount. (I know, I know, I used to think the amount in this column (or single line) was gross sometimes too!)

Step three: subtract the lower number from the higher number. If you subtract income from expenditures, you’ll have a negative number. If you subtract expenditures from income you’ll have a positive number. Put a big ol’ plus or minus beside that number.

Step four: All parties that have access to the check book, credit card or debit card or create expenses must participate in this phase. Post the list where everyone can see. Take a clean sheet of paper and from the “expense” list, write down the bills that are fixed and necessary. Start with Tithing. It is easily figured as ten percent of that ‘gross’ amount you listed. Even if you have not paid tithing in the past or have rigged your own style of paying God his share, pay it properly on the gross income and you’ll be astonished at how readily our Father in Heaven keeps his promises to ‘open the windows of heaven and pour you out a blessing that there is not room enough to receive it.’ (That’s from Malachi in the Bible).
Next list your taxes, insurance and other monies that are withheld from the check that you never see. Then list your mortgage and include the real estate tax and insurance with this amount. (Try to get your house payment automatically withdrawn from your account. This protects you from foreclosure, since the money can’t be spent as easily.)
Utilities, fuel, car payments, student loans etc. Tally this amount and see what the difference is between this amount and your gross. The remaining balance must be divided among the remaining expenditures.

Step 5: Based on the figure you have remaining, divide your remaining income between the remaining expenses. Food, clothing, entertainment(to include your TV dish, sports fees, equipment for sports, gym memberships, etc) phones, restaurants and your credit card bills. If you can’t pay off the credit card or creditors every month, you are morally obligated to trim the other budgets to the bare bones until you can give the money you borrowed back to the person you borrowed it from. Businesses are just people working together to make a living. If you have room in the initial budget to pay yourself, target the same amount you spent on tithing to tuck into a savings account. This is prosperity insurance. This is the phase where you determine whether you will prosper or not. If you can eliminate the cable TV and skip a season of soccer or forego new clothes or a trip that sounds fun for a few months and pay off bills or save the money, you are deciding to prosper. You’re taking control of your life and claiming the available blessings.  If you heard that there was a $1000 rebate for everyone that cancelled their cable bill, but it was not payable until the end of the year, you’d do it wouldn’t you? That is essentially the choice you make.

Step 6: THIS IS THE MOST IMPORTANT STEP: Post the budget and when a bill is paid, write down the amount beside it’s allowance.  Every time you spend a dollar, that spend is recorded on the budget. For food entertainment  and anything else that is bought incrementally, keep a running tally so you know exactly where you are at any given time. When the budget is getting low, stop spending. This is a grown up exercise. You force yourself to stop the magical thinking that you can ‘get money from somewhere’ and accept the limits.

What are reasonable cuts?  A couple years ago, I did an exercise where for two months I limited our food budget for two adults and two teen-age boys to $200 per months. I wanted to see if it was possible to eat WELL on that much money.  We ate hot cereal instead of cold cereal. I kept muffins or homemade bread available all the time. We had omelettes for dinner several times, I baked bread and though nobody likes to take homemade bread in their lunches, homemade bread is a dense, nutritious, filling snack or breakfast. We always pack lunches for everyone, but I kept sliced sandwich bread on hand for that.
I used powdered milk in cooking and if we ran short, I used it for banana smoothies. We ate bananas instead of apples, I used frozen vegetables instead of fresh. We dramatically increased our intake of rice, potatoes, pasta. I made sauces from scratch. I didn’t serve meat as a dish, but cut up the chicken in the pasta, stretched hamburger with chopped onions etc.
I baked all of our cookies from scratch and used four cake mixes during those four months. I made sure that they had a treat (usually cookies) in their lunches every day.
We didn’t eat in restaurants during that time. We bought no soda, and no chips and we don’t drink alchohol anyway.
We made it. It wasn’t much of a sacrifice. The only real change was that I made everything from scratch, so on Saturday mornings, I would spend several hours on Saturday making muffins, bread, etc.
Give it a try. Make it work. Take control. Feel free to ask questions and post about your successes. It will help and inspire others as you make progress.