Hello again!! This week, we are working on the functionality of your budget. You've had a week now, to think on things, and see how they are going. What you will need this week if your spreadsheet, and your check book, or however you keep track of expenses.
First things first, look through your budget once more. Make sure you are meeting all your needs - and make sure you are paying yourself. Some people like to put aside a certain percentage of money each month, and some people select a dollar amount. At our house, we have set dollar amounts that go into our emergency savings, 3 month savings, then our 'whatever we are saving towards right now' and our daughters savings account. Those don't vary, and if need be, we cut from other areas first before cutting from savings. We also put the grace money that isn't used into our savings each month.
After you make sure you get your savings sorted out, go through your budget and consider where you can make cuts. For instance, maybe you go out to eat as a family once a week - eliminating one time out to eat, or even two, can often add $50-$100 to your ability to save each month. I know in our budget, we were able to cut our gas costs by a third each month, just by altering our work schedules so that my husband could drop my daughter and myself off each day and pick us up. We also cut down eating out to twice a month, as well as started meal planning, which has saved hundreds of dollars alone.
Another thing that helps is setting an allowance of sorts for everyone. We don't have a lot of weekly costs, so we each take out $20 a week for discretionary spending. It is much easier to turn down lunch out at work when it will use all of your spending money, versus just swiping a card. Keeping daily discretionary spending to cash only is a fast, efficient way to cut down on spending.
Now that you have freed up some money, gather your cc's. If you have none, that's great. If you have some but maintain a zero balance, even better! If you are like most of middle America, you are fighting a losing fight to pay down the debt. So, sit down, and write down all of your cards, their balances and their interest rates. Pick the one with the highest balance, and pay as much as you can (while still paying yourself first) towards that card. Maintain your minimum (or higher, if you can) payments on your other cards, and just move towards carrying a zero balance on all cards.
One last tip. Make sure your spouse is on board. Budgeting and becoming debt free can be very stressful and frustrating - don't shoulder it alone if you have a partner. They helped you get where you are and they will help you better your position in life.
Hope this helps! Enjoy!
~Danielle
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