Budgeting. What we thought we were doing before we started attending Financial Peace University. To us the budget was adding up all our expenses, subtracting them from our income and spending what was left. I know, crazy right?
That is not a true budget. A true budget is sitting down and assigning every dollar you make to something, whether it is utilities, student loans, credit cards, car payments, savings, investing. We were not assigning our money to different areas. We were just spending and as Dave Ramsey says, being normal. So we sat down together and created a true budget – how much income do we bring home, what do we pay each month, what is left, where should it go?
When we looked at what we had left after paying all of our bills we were surprised. Where did all the money go each month? What had we been spending money on? Why was so much money going to credit cards? If we had started this journey earlier we would’ve been debt free sooner! But you live and you learn. The things we said during our conversation had us laughing and frustrated with our lack of knowledge. But we knew we were on the right track. It is NEVER to late to get started on your journey to debt freedom.
It’s been said that when people start creating and using a budget it takes about 90 days to get the hang of it. We didn’t have a learning curve with the budget. When we created it, it worked. We stopped eating out, I stopped shopping on Amazon (I’m a Prime member), and I cooked more. I got good at meal planning and we realized how much food we wasted by not meal planning and how much unnecessary grocery shopping we did. As my mom would say, “Do you know how many people go hungry each day and you here wasting food??”
Creating a true budget helped us tackle our debt snowball much more efficiently.
Here’s a look at our first spreadsheet before budgeting: Look at this craziness – first spreadsheet. It’s much more simplified today – second spreadsheet.
One year down being debt free and we are well on our way and excited for what 2019 has to offer. What do your budgeting spreadsheets look like? Do you have one? Or do you use an app or online site to manage your finances – like Mint, Personal Capital or YNAB?
