How To Transform Your Life By Using A Budget – Budget glow-Up Day #4

So glad that you all could make it to Budget Glow-Up! Don’t know what it is yet? Head over to our Facebook Group. Also, sign-up for our e-mail list to get the June freebie of the month which is our single-page budget tracker!

Quick recap of Day #1, Day #2, Day #3. Day #1 is knowing your why. Why are you wanting to learn to budget. Day #2 was learning about SMART goals and getting one set up for yourself. You can go back to Day #2 here. Day #3 was all about learning your expenses and where your money goes each month. Learn more about Day #3 here.

We’ve broken down your why, we got a SMART goal setup, we figured out our expenses. Now what? Setting up that budget. The nifty June Sheet that I gave you in your newsletter has everything that you need to figure it out. You can put your paychecks, your bills, envelopes, sinking funds, extra debt, and extra savings. How cool is that? Guess you didn’t know that I already had you setup to succeed with this, huh?

Before we start, there are some terms that you’ll need to know.

Gross = amount prior to taxes, health insurance etc.
Net = amount after taxes, health insurance, your take-home
Sinking Funds = Funds put away every month for birthdays, celebrations, down payment for a new car, Christmas presents etc.

The Envelope System & My Story

There are different types of ways that you can do this. If you really, REALLY need to be frugal where every single dollar counts, I highly suggest the ENVELOPE SYSTEM. You use cash and put all the money, down to the dollar, in envelopes. I used the envelope system when I was making $1,700 a month as a single mom with a toddler. This was about 10 years ago, but still. I was doing the math and that was my gross pay. My net was more likely $1,400. Now I was thankful, my brother watched my son when I was at work, I was able to just walk to work since I was a block away, but we saved, we did sinking funds, we budgeted the heck out of our money. Like I said, if you are in a pinch and really, REALLY need to be frugal. Do the envelope system. You will not regret it.

You also don’t need a big and fancy folder or binder to do this system. Just some envelopes and write what you put in and if you take any money out. I did the math on the envelope itself.

Zero-Budget System

This is the system that I use now. Basically, you know what your next paycheck should be and you set down your budget. You calculate every single dollar and write it down where you think all your money will go. Your goal is to get to zero! The Zero-Budget system gives you some slack on things so you can manage your money a little better. There really is no right or wrong way to do the Zero-Budget System, your goal is just try to get as close to zero as possible.

50/30/20 method

This method is what some use, I honestly am not a fan of it, but if it is something that you are interested in that’s cool. The basic premise of this is 50% is your needs, 30% wants, 20% savings. It’s a good method if you are totally okay with budgeting by percentages. I think there are better ways to budget, so I am not going to go through this one as much.

For your homework today, write down which method you think will work for you, why you think that, and I want you to use that June Budget sheet sent via e-mail for signing up for the newsletter as your guide.

If you have any questions, I’m always available in the Facebook Group.