Saturday, April 5, 2008

My budget and get out of debt plan

is working pretty well!!! It's not a very strict budget, not near like some I've seen. But, it is good for us. I use Microsoft money and have entered all of our regular bills and paychecks into it for the rest of this year. I've entered an estimated amount for groceries, gas, etc.. That way I can see how it will work. I then entered my credit card payments, started the 'snowball' effect on them and we pay around $1500-1800/month.

We also have $450/month going into a savings account. It is used for non-monthly items such as vet bills, car tags, car insurance, birthday gifts, etc...And once that balance reaches $1200, we take $1000 out to put on a credit card, or move it to our ING savings account.

Our ING savings account is for house repairs. We have around $2,000 in it right now. This summer we NEED to replace that back part of our fence, replace the gutters and boards under them, and do some work on our roof. Those are must-do's. There are a couple rooms I would LIKE to paint inside, depending on how things are going.

We also have another savings account that is our emergency fund. We try to keep it around $1,000. It will be used for brakes on the van, and whatever else comes up.

We have a good sized FSA. Since 3 out of 4 of us wear glasses, we are not worried about not using the money and losing it. Both kids usually get glasses at the end of the year, and if there is money left, I also get a new pair.

We have NOT used our credit cards since December!! That is the month we had our "WE ARE FUCKED" moment!! I am very proud of the progress we have made. I will post a semi-detailed report of how bad it was then, and the progress we have made in just 4 months.

As far as fun money goes, we also do this differently than most people. I have a very flexible job. I can work anywhere from 20 to 40 hours a week. So, in our budget I put the amount for a 25 hour work week. If I work more, I divide that amount in half. One half either goes to our emergency savings or a credit card, and the other half I cash. I use that cash for eating out, drinking, a new shirt or pair of shoes, or whatever.
I believe that has really helped me succeed. If I wasn't able to do those things, I'm pretty sure I'd have the credit cards out again. It's a reward for myself.

DH's fun money is similar. His paycheck is direct deposited. So much goes into our joint account for paying bills, so much goes into that non-monthly bills savings account, and so much goes into his checking account.

It may sound odd and maybe even a little difficult, but it sure has been working for us! Just wait until you see the results!

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