Thursday, September 9, 2010

Budgeting is easy as Live, Spend, Save!

My basic rule on budgeting is live on 1/2, spend 1/4 (as you please) and save 1/4 of your weekly/monthly/yearly income.

I prefer to budget month to month. I am paid biweekly, resulting in 2 "extra" paychecks a year. Rather than budget these 2 paychecks in my monthly cycle, I choose to save them or use them for major purchases. This makes the earned income feel like my own personal bonus! Currently these "extra" paychecks show up around the Holidays and when my yearly lease is up, so the excess cash is greatly appreciated.

Live - this portion of my budget includes:

  • Rent or Mortgage

  • Utilities (Power, Gas, Cable, Internet)

  • Groceries

  • Transportation

  • Health
The first three categories are a bit obvious, but the next two also feed into savings.

For those of you that have a car, you know how much of a money trap it is. My Transportation category includes Car Repairs, Gas and Metro (since I use public transportation). The secret is to budget about $50 a month toward Car Repairs, whatever you do not use, put in your savings and record. This $50 a month adds up quick (totaling $600 a year) and provides you with a little buffer just in case something happens.

The same theory goes behind my health budget. I am young so I only save $25 a month for my health. This adds up to $300 a year and provides a little buffer just in case. As I get older, and hopefully my income increases, I will start saving more simply because,hey, you never know.

One of my friends whom I help budget puts all health related things in her Health category. This is perfectly fine, but realize part of this category's purpose is to be prepared for the unexpected. Just add more money to this category if you plan to include items like sunscreen, etc.

Now onto breakfast!

This morning I had my usual coffee and Kirkland oatmeal with twist. Kirkland oatmeal (aka Costco oatmeal) is $8.99 for a box of 55 packets. This equals out to about 16 cents a packet.

I love Kath's oatmeal creations but I don't have the time in the morning. Instead I use instant oatmeal and add what I like to call a "spark".

This morning I had the Kirkland Apple and Cinnamon Oatmeal and added flax seed and Craisins. It was delicious!

And, coffee, of course! In my Preston Mug!! I almost miss being awoken in the middle of the night to deal with my residents, almost. I definitely miss all the interesting people I met being an RA.

Check back later on how I budget my spending money!

What do you include in your fixed budget?