Bare Bones Budgeting
The 'No Money' Budget
Living On 1 Income
I am 27 years old and make about $18K a year (after taxes). My debt however takes up $1200 a month, so I can understand the struggle to make ends meet. Two years ago I started this budget and it has worked great for me ever since.
I have in my purse 5 envelopes separated out for my expenses over the month. My five categories are Food, Gas, Medical, Pet, and Spending. Yours might be different. Since you don't have a car you might have entertainment or snacks. I've heard people having a gift envelope, home decor or vacation one.
How I figured out a budget was I took my normal monthly bills, Rent, utilities, insurance. Those are set amounts. Then I took my three loans and two visa's and wrote down just the minimum. And added them up.
For the first month before the envelopes, every time I spent money I wrote it down in a little book (cost and what it was for) and at the end of the month I was surprised. I had spent $140 in fast food! And I even love to cook and am an avid coupon clipper. This little book helped me to accurately estimate how much I would need for each envelope.Food, that is split in half with my fiancee. We both put in $100 each and any extra left over from saving on coupons is our treat for a nice dinner or a movie. The trick I have learned about grocery shopping is only go once a month for the big shopping...all the meals that you can make for a month. We save about $50 out of the money for the little things that won't last or you run out of, veggies for the stew or milk and bread. We go once a week or every other week for the little things. But I realized when you only go for one or two items, you come out with ten or fifteen, and you don't use any coupons, so you spend more money than you should. A snack here an extra something there...it all ads up.
Gas, I estimated over on this one, I only spend about $23-$30 in gas but I put in $50 a month. This way a little ads up so when I need a tune up or oil and filter change...anything unexpected, I have the money and don't have to squeeze it in. My tabs and insurance are budgeted separately. I don't include them in this envelope.
Same with Medical. the one thing I hate the most is getting sick and having to go to the doctor and worrying about paying for the medicine. I put $15 a month...sometimes only $10. This adds up also if I don't use it for being sick I can use it for my prescription eyeware or the yearly dentist visit.
The trick is to not dip into either of these envelopes when the spending money runs out.
Spending, I only allow myself $100 a month...basically $25 a week...and $5 a day. so if I feel I really need that BLT instead of a nice peanut butter and jelly sandwich at home because I'm on the run...there goes my $5 a day. I take this spending also for entertainment and going out. My fiancee and I try to be really good about only eating out once on a weekend. We both would rather go home and fix something, because there is food there, than spend $15 each time we go out. Only having $100 a month is hard for me. I have a lot of things I would like. Don't need but would like. I look at it as a sacrifice for me...for 8 months I will limit myself just to be able to pay a 20% interest visa card off. Because in 8 months there will be another sweeter out there that I will like and want and I will have the money for it.
Pets I have two cats and a dog and several fish. My pets are important to me, so I keep their money separate even though I buy their food and treats at the grocery store. I put extra in their envelope also for the yearly vet bill and the dog licensing. I also buy their food ( all three have separate brands) in the largest bag possible...it lasts longer, its cheaper and when you add five of the smaller versions up, you spend a lot more.
So with all these expenses, my envelopes and bills I have about $375 a month left over to put towards the higher interest ones and get them paid off a little quicker. I get paid twice a month, the first paycheck is for all my envelopes, it's the first thing I do with it. All the loans and visa are all due at the end of the month by my request, and the utilities are due at the beginning.
I requested the other bills to be due on the 30 because I usually have money left over on the first check to send to one of those bills, so not only am I sending in extra I'm sending it in 20 days before it is due and saving on the interest that way also. Some companies however when you send it in early, hold it until the due date, so if you send it in early make sure you write a note on it telling them to ape it immediately, so you can save interest.
My spending is the hardest one for me, usually spend it in the first two weeks and then the last two I struggle. If I do lose control and dip into the other envelopes, it only puts me farther back next month because I have to take that extra money I ''borrowed'' from Gas out of my spending the following month. Then I'm constantly playing catch up and It's not worth the stress.
This budget has been great for me. My life insurance agent started me on this budget, and for the first three months, she said to me to try and not go into any store other than a grocery store, no music store, no craft store no nothing. And if I needed to buy a card or present, they have nice things at a grocery store....it limits your spending and I survived it for 8 weeks.It has been a sacrifice, but I'm young and a year out of my life on a very tight budget just to be semi debt free is worth it in the long run.
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