Get Financially Organized

Save this excel spreadsheet and get to work. Midwest Miser Budget Worksheet I prefer to use a spreadsheet, other folks love YNAB (you need a budget), or other budgets apps. Get what works for you!

Understanding your recurring expenses is a financial life saver.  I often hear from friends, “I just don’t understand why I’m so behind every month.” The typically are working really hard to get their budget in order by not eating out, using coupons at the grocery store, etc, but they have NO idea how much they spend every month on their fixed monthly expenses.

Step 1: Insert your monthly paycheck into the worksheet.  If you are paid every 2 weeks do not add in the rare 3rd paycheck.  You should be able to pay your monthly bills without including this in your monthly expenditures.  (Save these unicorn paychecks to pay down debt or to give a bonus deposit to your savings accounts.)

Step 2: Start writing down every recurring bill you receive and document it in the spread sheet.  This is incredibly important to get every recurring expense on the spread sheet.  You have to know what is automatically being spent every month.

Step 3: Set a monthly calendar reminder on your phone to review the worksheet.  This worksheet is an evolving record.  Things will be added and deleted.  It’s important to keep it up to date.

Step 4: Go through EVERY. SINGLE. line item and negotiate a lower price or cancel it. If you have debt you have to make conservative choices.  Cancel cable, decrease your internet speed, etc. (This is painful but absolutely necessary.) We reduced our monthly budget by $200 after going line by line.  That’s $2,400 a year that we put towards investments without changing anything in our lives. I call this a “zero loss.”

Step 5: If you are able to have a credit card that you pay off EVERY. SINGLE. MONTH. I recommend the Fidelity Visa. (Unless you are travel hacking.) I love my Fidelity Visa when I’m not trying to stock up on Travel Rewards.  We put ALL of our recurring expenses on this credit card, even our life insurance. The Fidelity Visa gives you 2%cash back that you can set up to deposit directly into an investment account. I also recommend setting up a $100 recurring payment from your checking account to pay towards your credit card. This reduces the risk of having a late fee if you miss a payment by a day.

Step 6: Open up 4 additional accounts; one for your spouse, one for yourself, an emergency account and a vacation account. Put an automatic amount of money into these 4 accounts.  Anything you or your spouse buys from your account is yours.  If you spend money from the joint account, you need to discuss it first.  For example: On my way to work I forgot my coffee, so I stopped for a latte.  I have to take it from my small monthly allowance.  If my allowance is spent, I have to use our joint account, which means I have to call my husband to discuss it before purchasing it! Believe me, it is SO much harder to ask for permission than forgiveness. This makes you both accountable on your journey to save together.

The emergency fund is important to get to a goal of $1,000, this amount is a personal opinion. This helps cushion any unexpected costs, so you don’t have to put it on credit and pay it back slowly.  Start slow, $10 a month or more, just to get the ball rolling.  The vacation account is also crucial if you tend to take annual vacations. Again, a small monthly amount of $10 or more for momentum and then you can increase it later once your debt is paid off.

Now you know how much you have to spend on variable expenses! Variable expenses are gas, food, clothes, entertainment, eating out, and everything else that can change month to month. This is where you can make another huge impact on how much you spend. 

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