Money Monday: Setting a Budget

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If you’re new to my blog I encourage you to read the first two posts in my Money Monday series. You can do so by clicking on the following links:

  1. New Series: Money Monday
  2. Money Monday: Discovering DaveRamsey

Money Monday: Setting a Budget l Love.Bake.Read

Before we talk money let me just say that making graphics in Word is no small task. To make the graphic below, I followed a tutorial I came across on Just a Girl and Her Blog and it was quite helpful. This is the second graphic I made myself and it definitely takes patience to get everything just right. Whew! Practice makes perfect—hopefully!

Okay, let’s get rolling. May 8th marked 3 years since Steve and I started Dave Ramsey’s Debt Snowball Plan. Yay for us!! Don’t get me wrong, it’s been a long 3 years of being homebodies on a budget. Trust me when I say homebodies.

In May 2011, when we first started, we set a grocery budget of $400/month and a retail budget of $100/month. The retail category includes household items, cosmetics, and the like. We played around with these two budget categories for the remainder of 2011 to see what amount was realistic for us. We kept reducing our budget for groceries and found that we could make-do with $200/month and we remained at the amount for the next 6 months.

In April 2012, after almost a year on the plan, we slashed our grocery budget to $160/month. We’ve only ever shopped 1 day per week which means some months have 4 shop days while other months have 5. We tried making it on $160/month even with 5 shop days, but that became quite difficult because it meant we could only spend $32/week. Now that’s a small budget! We eventually decided on spending $40/week which means we spend either $160 or $200 per month on groceries. This is still the case today.

In terms of our retail budget, we fluctuated monthly until this year. We’ve set our budget to as little as $50/month to over $100/month, but this past January we set it at a firm $75/month and haven’t gone over once.

Why am I only focusing on 2 budget categories, you ask? Allow me to elaborate. Other than groceries and retail we only have our base expenses—rent, utilities, internet, cell phones, car insurance, renter’s insurance, and haircuts (for me). These aren’t all monthly expenses either. We pay car insurance twice per year, renter’s insurance once per year, and I get 4 haircuts per year ($35 each). Steve’s haircuts are free because I cut his hair. I never used to, but I learned how to real quick because it sure saves us a lot of money. He needs a haircut every 5-6 weeks and at $30/haircut that adds up quickly.

Setting a budget is a personal decision. I know a lot of people who say they’re on a budget when in reality they spend mega bucks most every day. Being on a budget means you stick to a set amount no matter what. It takes an incredible amount of self-discipline, but it’s 100% possible.

In my next Monday Monday post I’ll discuss the Dave Ramsey plan in more detail. Doing so will show why having a budget is imperative to paying off debt.

My question to you: Do you have a set budget that you follow?

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