Alright, let’s talk money people. We are on a self-inflicted tight budget. Why, you ask? We have $200,000 in student loan debt. Find our story here. We are trying to squash our debt like the enormous cockroach bug that it is. Our goal is to be debt free besides our mortgage in 2022.

Our Student Loan Payment

Our student loan payment is $1767 every month. Specifically, a 10 year fixed payment. I’m sure you are thinking, that seems like a pretty good chunk. However, we don’t stop there. We pour every ounce of extra income onto our debt. On Average we are putting $3500 on our student loans every month. We hope that my husband’s practice continues to grow and that my side hustles will generate enough income to reach our debt free dream. In this respect, our goal is to pay more and more each month until they are gone. Poof! In order to make headway, we have to be super intentional with our budget.

Top Budgeting Tips

1. Make a Money Plan

I used to think a budget was just tracking spending. This is why all of my budgeting attempts in the past failed miserably. I was tracking what I spent but not thinking strategically what I should be spending on certain categories. I was in a constant game of catchup. It was annoying. At the beginning of the month, you need to spend your money on paper before you actually spend it! Make it a habit to look at your budget before you spend!

2. Use a Budgeting Tool

Use a tool that makes you accountable!

How do we know what our budget is at any given moment? I will tell you! We use the app EveryDollar. All I have to do is glance at my phone and my budget is right there. There is a free version where you input everything manually and one that costs $10 a month that connects to your Bank (totally worth it). It sends you little notifications of purchases or payments on the app and then you categorize it.

There are many budgeting apps out there. We tried Mint and it did not work for us because of the automated categorization of purchases. We would get lazy and just let Mint take care of our budget. As a result, we would check it very infrequently. When we did check the account, we would waste so much time trying to recategorize things. (It was kind of a nightmare.) Basically, we didn’t have a grasp of what our finances actually looked like.

EveryDollar Plus, on the other hand, holds us accountable. The app sends a purchase or bill notification but I have to categorize it myself. Similarly, I often have to split my receipt into different categories. It may not be as convenient as some other budgeting tools but it forces us to pay attention to our spending. One of the best things about Everydollar is that my husband and I both have access to it all the time and most importantly we both use it!

3. Budget “Funds” are Key

Holidays reoccur annually. Also, school fees are due every year. It comes at no surprise that cars break down and our homes need repairs. Yet, so many people leap into crises mode when these events occur. I used to flip out too! We can’t prepare for everything but we can prepare for what we know is coming.

We can Forecast our Finances

Similar to how a meteorologist forecasts the weather, we can forecast our finances for the month. However, we do have a leg up on the weatherman. He can’t control the weather but we can definitely control most of our financial decisions. We put money toward specific categories every month or most months to create a fund. The balance of the previous month’s budget carries over to the next.

Funds on Our Personal Budget

• Holiday Fund
• Birthday Fund
• Medical Fund– This fund is pretty large. We have about $6000 in it due the fact that 2018 was a medical beast… that’s a story for another time!
• School Supples/Fees Fund– Starting in January we put around $40 dollars in this category and increase the amount as we get closer to august.
• Josh and Ashley Allowance Fund– Every month we give ourselves $30 to spend. We usually try to save it so we can make bigger purchases later.
• Clothing Fund
• Home and
• Car Repair Fund

“You know Christmas is in December every year, so there’s no reason to act like it suddenly snuck up on you. Start stashing away money for your Christmas budget now so it won’t feel like it’s hitting you (and your wallet) all at once.”

Dave Ramsey

4. Don’t Aim High… Start Low!

When you’re figuring out your budget, you should aim low. Trying to determine what percentage of your budget should be allocated to a specific category is not easy. And so I always start on the low end, realizing I may need to increase it until I find the number that works for us.

We, humans, like to be cozy. If you start too high, you may feel too comfortable and stick with spending more unnecessarily. When I started the Dave Ramsey plan I tried spending on the low end. I planned to spend $100 a week on groceries to feed my family of 7 (at the time). My starving family and I realized quickly that that was stupid. Consequently, we adjusted the budget and found the right amount. We continue to adjust the budget because our needs change. At the moment we spend under $180 every week on food for a family of 8!

5. Simplify with Specific Categories

I remember sitting in my family finance class in college next to my BFF and learned the ways of budgeting. “Yes Sensei. I will track my spending and categorize them. ” Interestingly enough, I don’t remember my professor instructing us to be very specific with categories. Evidenced by the very generic form he handed each of his students.

Scratch the Miscellaneous Category

On that form was the infamous category “Miscellaneous”. That category is like a junk drawer. Who knows what is in there? A great way to save money is to get rid of that category entirely. Don’t fall for the miscellaneous trap. If you have something random pop up in your budget that month, make a separate category for it. Most expenses can fit into a certain category. Typically, when I have an expense that’s miscellaneous, it comes out of my personal spending allowance.

I hope some of these tips are helpful! Please Check for my Top Nine tips to become a budget boss, Part 2 blog post. I’m excited to share the final four tips with you!

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