We have now gotten two paychecks since our decision to commit to a budget and this week we will get the third. Doing a budget and using only cash has been kind of underwhelming so far. I mean, it was exciting at first! We have a plan! We are gonna pay off our debt! But a written plan that is dependent on what will happen takes a little longer than two paychecks to show much substantial progress.
In fact, it’s a little discouraging right now because we are trying to be so focused on paying off our debt as fast as we can, we have set our “extras” categories seriously low. Starting out here is what our budget is for our variable expenses: Groceries: $600.00
- Groceries: $600.00
- Fuel: $400.00
- Eating out: $100.00
- Shopping: $100.00
We have a church tithes envelope and a miscellaneous envelope as well. Our tithes correlate to our income so that amount will always fluctuate. And we have no set amount for our miscellaneous category either. In April, when we first committed to a set budget, we had to renew the tag on Kevin’s truck so we created the miscellaneous envelope for that.
So far we are slightly over budget on groceries, I think this is because Kevin is home an extra week so I’ve had to buy more food to make up for that. As I type this out it occurs to me that maybe we can change our budget for groceries for this month. Ugh this is what happened to us in the first place to make us get serious about the budget. I’m pretty good at keeping our groceries at $600.00 but this month has a few different factors that I wasn’t able to plan for ahead of time. Not to mention we are still working on catching up from a missed paycheck in April.
Oh well, back to what I was saying. So basically how this has worked out is that Kevin has come up with the plan and told me what he wants us to do. Then I organize it all, write it all out as an action plan, and then we execute it! Kevin was able to come up with an accurate plan because I have loosely tracked our spending for years. Now we are working on learning how to adjust our plan according to any miscellaneous expenses that will be coming up and stuff like that.
Since we have always lived basically paycheck to paycheck, we are having trouble looking forward and planning for future expenses. We just made it work and somehow we always made it by. In April we experienced just how we were barely making it living that way. This has made our main goal to get rid of our debt. Since having kids, we have gotten a good little bit of medical debt.
I don’t have the exact numbers in front of me right now, but the amount is right at $10k. I sat down last week and listed out all of our medical debt so we could plan which amounts to try and eliminate first. Three of the amounts are each under $600 and we think we can pay off each of those in the next few months. In fact one is going to be paid off this Friday! And we might be able to pay off another small one by the end of this month. That’s our plan as of right now.
We did pay off our very first medical debt last week and that was super energizing. When I was organizing all of our debts, I noticed that we were paying $50.00 for something every month but I didn’t have the total amount we owed. I called the company and they told me that we had $27.12 left for that debt and I did a little happy dance as I paid that remaining balance. It was so fun and exciting to get one thing checked off my list even if it is a small amount. It was still a big deal and quick win to help us keep going.
Our plan is to use the snowball method to pay off our remaining balances so we will need to reallocate that $50 we were spending there to a different balance. It has been a busy few days since that happened so we haven’t decided which balance to put that towards. We are going to pay off our other balances for this month first and then come up with a new plan. So exciting.
As far as the cash budget goes, right now we are taking it paycheck by paycheck. So this means that with since Kevin is getting two paychecks a month, we get half of each category out of each paycheck. For groceries that is $300.00, for eating out that is $50.00, for shopping that is $50.00. Eventually I want to have enough of a buffer in our account that at the beginning of each month I can pull out the full amount we have budgeted for the month.
It is slow going right now and I feel like things keep popping up on us but I have to remember that we just started doing this and things won’t change overnight. Mainly because we didn’t get to this point overnight.