In May we were able to save $1000 for an emergency fund, pay off $1900 in debt, and save almost enough for our June expenses–pretty awesome, considering we did this on an imaginary budget.
By “imaginary budget” I mean this: we have variable weekly salaries and we were using the program on Dave Ramsey’s My Total Money Makeover. It was useful for estimating our expenses, but there was no way to watch the income and outgo over time or adjust things as our checks came in. Our May budget was purely theoretical–and I don’t know much about budgeting, but I know that make believe budgets are a no-no.
So I started looking for more sophisticated alternatives to TMMO budgeting program. I looked at Mvelopes and You Need a Budget…people seem to like both programs, so I made the cheap choice: a one-time payment of $19.95 for You Need a Budget (for Mac) over Mvelopes’ $13.20/month (first month free).
We’re only 3 days in, but this makes so much more sense! The awesome part is that we saved up so much in May, we’re just a few hundred short of being a month ahead as YNAB recommends, our paychecks this Friday will round out our June expenses and then we’ll be saving for July and paying off debt.
I’m also seeing how this type of budgeting, the “recording every little purchase” type, helps a person save money. It’s like keeping a food journal; recording every bite helps you see how much you’re really consuming and keep it in check–and knowing that you have to write every little thing down makes you stop and think, “Do I really need this?” before diving in.
Still, we’re totally new to keeping a real budget and I’d love some advice…tips? Tricks? Motivation?
You have chosen wisely — Indiana Jones
A quality piece of budget software is critical to understanding where you are and where want to be. There are lots of options; Excel, Quicken, or YNAB just to name a few.
Just like in business they have people pouring over the numbers to make sure the business is making profits. In our own personal lives, we need to take a quarter of that perspective and make sure we are making enough to save for the future.
It sounds like you are starting on the right foot on this financial marathon.
God Bless!
http://www.beatingdebt.wordpress.com
Advice: just stick to it!
Happy to have another YNABer on board
Let us know if we can help in any way in your getting started — though honestly it sounds like you have things very much under control!