After floundering around for a few days, looking for inspiration, advice and insight around the Internet and among close friends, I realized this plan to pay off my student loans (still looking for a catchy name–suggestions welcome) will never work if I don’t actually create a plan.
Oh, I love planning. My heart skips a beat at the sight of a well-organized list. But budgeting is a different story. Boyfriend recently introduced me to his budgeting system, which includes about three different computer programs and an intense tracking system of receipts… not gonna work for me.
And yet, my system of budgeting by two-week increments via Post-It notes in my day planner is obviously not working either.
Even though I have a $1,000 emergency fund (all Dave Ramsey style), I find myself constantly dipping into it for things I forgot to budget for, like car and renters insurance and vet bills. It’s those regular-but-irregular things that keep hitting me off the path the past year or so.
Once I decided to make a written budget, the actual making wasn’t too difficult–I know pretty close to how much I spend, and I have a goal figure in mind for how much I want to pay out of my normal paycheck toward loans. [At the moment, I’m not including freelance work in my expected take home pay because it’s sporadic at best and hard to predict when I will get paid.]
To start, I found this Quick Start Budget from Dave Ramsey. There are many places on it that I could just cross off–I don’t tithe, I have my emergency fund established, and I don’t have children–so it was simple enough to fill in the things I do have. I like having it printed out and written as sort of a gold standard, but I also want to start tracking planned versus actual to make sure my planned budget is realistic and to see if there are places I can cut.
I’m not prepared to invest in Quicken or another program like that, so I went to my trusty Excel and found a template already built for household budgets. Who knew what I needed most was already at my fingertips? With some minor editing to get the form to fit my needs and keep it simple, I suddenly had a written budget. Eek! And it doesn’t involve Post-Its!
It has a place for all my regular expenses–rent, food, various utilities, etc.–but I also did special notations for the regular-but-irregular expenses. That money will go in a separate savings account so it’s not sitting in my checking account (confusing me), but when one of those items does come up, I have the cash immediately available instead of dipping into my emergency fund or using my credit card for things that aren’t truly emergencies.
August is the first month I’m using this new system, and I can’t wait to see how I like it.
If you have a budgeting system you love, let me know! I’m open to suggestions, and I’m sure there will be tweaks as things progress.