Controlling your spending when money is tight
My Story: A Basic Spending Plan
contributed by Kim
A Spending Plan for Frugal Living
A Beginner's Guide to Budgeting Success
When There Is More Month Than Money
I thought I would share the budget plan I used to help my son get back on his feet after a prolonged job loss, divorce, eviction, and just basically starting over.
The first thing we did was to figure out how to make his rather small pay check cover all his expenses as easily as possible.
- What is the base take home pay?
- Get all utilities on the budget plan. This makes them all the same amount each month.
- Write down any extra expenses that happen during the year, such as renewing license plates, etc.
- Anticipate any medical bills to save for./li>
- Write down any needed "extras" you know may be needed like new tires on the car, etc.
- Figure out when all the various bills are due. For example, the electric bill is due the first week of the month, etc.
Since he gets paid weekly, we also divided his rent by four. We did this because he would not have enough money in one check to cover the rent, purchase gas for the car, and buy food.
Here is what his basic budget now looks like:
Take home pay: $426 weekly
|Rent||$100 to savings (paid last week of the month)|
|Gas for car||$ 25|
|Car insurance||$ 25 to savings (paid third week of the month)|
|School lunches||$ 2|
|Daughter's dance class||$ 10|
|Daughter's Scouts||$ 2|
|Cigarettes||$ 35 (trying to quit and has cut back a lot)|
|Pocket money||$ 20|
|Prescription medication||$ 4|
|Electric Bill||$141 (will go down next year)|
|Savings (balance)||$ 2 (yes even this adds up over time!)|
This is a basic budget, which has just a couple of variables. The electric bill is the largest utility, so the first week is the strictest with little left for savings. When the bill is less, more goes into savings. As he smokes less and less, he gets a little reward by having a little more pocket money to be able to do something special with his daughter on the weekend like seeing a $2 movie. As you can see, the food budget is tight. His daughter gets breakfast and lunch at school and he takes leftovers to work. He is learning how to cook, coupon, and meal plan around weekly sales.
Every three months, there is the "extra" check or the fifth pay day of the month. These checks are budgeted for the larger items he cannot work into his budget, such as new tires for the car, license plate tags, gifts, etc.
If your spending has put you in debt, take the first step to financial freedom!
He has been doing very well and has been able to maintain this budget for the past 3 1/2 months. He was able to build up a small savings for the first time in his life. He used his fifth pay check for Christmas shopping and was very proud to be able to get his daughter some nice gifts this year. He didn't go crazy but was able to pick up some important things in a young girls life. He even voluntarily put the rest into the savings account just in case something comes up.
With a lot of dedication, I believe he will be able to succeed with this budget plan. Hopefully he will be able to find a job making better money someday, but at least we know he can make ends meet for now. Hopefully his story will help someone else be able to see the light at the end of the tunnel and set up their own budget plan.
"My Story" is a regular feature of The Dollar Stretcher. If you have a story that could help save time or money, please send it by MyStory@stretcher.com
Take the Next Step:
- Find out why you might need a spending plan instead of a budget.
- Get some smart financial suvival tips from a woman who survivied 5 years of job losses.
- Learn ways to adjust your lifestyle and your budget after divorce.
- Stop struggling to get ahead financially. Subscribe to our free weekly Surviving Tough Times newsletter aimed at helping you 'live better...for less'. Each issue features great ways to help you stretch your dollars and make the most of your resources. Subscribers get a copy of Are You Heading for Debt Trouble? A Simple Checklist And What You Can Do About It for FREE!
Share your thoughts about this article with the editor.
I often wonder if I should be seeking professional help to get my debt under control! Tell us: Yes, I'd like to find out if I am a good candidate for credit counseling or No, I don't think I need couseling but I would like to find out how I can pay off my credit cards more quickly.
More Debt Tips & Tools
- 6 smart strategies for paying off your credit cards
- 5 great second jobs to bring in extra cash
- Pay down debt now or save: Here's how to choose
- Can I get a debt consolidation loan with bad credit?
- I stopped going to college but they want me to keep paying my student loan
- Cutting the burn during tough times
- Digging your way out of a financial hole
- This week's Readers' Tips
- Reduce your debt with this free debt course by The Dollar Stretcher
- Am I a good candidate for credit counseling?
- Do I have a debt problem?
- Reduce your debt payoff time
- Calculate the real cost of your debt
- Reduce credit card debt calculator
- Debt pay-down calculator
- Calculate the true cost of paying just the minimum