It’s one of the biggest downfalls for everyone and yet we all NEED one to not only figure out our daily expenses are but how to reduce our debt and increase our savings. Many of us have tired various methods and have heard of various ideas such as the envelopes, the jars, how to make the spreadsheets, etc. BUT BUT…………………. Do you know how much is suppose to go in those jars? Or how many categories do you need? Or how many sub categories? I can’t speak for others but that is my weak point. I make my “expenses” for example but I break them down way too much and than have way too many categories and get way too overwhelmed and well I trash it!
Due to the magic land of TV and more and more shows dedicated to real life things such as coupons and debts; many of us are very familiar with Gail Vaz-Oxlade ; She no longer chooses people and goes to their home to help them however this is the information wheel she use to refer to.
The first thing is we need to do is remember the budget wheel and know what the % of your income needs to go in what category. When watching the show with Gail the other day I made a note of what percentage goes where??
- 15% Debt Repayment
- 10% Savings
- 25% Living
- 15% Transportation
- 35% Housing
I often here that people cannot do the math so let me break it down for you.
If your income is $1000 per month:
Rent should not exceed $350
Living Expenses $250
Debt Repayment $150
Obviously this is not perfect and you may to make some smaller to allow others to be larger.
If you walk just about everywhere and have no debit; your $150 debt amount can go towards housing, you could put $100 of your transportation money towards rent allowing you up to $600.
- Everything Else
When inputting your income only count guaranteed income such as your pay, pension, family allowance, etc.
This is a GREAT Place to get started and get things set up to put you in the right direction! We will have other posts in the future on how to eliminate or lower some of those expenses & ideas on what to do with the left over extra money from your jars from learning your new tips & tricks!