Over the past few months we have been working on saving money. My husband and I both work full time jobs, but we never really set up a true budget. We would write down our expenses, but we didn’t really track how much we were spending in each category (Dining out, entertainment, etc.). A few months ago I started a real budget, and it really opened my eyes to see where our money was going and where we could improve.
Why We Started Budgeting.
I was lucky enough to get out of college with a small amount of student loans, but my husband has a graduate degree, so we are still chipping away at his student loans every month. If anyone has ever been to grad school, then you know how INCREDIBLY expensive everything is. In fact, his student loan payment is our largest bill each month. Yep, even larger than our mortgage.
Categorize All of the Things!
The first thing I did was create a (free) spreadsheet using Google Sheets. I separated everything we typically spend money on (Housing, Auto, Groceries, Etc) into its own column. From there, I added ALL of our purchases from the month, divided by its respective category. Categorizing all of our expenses really helped to pinpoint where we could improve our spending.
After all of our expenses were divided into their own category, I also added in a separate column for our income. We both get paid bi-monthly, so each time we receive a paycheck, I fill it in on our spreadsheet. Seeing our take-home pay minus our monthly expenses really helps to keep things in perspective.
Automate Your Savings.
In addition to adding up all of our expenses, we also decided to start keeping track of our savings. We have always automated our checking account to deposit money into our savings account every month. Now that we have our budget in place, I also make sure to add in how much we are devoting to savings. This helps to ensure that we aren’t overspending in other categories that may prevent us from having a nice nest egg in the future. Even if its not a lot, it will add up over time! 🙂
Now that we know exactly where our money is going, we can adjust our spending. We know our long term goal is to have all of the student loans paid off. I used NerdWallet’s (free) student loan calculator to see how much we would have to pay to get the student loans paid off entirely. Seeing the number we need to pay each month toward the student loans helps us to budget everything else around that number.
Develop a Minimalist Mindset.
Unfortunately we don’t have the luxury of being able to just throw a huge amount of money at the student loans every month, so we are changing our lifestyle quite a bit. We recently got rid of our cable and downgraded our internet speed to get our bill down considerably. We stream shows and movies through Netflix for under $10 a month. We don’t have a landline, and our cell phones are both paid for, but we are thinking of switching to Ting or Republic Wireless since they offer very low rates for monthly cell service. We also bundled our auto and home insurance to save about $40 a month.
In addition to cutting back our monthly bills, we are also cutting way back on our dining, entertainment, and lifestyle expenses. We very rarely eat out, and I recently discovered freezer meals, so that has really helped cut our food budget way down. I have also cut back on buying clothing and other miscellaneous items (that cute lipgloss at Target, anyone?). This has forced us to get creative and use what we have. Someone recently gave me some body wash in a scent I don’t love, but you better believe I am going to use it up anyway 🙂
So there are just a few things we have tried and seem to be working for us. Until next time…cheers 😉