Now How the Heck Do I Save Money?
I realized the other day that I we have about 8 months until the big day, and I need to get my saving butt in gear!! Now I won’t discuss specifics, but let’s just say that the wedding that we’d like to have is not inexpensive. We will be sharing the expenses with both of our parents, however we need to contribute a substantial amount of money. Luckily for me I have been saving for a while. I technically already have the amount of money that I need, but I’d like to not COMPLETELY deplete my bank account.
My cousin, Jenny, who is now the mother of three (one of whom is one of our ring bearers), is VERY good at saving money and organization in general, and was kind enough to share with me her excel. I’ve been keeping track of my finances with excel for the past 2+ years, so I at least have an idea as to what my expenses are, however I haven’t truly kept to a budget. I just don’t spend every drop of money I make.
So, what is my plan? Well here are the basic steps to making a budget. Obviously this can apply to any big ticket item you’d like to save up for (i.e. a car or a house or even a tv)
- Determine where you’ve been spending your money
- Determine what your fixed and essential expenses are (rent, utilities, gasoline, car payments, etc.)
- Determine other essential expenses that can be slightly variable (mostly food)
- Determine what other areas you are spending money (eating out, going to the movies, taking dance classes, buying clothing)
- Determine your monthly income (I am choosing to use my base salary after taxes and other things are already taken out) Are you getting paid 2 times that month, 3 times? We get paid every two weeks, so some months, I actually make more!!
Now you can set a budget
- Make a column of credits that include all sources of income (Make all of the numbers positive)
- Make a column of debits that include your expenses determined above (Make all of the numbers negative)
- Sum each column
- The difference between your credits and your debits is the amount that you can save each month
- Look at where you can cut money (mostly your fun money, not your essentials. You should probably pay ALL of your rent/mortgage)
But what about special big ticket items?
- Make a separate tab that has a calculation for big expenses (i.e. trips and Christmas)
- For the month that it applies, add it to your total debits. For example, we are going to Purdue in November, so in addition to my expenses listed above, I am subtracting out the cost of airplane tickets, hotel room, food, and football tickets.
- This means that I won’t be able to save as much that month.
To determine how much I can save in the next eight months:
- Take the total amount you currently have in your savings account.
- Add to it the savings amount you determined for each month.
- Voila, you have your projected savings!!
And now the biggest step of the entire process: FOLLOW YOUR PLAN! Check in every week, how much have you spent of your allotment? Are you still on track to save as much as you’d thought?
This all my seem boring and common sense, but it’s amazing how much a little organization and having an actual goal can help you minimize your spending and maximize your saving.
Do you keep track of your finances? What are ways that you save money? What are you saving up for?