Most people, once they get serious about managing their money, will draw up a monthly budget plan with things like housing, credit card payments, car payments, and utilities. This part works well but where things fall down are with weekly or even daily expenses. Things like groceries and other little things either don’t get included or are incorrectly estimated. Drawing up a weekly budget in addition to a monthly one helps break this down into a more realistic and manageable size and will make it easier for you to get from paycheck-to-paycheck.
Stick With Cash
When you plan a weekly budget try to make it a cash only budget. By having the cash in hand rather than depending on credit or debit cards it makes it much less likely that you’ll bust the budget. If you feel that you must use a debit card, keep a notebook where you can keep receipts and track the money. Untracked expenditures lead to a busted budget.
Start by figuring out exactly what basic food items you need to get you and your family through the week. You should only budget for the basics, not luxury items. This should only include food, not any other products that you might also buy at the grocery store. Also, don’t include eating out. This is an entertainment expense. The idea is to get this number down to a reasonable figure where you’re neither scrimping or splurging on food.
With gasoline prices so high this is taking a bigger and bigger chunk out of almost everyone’s weekly budget. If you don’t keep track of this it can really surprise you. Calculate exactly what it costs you to get to and from work as well as incidental travel. Add a small buffer to this to guard against sudden price spikes that can happen from time to time. If you use public transportation, figure it into this area. You should also include any tolls or fees, such as parking fees, into this total.
There are things that you will need that don’t fall into the other categories. This might include cleaners, haircuts, medicine, toiletries, and other little expenses that you have from time to time. What these are varies from person to person and family to family so there aren’t any fixed rules. For example, a woman might be allergic to cheaper makeup and require a more expensive brand. The important thing is to have a good grip on the amount spent on these items and not to spend frivolously.
Everyone needs a break now and then and if you don’t budget for this you will soon find yourself busting the budget. It’s just human nature. You shouldn’t be excessive with it, of course, but figure out a number that you can live with. For example, in our weekly budget each family member gets $50 a week for entertainment. Remember that this number includes eating out, including eating out while at work unless it is impossible to brown-bag a meal. This should be the last thing you budget and the first area you cut in a crisis.
Save The Leftovers
There will be weeks when all of the money isn’t spent. When this happens put the money aside in a safe place. This becomes your emergency fund to protect yourself against unexpected expenses. By having this spare money set aside, you’ll be less likely to have to resort to using credit cards in many situations. Once this leftover amount gets high enough, consider placing it in a savings account where it will still be quickly available but earning interest. Don’t link this to your regular checking/debit card though. Keep them separate.
This is the kind of budget plan we’ve worked out and I hope it will help you too. Do you have a budget plan? Any questions or thoughts about this one? If so, leave me a comment.