Operation Get Life Together: Zero Based Budget Explained

The first thing Big Daddy and I did was to sit down and make a list.  In truth, I sat down and made a list, he sat down and watched LOL

We listed out all of our incoming monies.  His paychecks. Our fear was that we were upside down….more month than money.  We added that all together and then we moved on to the scary part.  ALL his travel checks, OT (if he has it), kids monthly bill payment to us goes directly to our debt.  He has a travel check monthly.  He has taken some overtime to help us out and we are trying to sell some unnecessary things….equipment, clothes, etc.  All this goes towards debt.  It is an EXTRA payment that goes towards the principle.

We listed out all our bills.  We wrote down every single thing we could think of…nothing was off limits.  Even if it was small (like our fire insurance that comes once a year and is only $60).  This is listed below.

Next to each thing we put a total of what we budgeted out for the month.  I’ll spare you from that.  After we did that, we marked next to each one “D” for debt owed, “W” for want and “N” for need.  Distinguishing between your wants and needs is huge.  We went through the “wants” cause, obviously the needs and the debts have to be dealt with.  We ended up eliminating from our list, Time 4 Learning, vacation, sports, and hair.  It was painful….mainly for me.

Then, we decided what we would create envelopes for.  I actually ended up buying some clear makeup pouches and writing on the front of them what they were for and how much we were to keep out every 2 weeks, since that is when Big Daddy gets paid.  We made the following envelopes:  Clothes (40), gas (300), misc (250), entertainment (100), groceries (500), medical (50), sinking (50)..  I take these amounts out monthly.  At the end of the month, whatever is left in the envelopes (with exception to clothes, medical and sinking funds because I want these to accrue), I remove and put in my DEBT envelope.  This is what I’m going to ADD to my first debt payment…extra.

This is the list of what we take out with out tax money every year.  I just keep it in the envelope until we need it.  Birthdays (420), Christmas (1100), house taxes (1800 , veh. taxes (225), fire (60), house maintenance (50), car maintenance (50), cow/pig (800).

I add up all our bills, including what I take out for the envelopes, and I subtract that from our incoming.  To my pleasant surprise (shock really) was that we had money leftover at the end of the money.  This is money we didn’t realize we had because we hadn’t given our incoming money a name or a place so we just spend what we want to spend…when we want to spend it.  How stupid is that? So, once ALL our money is “assigned”, we have $645 leftover at the end.  ALL this money goes towards our debt!

So, for this month (September), we are able to add an EXTRA $1615 towards our DEBT (this will be explained in a follow up post).  How cool is that?

To help with your list….here is ours:

  • Clothes – W
  • Life Insurance -N
  • House -D
  • Cell -N
  • Gas/water -N
  • Time 4 Learning -W
  • Van -D
  • Snap Fitness -W
  • Equity  -D
  • Insurance (vehicles and house) -N
  • Mediacom -N
  • Groceries -N
  • Gas -N
  • Misc. (anything that is not food) – N
  • Entertainment -W
  • Electric -N
  • Student Loan -D
  • Covenant Eyes -W
  • House taxes -N
  • Veh. taxes -N
  • Cow/pig -N
  • Christmas -W
  • Vacation -W
  • House Maintenance -N
  • Car Maintenance -N
  • Animal Feed -N
  • Sports -W
  • Braces -D (paid off)
  • Dental -N
  • Eyes -N
  • Doctor -N
  • Meds -N
  • Bdays -W
  • Tithe -N
  • Fire -N
  • Sinking Fund -W & N:  This is a list of things we know we will need or want (new windows, light fixtures, lawnmower, expand chicken coop, garden, homeschool, AC unit, bathroom redo)
  • Hair -W

If you need further explanation or you have questions, please let me know.  I’ll be doing some follow up posts on our snowball debt reduction.  But first, I must pee and drink a coke.

 

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