How do you do this? A Written Cash Flow Plan
You look at what you have coming IN for the month in advance-that would mean you sit down NOW to figure out what March will look like and what needs to go OUT… you decide in advance of the month, where your money needs to and will go.
You will find your best success will come from setting a 'limit' on your spending in areas that can get away from us such as entertainment, eating out, kids asking for lunch money, the last minute trips to the grocery store. For me it was eating out. I'm embarrassed to admit this, but we were spending $1200-$1300 PER month eating out! We were both running businesses and we had kids in after school sports and also on leagues after the school sports ended. Most nights, that meant we were not eating until after 8pm. Most weekends were also spent in another town for most of the day.
When I actually decided to start getting back to "budgeting basics" two years ago I had to pull my 'records' to see what I was currently spending on each category-for most of us that means looking up all the charges and debit transactions and adding them up. Even though my balance was paid each month, I was SHOCKED at how much we were spending on this one category. Whether we could afford it or not was not the issue, it just seemed excessive to me. I became concerned about the expensive 'habit' my children were 'inheriting' from me! I didn't want to be the one responsible for their inability to manage their financial lives because I became oblivious to how much we spent on this behavior each month. I HAD TO come up with a new 'habit' amount and try to stick to it. This also meant I had to figure out a number for groceries. This took some guessing on my part because I had not cooked more than once or twice a week in what seemed like five years.
But I was determined! I established an 'envelope' and set up new monthly spending LIMITS for our family of four (+ 2 every other weekend) in the following areas:
- EATING OUT - This envelope is labeled "entertainment & eating out'
- GROCERIES -Keep my coupons in here as well
- GAS - Ha! Been beating this one lately and having extra each month!
- CLOTHING - Keep my coupons in here as well
Was has winning this game done for me? I was able to reallocate that 'excess' spending and pushed that $400 extra per month onto the car loan I had and I was able to pay the car off early!!
That was the last debt on my debt snowball so now those dollars go to the mortgage each month and that will be paid off earlier too!
It's empowering to win with money. Not to just have it. Not to just earn it. But to really win with it. I'm going to win at this money game and I'm determined to help other families do the same!
Check out my services at sickofthehustle.com
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