Till Debt Do Us Part
If you’re doing a money jar budget or an envelope budget, you might need some help determining what your budget should be for all the categories in both your fixed and variable expenses.
Here’s some help for deciding how much should go in each jar.
-Write down all your fixed expenses
-Write down all your variable expenses into a budget
Does the budget balance?
If there is money leftover, this is a good thing. If the numbers don’t jive, you need to do some crunching and some trimming to make this work. The goal is to have more than enough money to cover your bills and your variable expenses. If you’re allocating $200 a week to groceries, for example, but your numbers aren’t balancing then it’s time to trim that number.
Once you’ve made the numbers work, take your monthly earnings and divide it into 4. This is the amount of money you have per week to work with.
Divide the amount of the variable and fixed expenses into four and this is the amount of money you need per week to cover all your bills and have money to put into your envelopes or jars. Do you have money left over? If so, this amount can be divided between savings and debt repayment. The sooner you can pay down your debts, the more money you’ll have to put in savings and your jars.
Here’s an illustration:
Gail makes $3,000 per month.
Her fixed expenses come to $1,600.00 and her variable expenses come to $1,200.00.
She crunches her numbers and trims her variable budget to $1,000.00. With the $400 leftover, she pays $200 extra to her biggest debtor and the other $200 goes into savings.
Here’s a breakdown of her variable budget jars:
$125 weekly to food: $500 total
$50 transportation : $200 total
$25 clothing /gifts $100 total
$20 Entertainment : $80 total
$30 Emergencies: $120 total
If during the week any budget jar needs excess funds, Gail will need to borrow it from another jar. And, if any jars have money left over, you can then save it in your emergency jar or envelope for any unforseen expenses in a future week.
Budgeting is hard work but doing so is the best way to get yourself out of debt and save for the future. With a budget you can spend confidently, always knowing what you can and cannot afford. This equates to true financial freedom!
The road to getting debt free for me started with watching Gail Vaz – Oxlade’s Till Debt Do Us Part. Gail has a common sense approach to dollars and cents and her show takes couples and teaches them how to live on a cash budget and get out of debt fast. Watching her show gives you an easy formula to follow for your own debts.
Living below your means, spending with cash, watching your spending and putting away money for the future are things most people don’t do. Starting a money jar budget system taught me to really watch how our money is being spent and it’s not constricting; instead it’s actually liberating to see how easy it is to get by with our new method of thinking and spending.
PS: Buy one of Gail’s books!