Well – here goes nothing! After retirements, taxes and other things – I am left with approximately….drum roll for real numbers please….$5,300 per month to fund my goals. (Notice I didn’t say “…to pay my bills”. Because what kind of life would that be if we just worked to pay bills!?)
For me, sharing my bring home pay is also about helping change the culture and stigma of our hidden financial education. I believe there is a trend – a positive trend – where Americans might be starting to quietly whisper a little more loudly about the need to educate ourselves in personal finances and how to handle money.
Ensuring my teenagers have a financial education is critical.
Regardless of the ingrained parochial money taboo, my hope is that by documenting my personal journey, others may learn from my mistakes (so as to avoid making them) and be inspired by my journey to blaze new trails. To be sure, my income is either the same, less or more than your bring home. It has to be one of those three. And so I am giving myself persmission to be transparent and provide real-life examples. As I personally find real-life scenarios more educational than generic information most of the time, I hope it also helps you navigate this journey as well.
I budget till I have nothing left.
Yep – you got it! I budget till I have ZILCH left over. Nadda. Z-RO. left unplanned. This does not reflect my checking account balance in any way. The dollars in my acocunts are seperate than the dollars in my budget. I budget (a word meaning ‘to plan’) my income. I plan what I want to do with my next paycheck. My goal with each new dollar that comes to me is to give it a job immediately, and don’t let it sit there. In other words, I want zero unaccounted for dollars in my account. That’s where the zero comes from in the ‘zero based budget’. Everytime I get a dollar, I look at my goals and put that dollar towards whatever that goal is.
Had I been doing this all my life – I might not have student loans.
The screenshot of my Excel workbook (not my budget) is something I’ve recently started to use when determing my monthly spending goals. I can adjust, tweak and simulate my goals for the month based on priorities, then enter those goals into my budget as “Funding Goals”. Note I did not say “Spending Goals”, nor is this worksheet my budget.
My budget is kind of like a cash envelope budget, but digitized via YNAB. When I get paid, I distribute money in hand across those digital envelopes until they hit the goal amount – the amount we determined in the worksheet.
Currently, it is important for me to pay off debt, so that’s where the money goes. If its important for me to buy coffee at a gas station, then that’s where the money goes.
To be successful, I need to plan every dollar.
I need every dollar to be ear marked for a purpose. My purposes are defined by my priorities, and right now – my priorities lead me to getting rid of those stupid, STUPID student loans.
You can have anything, just not everything.
My budget planning Excel sheet helps align my income to my financial goals. By taking my budget categories and looking at my average spend (exported from YNAB), I’m able to make an educated decision for that category. Not a guess – a goal. I have a target, and all my target goals can’t exceed my total income. Cause well, that would be spending more than I make.
Quick note based on my goals for March. Although my average category spend might look higher – much higher – in some cases than my budget, I know YNAB’s average for a category is for the life of the category, not for the month. This helps me keep the big picture in mind as I build up a cushion in each castegory. I keep this in mind as I set goals.
Entering my expected monthly bring home pay in the table at the top, I can adjust category funding goals until they match. The small table at the top is constantly subtracting the total of my funding goals from my monthly income. When the number is “0”, everything is accounted for and my goals are established! My next step is to enter those goals into YNAB. I’ll save that for another post.
If you’d like a simple zero-based-budgeting worksheet, you’re welcome using this Excel. I left my March budget there for your reference, and if you have similiar categories. The “New” has simpler version, cleaned up and ready for you to use.
Leave a comment below and let me know how I can improve this resource, and what is working for you.