Thursday, July 18, 2013

Thrifty Thursday: Determining What Bills you Have

I was watching Dr. Oz when I got inspired for my new Thrifty Thursday series on Budgeting.  I have never directly blogged about budgeting but I think that it is super important.  I have written a few posts in the past about tracking usage of things that you use, getting organized before going to the grocery store, and keeping on track.  I even did a post on what being frugal means to me.  But I have never done a post on actually going through the process and setting up a budget so I thought that I would try it.

Step 1:  Identify the bills that you have any where your money is currently going.  Make sure that you calculate all of your expenses without leaving out any important ones (even those that come up only once a year).  Pull all your old bills and get them together.

Seem like an easy step or the hardest possible question? I think that we will know if you have even thought about a budget by whether you can get all of your bills together and see what you have.  If you don't have the paper copy of the bills, jot down information from your bank account or check register for all of the bills that you have paid previously.

Here is a sample of our spreadsheet listing of all of our family bills:

Type of Bill
Gas bill
Electric bill
Home Phone bill
Internet bill
Credit Card bill
Mortgage Payment
School Payments
Trash (paid quarterly)
Water (paid quarterly)
Car insurance (once a year)
House insurance (once a year)
House taxes (twice a year)
Car tax (once a year)
Car tax (once a year)
Federal taxes (once a year)
State taxes (once a year)

I worked with people in the past and there are a few other bills that come up for others:

Cell Phone Bill
Car payment
Home Owners Association Fee
Store Credit Cards
Hair and Nails
Entertainment (includes movies and hobbies)
Eating Out (some people include this in the food budget or entertainment...just make sure you include it)

Do you have any other expenses?  Make sure you really think about the whole year and all the things that you pay money out of your bank account, credit card or cash out of pocket.

Did you have trouble finding past bills?  If you really can't find bills, make sure that you start the information from this day forward.  It is never too late to start and just because you don't know how much last month's phone bill was doesn't mean that you can keep this month's bill as soon as it comes in.

If you think about the eating out category and you are trying to figure out what to budget, start at the beginning.  Do you go out for coffee every morning?  Do you go out to lunch with work friends every day or just once a week?  Do you enjoy pizza or take out with your family?  Do you go out to dinner with your spouse or family?  Remember stopping to grab that soda at the 7-11...add it in?  Don't be scared by the numbers but be realistic.

I take all the list of expenses and type them into excel.  I like to use excel because it lets you add with formulas.  It also lets you block out the months that you don't have to pay the bills like federal and state taxes are due in April.  The car  tax is due in October.  I black out all the other months and just have a number in the one month.

Remember that this is just a determination of what bills you have and not setting up a budget!!! Just figure out what you are spending.  It might seem like a hassle to set up a spreadsheet but I just use the same spreadsheet year after year by copying last years spreadsheet to a new sheet to get ready for the new year.  It means that I get organized once and I am all set as long as I update the spreadsheet.

Did I give you enough for the first step?  This is usually how I do it for friends and family.  It does seem like a lot if you have never set up a budget but it the first step to figure out where the money is going....stay tuned for next week and step 2!

If you are interested in this post, here is the link to all of the posts in the series:

Figured out expenses
Figured out our income
Made a Spreadsheet
Making a Budget
Setting Your Budget and Spreadsheet
Budget Busters
Take the Emotion out of Budgets

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