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Queen of free: Create basic family budget

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If I could sit down at your kitchen table and share one life skill with you, it would be how to budget.

Perhaps you are a numbers ninja and your head is filled with dreams of spreadsheets and ledgers in the late night hours. This column might not be for you (but keep reading anyway because you might learn a new ancient budgeting secret, and we both know you are always looking for ways to improve your bottom line).

However, if you are like most of America, you might not even have a clue as to where to begin when it comes to budgeting for your household. Or even if you have tried your hand at budgeting before, it has come to a miserable halt and you feel stuck.

Fear not, the Queen is here with her favorite tips for basic budgeting.

You have to change your mindset. Most people consider budgets a bad word (the worst “b” word out there). So you have to begin by realizing that a budget is not something meant to penalize you or hold you back.

Conversely, it is meant to help you live more freely and remain in control of your finances. There was a point in time that I felt unsure about how much we had in the bank and/or what was left to spend for the month. Having a budget does not mean you won’t have any fun. Until you change your mindset, your efforts at budgeting will not be successful.

Begin by tracking your expenses. For 30 days, collect all of your receipts. Throw them into a jar or envelope (and have your spouse do the same).

Spend regularly. Don’t be an Ebenezer Scrooge or a “Real Housewife” of any city. This is key to get a good handle on where to set your categorical spending. Being unrealistic in either direction will skew the results. At the end of the 30 days, go over the receipts to gauge how much you really spend per month and on what.

Be sure you know how much you make, too. This sounds ridiculously simple, but you must spend less than you make. So you have to have a good handle on what you currently make. If you have irregular income, look back over your tax returns to see your numbers over three to five years to project this year’s earnings.

Tame your tongue. Most people veer off budget when it comes to food — either the grocery store or the drive-thru. You have to be intentional when it comes to feeding your face (yes, I can see you hiding that mound of restaurant receipts).

This means that you must develop a plan. It is totally fine to dine out as long as you budget for it (and have the cash to cover the cost). Tracking your expenses over the last 30 days or, even better, year, will help you determine just how much of your hard earned cash is slipping through your fingers and into the cash register at your favorite burger joint.

Operate on a cash-based system. You spend less money when you use cash than plastic (even if that plastic is a debit card). This is true even for a frugal girl like me. It does take a little extra effort, but overspending even if it is only $5 to $10 each week really adds up quickly.

If you have cash, you will stay on track. When the cash is gone, it’s gone, and you’ll either have to be finished shopping or make some hard decisions about what items you don’t really need.

In the beginning, have weekly budget meetings. I know this might seem intense, but you need to over-communicate with your spouse when it comes to finances.

Money problems are the No. 1 reason for divorce. You cannot talk enough about the dollars and sense (like what I did there?) in your house. Of course, you need to approach such meetings with humility and grace.

As you begin to work together on your finances, you might relax into more of a monthly meeting status. But for some of us, we need to communicate on even a daily status about income, bills, expenses and household needs.

Relax. Budgeting isn’t hard. It isn’t going to steal your joy. And once you get a system that works for your family in place, it will feel like an old friend. Over a lifetime, budgeting can turn you into a millionaire. Who wouldn’t want in on that?

Greenwood resident Cherie Lowe and her husband paid off $127,000 in debt in four years and now live debt-free every day with their two kids. Send questions, column ideas and comments to newstips@dailyjournal.net.

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