Dollars and Sense

(obligatory Schoolhouse Rock reference)

Now that I have a shiny new job and a shiny new paycheck to match, it’s time to work out a budget.  Thanks to my parents, I have a pretty good sense sense of money management (I used to look forward to helping dad pay bills every month).  Despite that, I’ve never really set up a real budget (my college financial plan amounted to “everything goes to tuition”).  I read Dave Ramsey’s Total Money Makeover over vacation, and it gave me a good strategy for planning things out.

One complicated Excel spreadsheet and a few cute envelopes later, I think I’m ready for my first paycheck (tomorrow!).

Here it is (complete with dummy numbers to test out the math).  Everything is separated into categories (this is basically identical to the Dave Ramsey budget; I’m just ignoring things like “college fund” for now).  The idea is that every dollar be accounted for in some way, so there are categories for everything, including “blow money” (his category name, not mine).  Since I get paid biweekly but have monthly bills, I allocate half of each from each paycheck.

The bottom of the spreadsheet shows how much I’ve allocated from each paycheck, which should ideally equal the total of the check (every dollar accounted for, remember).  Currently, I’m trying to pay off student loans, so I’m sending every spare dollar to that category.  I have the spreadsheet set up to automatically subtract the total of all other expenses from the incoming total, and put that number in the Loans category so I know exactly how much I have to put towards them every month.

At the bottom of the sheet, I have several tabs.  Each one links to a category-specific sheet where I can record specific expenditures and allocations.  The trick to this is going to be entering everything diligently.  I’ll have to get in the habit of getting a receipt for everything.

A few categories, mostly those that require ongoing saving, will use the cash envelope system.  Dave Ramsey would have me use that system for everything, but I think it’s just too cumbersome.  I like my debit card, and often buy things from multiple categories at one time (shampoo and groceries, say).  Keeping track of purchases on the spreadsheet will allow me to split them up much more easily.

That’s a quick overview of my plan as it stands now.  I’ve had a month to obsess over the theories of how it’ll work; starting tomorrow, I’ll see how it holds up in practice.


9 thoughts on “Dollars and Sense

  1. Sue Klejeski says:

    I cannot express how impressed I am!!! Maybe you should set up that system for us as well.

  2. Sue Klejeski says:

    Oh, and I adore your cute envelopes! How very “Holly”!

    • Holly says:

      Thanks! I used a template from here, and made with more of that leftover paper I’ve been using for decorating. It’s a little on the heavy side, but they should certainly hold up well. Can you guess what each one is saving up for? 😉

  3. Sue Klejeski says:

    Is the top one a lens? My guess on the others is clothes, camera, entertainment, and travel.

  4. Francesca says:

    Wow. Please show me how to do this in 3 years! 🙂

  5. Sue Klejeski says:

    The really cool thing about biweekly paychecks is that while you’ll always get two in a month, every now and again you’ll get three and that’s just like a bonus when you don’t have to put money from that check into your monthly bills.

    • Holly says:

      Ooh, I hadn’t thought of that! It looks like that would’ve happened this month if I had started a couple days earlier. Oh well, it’ll happen again in March (just in time to pay taxes 😉 ).

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