how setup a fixed budget that works?

Question

We seem to be bouncing checks more and more, eveytime I setup a budget it seems to get blown right away. How do you setup a budget that will work.

Answer 1

stop spendning so much.

Answer 2

USE AN ENVELOPE SYSTEM. It works like this take the money you earn each month and spend it on paper. Set aside some for emergency (think of it as savings) So that if any thing happens you have the CASH to pay for it. The 1st envelope contains the rent or mortgage payment. The second is food budget for the month The 3rd is personal needs for each member of the home such as haircuts etc. Clothing goes in one even if you have little to go in the envelope it should be held till you need it. The last is entertainment. If you are not making enough then some one needs to deliver pizza's at night or something to get you over these rough spots. Bouncing checks is an expensive lesson since most can cost you at the merchant as well as the bank overdraft charge as well. YOU MUST GET ON A CASH ONLY BUDGET! This is the only way to make the money you have behave. If some thing comes up then you have to have another budget meeting between you and your spouse to make another Budget. You have to have this meeting every month just to be in accord with one another on how the money is to be spent any way. So sometimes you have to do this 2 or three time a month just to get through the month. YOU BOTH HAVE TO AGREE!

Answer 3

The key to developing a budget is starting with what you're realistically earning and what you're realistically spending (not your goals) per month. You should know what your fixed costs are at this point - rent, income, utilities, etc. Get fixed income on one side of the page, and fixed costs on the other side. Add as (a fixed expense) a small amount (10% of your income) for savings/emergency funds. At this point, when you add them up, your fixed income should exceed your fixed costs, and the leftover is what you have for discretionary spending.

At this point, you can add what you realistically spend on entertainment, eating out, etc. - this should come close to (if not exceed) the amount you have left, which explains why your budget currently does not work.

Now, imagine your savings as a pitcher of water. Your income fills water up from the top, and your expenses are a hole in the bottom that leaks water. When you're trying to get some savings, you're either going to need to:
a) add more water from the top
b) plug the hole at the bottom

Your job here is to balance this budget, either by finding a way to generate more income, or to reduce discretionary spending. You don't have to give up going out to dinner or the movies, but you do have to understand that you'll need to work harder to do so. If you were overweight, the answer wouldn't be to starve yourself - it would be to reduce what you eat and exercise to attack the problem on two fronts. Financial budgets work the same way - reduce extra spending, but also consider where you can increase income.

Also consider that if you are living modestly and earning decently and still can't balance your budget, you may be living in too expensive a house/apartment. Reducing that fixed cost to 15-20% of your gross income can help dramatically.

Answer 4

You need to start using cash! Stop credit cards,debit cards,and checks!