Activity 3 is to make a Balanced budget....balanced.I already have a budget set up (see the 2014 budget tab), but I wanted to go through this process to have the opportunity to really look at everything. So, I decided to download Gail's Build-a-Budget Excel download.
I made a few additions and a few deletions to account for categories we do, and don't have - and for variable expenses, I used the average numbers from 2013. The big caveat here is that i didn't adjust Jordan's income to 2013 numbers - I've used his new base salary which is much lower (he's now half on commission).
So! If we made no changes, we'd be in deep ca-ca over spending by almost $1,700/month!
But we're not going to do that, no siree!
Here's what we're actually going to do:
Yes, yes, I know that the total is still a negative, but that payment won't be made unless Jordan's commission is at least that amount.
This goes back to my promise a few days ago. When we get Jordan's Commission pay - the first thing we're going to do is add extra to the escape - that's what the new Escape Snowflakes tracker bar is all about. Plus, this doesn't include the recent change to our phone/tv/internet which will be going down.
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I'm kind of confused. Does the second scenario work because you will cut all discretionary spending to $1200 per month? How are you going to do that?
ReplyDeleteIn the first scenario, I used what the average monthly total of what we actually spent in 2013 on variable expenses was, but with his new 2014 salary. I wanted to see what would happen if we made no changes to the budget w/ his new salary.
DeleteHis new base salary is $25,000 lower than it was at his old job, so we've cut a tonne of budgeted/planned and hope he's able to earn what he's 'missing' through commissions. I don't want to budget for money we don't have yet, so the commissions aren't included in the 2014 plan.
We've also just started using a spending journal (more on that later), and that should help us stay accountable to the budget.
It looks like you have everything under control. It is always so brave to post about money problems/debt. It has been a long road for us. I'm not saying that we will never have debt again but it is wonderful to live without it. We have the mortgage but we are chopping away at it. We may need another car in a few years or less but I hope to have enough saved up at that time. Fingers crossed.
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