Tuesday, February 17, 2009

A Different Way to Budget

The Family Financial Workbook by Larry Burkett
I came across this book about 2 years ago and have been trying to make it the only
budget I use. It has been difficult, but I always have an eye toward trying to make
this work for me. Let's jump right in. Basically, it works on something based like an emergency fund. My car lease (gasp!) requires oil changes every 5,000 miles, which I usually need four times per year. Two of those oil changes are about $80.00 and the others about $110.00. So I should budget $380.00 per year for oil changes. According to this book, I should divide that number by 12, and put $31.66 in savings monthly for oil changes. I really like this idea, because so many times these unexpected little non monthly expenses creep up on me and because of that, my monthly budget is thrown off.
This book has forms in the back that you can use to keep track of your budget, and keep track of how much you have paid out and put in to each category. The Monthly Income and Expense Form has categories that I often forget about-like renewing your license and car registration, co pays & prescriptions, and toiletries-wait, people pay for those? The book refers to those as Variable Expenses. It has some forms for Income Allocation & Budget Analysis, but my favorite are the forms for Individual Account Page. On this form I write the category on top- so Car Maintenance, and below it looks like a check register. Each time I transfer the $31.66 to the savings account I enter it there, and add it to the balance, and when I take it out for the actual oil change, I subtract it. Now, I know this is strange for a blogger, but I really love paper and pencil and writing, so this is so for me. You could probably put these forms online, and use them on your computer, or duplicate them in Excel if you are really good.
Another reason this would work for me is because I put all of my Emergency Fund Savings in an ING Account, and this way I could keep track of what the money is in there for, and the interest gained could be applied toward my main Emergency Fund Savings. I am not very creative personally that I could create these forms myself, so this workbook is perfect for me. Umm, how many times have I said that in this post? So what is my plan? To fill out the Monthly Income & Expense Form, and identify which expenses I can begin to add to my ING account and then add categories one by one, until I can get all of them funded. I realize they will never be fully funded as they will be used as needed. I would like to publish these forms online but I think that would cause some legal issues. The book is currently retailing for about $10.00 on Amazon.

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