I need a budget help!

[Brokemofo]

I must admit I've never had a budget. Due to my recent layoff I started thinking seriously about finances thus joining this site. What advice can you pros give my Wife and me about creating a budget? Do I make the budget assuming an income for me, or do I look at worst case scenario and assume not finding work right away? Also, is there any online form or template that would help us plot it all out. Thanks....

[LuxLiving]

Many here use mvelopes or YNAB (youneedabudget.com).

[sweeps]

How much in reserves do you have to survive the layoff?

I would definitely cut out any unnecessary items right away. Then -- depending on how much cash you have to tide you over until you find another job -- you'll have to get even more aggressive with the budget, and cut some things that are really painful (but you can still survive).

My advice on creating a budget is getting an accurate picture of what you are spending money on and how much. This means actually looking at credit card statements, past bills, receipts -- the REAL data. Before I started getting serious about budgeting I could've sworn I was only spending $200/mo on eating out. Turns out that figure was closer to $400-$500/mo.

[noppenbd]

Read Dave Ramsey's book "The Total Money Makeover". For someone in your shoes he recommends writing a list of all expenses starting with essentials (food, lights, shelter), moving through wants (phone, cable, savings), down to luxuries (vacations, new car, etc). Work off of your wife's salary to start and go as far down the list as you can. When you get some income coming in you can start to move further down the list.

[skydivingchic]

I'd recommend a combination of sweeps's and noppendbd's advice. Sit down and go through past bank, CC, and billing statements to figure out how much you are actually spending on things. Don't forget to include bills which are due periodically but not monthly (insurance, vehicle registration, etc). You'll also need to estimate what you spend each year for things like car repair, vet visits (if applicable), gift giving, etc. Then prioritize the bills and see how much of it you can cover on just your wife's salary.

Do you have an EF to draw from while you are doing your job search? In the meantime, cut out unnecessary spending in order to stretch your wife's salary as far as possilbe. Once you do find a new job, make refunding or starting your EF a priority.

Line items on my budget that may help you get started (savings for my 401k, health insurance and short to mid term stuff is already taken out of my check, so I don't have a seperate line item for those types of things):
Mortgage
HOA Fees
Electricity
Cell Phone
Gym Membership
Car Maintenance
Gasoline
Car Registration
Cat Care
Medical (doctor copays, prescription costs, etc)
Insurance (vehicles, condo owner's, etc)
Spending Money
Groceries
Roth Contribution
Mvelopes Subscription
Personal Care (haircuts, toiletries, etc)
Gifts

Hope that helps you get started.

[Brokemofo]

Thanks for all the advice so far. When I have more concrete info, I can post some dollar figures. Luckily, I have been given notice that I am layed off. I actually get to work for 2 months, then I get 2 months non-working pay, then a lump sum severance pay of 8 weeks salary. I have about 6k in savings at the moment. Since joining this site, I have already cut a lot of spending like the aforementioned "eating out" which we do a lot. Keep the ideas coming folks, and thanks.

[maat55]

I have my budget setup on excel. You can just write down every monthly expense and then your yearly expenses and divide by 12. This is a good time to trim if you choose.

Write the list, then off to the side write what accually got spent for that item. I keep a months amount of working capital, then pay the bills as they come.

[LuxLiving]

Four A's -

Account -look at what you ARE doing
Analyize -where could you do different?
Allocate-where's the best use of your dollars?
Adjust - make small changes as you go.

rinse. repeat.

[Brokemofo]

Ok, I sat down this morning with my Wife to go over our expenses. I must admit I had no idea what we spent on what and how much. My Wife pays all the bills and does all the shopping, so I'm basically clueless. I enjoyed going over the last 6 months bank statements to learn what we spend. I feel better now knowing kind of where we stand. If I don't get a job right away I believe we can continue on the same pace we've been on for at least the end of the year or maybe longer. Things will be better if we stop spending or at least cut back in any category. I am taking this time to basically change the way we live and have lived for the last 15 years since we got together. Some things I am considering:
1. Drop Netflix, actually I just did this morning.
2. Stop or drastically reduce eating out at restaurants.
3. Drastically reduce what we have been spending on Niece's, Nephews, Siblings, etc.
4. Reduce expenses on Gifts.
5. Look for ways to reduce grocery bill bye buying smarter.
6. Make less frequent trips to grocery store and buy what we need all at once thereby saving gas and trips.
7. Do Grocery shopping on the way home from work since She drives right past the store instead of coming home, and then going back out to a different one later.
8. We have a truck, car and mortorcycle all financed. I am evaluating keeping or selling any or all of them to try to get cheaper vehicles that are maybe paid for or at least much smaller payments. We've been guilty of buying many new cars over the years. Boy what a waist of money that has been.
Anyway, These are my initial thoughs on what we are trying to do, and here is a list of our average expenses over the last 7 months.
Mortgages 2100
Truck 546
Car 380
Motorcycle 300
insurance 285
Cell Phones 75
Electricity 100
Natural Gas 150
Water 30
Sprinklers 40
Property Tax 85
Groceries 630
Veterinarian 100
Golds Gym 40
Personal Care (Haircuts, makeup, etc.) 90
Gifts 10
Satellite 143
Phone/Internet 100
Car Maintenance 150
HOA Fee 17
Netflix 10
lawn Care 16
Sewer 15
Trash 17
Medical 50
5479 Total
This does not include Gifts for each other, Parents, friends, or Siblings. It also does not count expenses on stuff we don't need like golf, poker, dvd rentals, large purchases I would normally make like tv's, funiture, ipods, etc.

I hope this helps you all give us some more insight into our life changing budget.

[geojen]

Ok, I sat down this morning with my Wife to go over our expenses. I must admit I had no idea what we spent on what and how much. My Wife pays all the bills and does all the shopping, so I'm basically clueless. I enjoyed going over the last 6 months bank statements to learn what we spend. I feel better now knowing kind of where we stand. If I don't get a job right away I believe we can continue on the same pace we've been on for at least the end of the year or maybe longer. Things will be better if we stop spending or at least cut back in any category. I am taking this time to basically change the way we live and have lived for the last 15 years since we got together. Some things I am considering:
1. Drop Netflix, actually I just did this morning.
2. Stop or drastically reduce eating out at restaurants.
3. Drastically reduce what we have been spending on Niece's, Nephews, Siblings, etc.
4. Reduce expenses on Gifts.
5. Look for ways to reduce grocery bill bye buying smarter.
6. Make less frequent trips to grocery store and buy what we need all at once thereby saving gas and trips.
7. Do Grocery shopping on the way home from work since She drives right past the store instead of coming home, and then going back out to a different one later.
8. We have a truck, car and mortorcycle all financed. I am evaluating keeping or selling any or all of them to try to get cheaper vehicles that are maybe paid for or at least much smaller payments. We've been guilty of buying many new cars over the years. Boy what a waist of money that has been.
Anyway, These are my initial thoughs on what we are trying to do, and here is a list of our average expenses over the last 7 months.
Mortgages 2100
Truck 546
Car 380
Motorcycle 300
insurance 285
Cell Phones 75
Electricity 100
Natural Gas 150
Water 30
Sprinklers 40
Property Tax 85
Groceries 630
Veterinarian 100
Golds Gym 40
Personal Care (Haircuts, makeup, etc.) 90
Gifts 10
Satellite 143
Phone/Internet 100
Car Maintenance 150
HOA Fee 17
Netflix 10
lawn Care 16
Sewer 15
Trash 17
Medical 50
5479 Total
This does not include Gifts for each other, Parents, friends, or Siblings. It also does not count expenses on stuff we don't need like golf, poker, dvd rentals, large purchases I would normally make like tv's, funiture, ipods, etc.

I hope this helps you all give us some more insight into our life changing budget.

Do you have kids at home? 630 bucks for groceries a month is totally nuts if it is just you and your wife. You should look into the advice in the Groceries section of the forum for tips on how to reduce your grocery bill. Using coupons and coupon stacking is a great way--specially if your local stores double coupons. At first it may seem like a drag, but I have found it to be fun once you get going--a challenge, if you will, to keep saving more and more money every time I go to the grocery store.

[skydivingchic]

I agree with geojen that if it is just you and your wife, the grocery budget is pretty high. DBF and I live in San Diego (high cost of living area) and I budget $400/mo for groceries. We usually spend about $350 and we could pretty easily cut that back to $250-$300ish if I made the effort.

Its good you sat down and got a good idea of what you are spending and where. Now its just a matter of deciding where you can cut back.

[JoeMoney]

Budgeting is NOT taught very well. My wife complained about her mother using envelopes... but it worked. A budget is nothing more than discipline. Get the emotions out of it and learn to say no to each other ( and kids if present).

The world is converting to a subscription basis for everything. cable, Phone, Services, Internet, Bill pay services, yard services. Water, gas, food and milk have not caught up yet. It is amazing how much money one can find in little tiny subscriptions and the like.

If you are a websurfer or a ring tone buyer, watch out. You could be sucking in ten little items at 9.99 each. That is $100 a month!

As mentioned elsewhere in here- Get yourself a living update financial statement. Pick up "Rich Dad Poor Dad" and start to think about where money comes from and where it goes and where it is best used. Inside his books and courses Kiyosaki has a nice little financial statement method. You can make your own. Bottom line is make it nice, neat, tracked and professional. Why? Because you may need to take it to a bank to get your loans. Dont be like 95% of the world and treat money and reporting of it as a chore that is insignificant. You get bankers and money people impressed with your professionalism and the world can open up in ways you did not expect.

Good luck!

[Brokemofo]

Do you have kids at home? 630 bucks for groceries a month is totally nuts if it is just you and your wife. You should look into the advice in the Groceries section of the forum for tips on how to reduce your grocery bill. Using coupons and coupon stacking is a great way--specially if your local stores double coupons. At first it may seem like a drag, but I have found it to be fun once you get going--a challenge, if you will, to keep saving more and more money every time I go to the grocery store.

No, we don't have kids at home, but last year my Parents and my Brother, his Wife and 2 kids moved near us from California. Part of the grocery bills for the last 7 months was definitely feeding more than just the two of us. Recently, like at Easter Dinner, we had everone bring a dish, so we didn't have to foot the bill for the whole meal. Things like that will save us I'm sure.

[Brokemofo]

Update:

My Wife came home tonight pretty excited about how much money we've saved since starting this thread. She added up what we've spent on 6 different categories on the list I showed you all, and we have shaved expenses by over $600 this month. I've created a monster! She actually is using coupons to buy groceries. We haven't eaten out once except for the one time at the casino where I had $140 in comps available to use from my time playing poker last year. Anyway, I'm sure we will get better at all of this. It's comforting to feel like I'm in control of my finances. I am having trouble deciding whether or not to sell the home and 2 cars to save even more money, but I'm sure it will become evident at some point.