Budget

The key to understanding where your money goes each week, month, etc. is to create a record of it. Grab a piece of paper and and let's started.


Income - What do you get paid each week, month etc.
Expenses - Mortgage, rent, food, gas, cable, insurance, phone, electric, student loans, credit cards, medical, alarm, pet care, etc

Grab your monthly statements and make sure you capture everything. Once you have it on paper, excel would be best you can begin to plan on how to make changes.

See my Example Below:

Monthly Budget Example




Income





Salary $3,910




Other $0




Total $3,910











Expenses





Credit Card 1 $169




Credit Card 2 $193




Credit Card 3 $196




Mortgage $1,500




Electric $140




Phone $50




Cable $15




Water $15




Car Insurance $155




Heat $140




Gas $210




Food $600




Eat Out $60




Lunch $25




Medical $35




Alarm $21




Total $3,524











Total Income $3,910




Total Expense $3,524




Net Income $386











Expenses Balance Interest Rate Monthly Payment


Credit Card 1 $9,886 7.9 $169


Credit Card 2 $9,286 9.9 $193


Credit Card 3 $9,723 11.9 $196
















Bill Balance Monthly Payment Division Answer Pay Off Priority Margin Rollup Months to Pay Off
Credit Card 1 $9,886 $169 58.50 3 $658 15.02
Credit Card 2 $9,286 $193 48.11 2 $489 18.99
Credit Card 3 $9,723 $196 49.61 1 $296 32.85
Totals $28,895 $558 156.22

66.86



13.02

5.57
Payment Acceleration Goal: $100
























Bill Balance Monthly Payment Division Answer Pay Off Priority Margin Rollup Months to Pay Off
Credit Card 1 $9,886 $169 58.50 3 $758 13.04
Credit Card 2 $9,286 $193 48.11 2 $589 15.77
Credit Card 3 $9,723 $196 49.61 1 $396 24.55
Totals $28,895 $558 156.22

53.36



13.02

4.45
Payment Acceleration Goal: $200




I want to focus on the Credit Cards within the example budget. They are listed using minimum payments each month. But this budget shows a surplus of $386 after all expenses are paid. If those 3 credit cards where paid off there would be an additional $558 per month. Based on minimum payments these 3 credit cards will take over 13 years to pay off.

One of the ways to pay off any loan is to increase the payment above the minimum. So I've laid out 2 examples above. Using the cash that is already within the budget. The first takes an extra $100 from the surplus and applies it to the first credit card. Taking it's monthly payment from $196 to $296. This will pay off this single credit card in under 3 years. Once that card is paid off you apply the full $296 plus your minimum payment of card 2 to that card. So card 2 payment goes from $193 to $489 and it is paid off in a year and a half. You continue this process until all cards are paid off. Look at my examples. With just an additional $100 you can pay off these credit cards in 5 1/2 years instead of 13. With an additional $200 you can paid them off after 41/2 years.

This formula can be used for an credit cards, student load, mortgages, etc and with any amount of money. It's up to you. Let me know if you have any questions.