I have decided to start a finance series to document my debt-free journey. I was inspired to start this series because we do not talk about finances enough. It is such a taboo topic but it shouldn’t be. Money is an important resource that allows us wonderful opportunities. Having honest conversations surrounding finances can help us to make smarter decisions and build wealth. As part of this financial series, I have decided to share my monthly budget and an update of how spending compares to that initial budget.
Goal: To share my journey of paying off my debt. I currently have two credit card balances, a car loan, and student loan debt that I want to pay off by my 25th birthday which is a year and a half.
To determine my budget for April, I start by estimating how much income I will make this month. My income varies as both my full-time and part-time job are hourly. At my full-time job, I receive about the same pay every pay period but it can vary depending on the amount of overtime I work.
This month, I anticipate I will work a min. of 10 hours of overtime at my full-time job. In regards to my part-time job, I was furloughed due to the current pandemic. However, my part-time has been gracious enough to pay us until March 28th so I will receive some income from that job.
Once I determine the min. I will get paid for the month, I work backwards to create a budget that will account for all the money that I make during the month of April. This ensures that I know where every single dollar will go. This is called the zero-based budget.
And just in case my actual budget is more or less than my anticipated income, I create monthly financial goals to help me determine how to adjust my budget.
Below I have showcased my budget for the month of April. I have decided not to show my actual income and the amount of my bills. Instead, I am sharing what percentage of my income goes where.
*If something does not make sense please let me know so that I can work to improve it.
Monthly goals:
- Pay off credit card 1
- Pay off credit card 2
- Any extra funds go to paying off my car
Income
100%
Monthly Budget Overview
Essentials
- Rent (37.42%)
- Renter’s Insurance (.52%)
- Car (11.32%)
- Car Insurance (4.51%)
- Groceries (3.23%)
- Personal Care (1.61%)
- Gas (.65%)
- Internet (1.61%)
- Cell phone bill (.65%)
Savings and Debt Repayment
- Savings (.65%)
- Credit card 1 payment (15.08%)
- Credit card 2 payment (22.75%)
Discretionary Fund
None
Budget: 100%
