Definition of a budget "an itemized allotment of funds, time, etc., for a given period."
At the conclusion of my pre-employment interview at Southwest Airlines in 2009 I was told that employees like to Work hard and play hard. It was a personal challenge.
Once you define your budget then you are obligated to spend your money for that purpose. Make a goal and achieve it over time. Work hard. Play hard.
Exactly one year ago it was decided that a family reunion was to take place at Yosemite National Park in California. Camping was not an option. Mrs. MBG and I were going to stay at Yosemite Lodge at the Falls.
$275/nt is an expensive hotel room for a three night visit. To have the funds allotted when the time came, it required a budget. By budgeting $50 per check for nine checks It made the reunion entirely manageable and very enjoyable.
It feels really good to set a one year saving goal and then it feels great to take the vacation. Yosemite was a small goal. Next year we have made ourselves a really big goal of an international honeymoon to Australia.
Mrs. MBG and I have had the idea in our head to visit Australia for two weeks. That idea never got any traction for a long time. Last month we decided that it was a priority to get things going by beginning to save money. The only barrier to taking this honeymoon is money. So we begin saving.
You don't need to make a lot. You just need to save a lot. Thats my theory. Setting a big goal is easy to achieve if you give yourself enough time. We are giving ourselves eighteen months to save $10,000. Only $600 each month. After less than two months we are ahead of schedule.
Consistently monitoring spending is the best thing I ever did with my money. It's baffling that budgeting isn't more common.
The new home is running about two weeks behind schedule. That A-Okay with me. Means there is more time to save up before becoming a homeowner. Turn's out I don't like to let go of cash. Increasing the Blow Money budget often translates to more savings.
Comments: Did you know my transportation budget is for more than just gas? I'm budgeting $50 each check to replace the tires on my car. Give one or more example of budgeting for a future goal or expense that you have. Explain how budgeting is helping you meet goals.
Bi-monthly budget recap
Looking back on the the previous paycheck I am happy to say I made my money sizzle. Utility expenses went down and Blow Money went up.
Sadly I am pretty sure the Utilities usually shoot up more soon. Calls to the TV/Internet company are pretty common. Seems like they don't even know what their services cost.
Consistent for most of 2015 has been a huge amount of money as a percentage going toward housing. The fact is that our current housing isn't very expensive. We pay $1,200 in rent and both my wife and I split that from each of our incomes.
Hosing costs are about to change
The reason I dedicate between 45% and 55% of my income toward housing is to build up the down payment. Paying the rent in one check and paying an amount equal to the rent toward the Down Payment in the second check of the month.
As a result of aggressive saving since becoming debt free Mrs. MBG and I have saved over $14,000. While thats a mere 5% of the price for our home. It is enough to be eligible for a conventional fixed rate mortgage.
In the budget below you are looking at what may be the very last budget for Rent. The next budget will include a little more saving for the Down Payment. Then in budgets for September there will be a category for Mortgage.
How I will buy a house the wrong way
In the back of my mind I continue to hear the chirping of Dave Ramsey and his rule: A 20% down payment on a 15 year flat rate mortgage where the payment is no more that 25% of your income.
The numbers work as they are. I have confidence that we are not going to be in over our heads. It kills me however, to think of paying on this mortgage for 30 years.
How I plan to accelerate payments
My older brother has always told me "not to compare myself to my friends". Mostly because my friends growing up were pretty reckless in every way. It's better to strive to be like people you admire.
My wife and I are pretty frugal. While we do have goals that will require big chunks of money. We are being deliberate by timing those expenses years apart. In week twenty four I mention a visual budget. We are planning for a honeymoon in Australia for October 2016. How is that for discipline? A Car and a PHD for my wife is also on the list in the next five years.
All of that to say that paying extra on the mortgage is going to be a top priority. I don't count my income before it arrives in my account. The pay scale for my wife and I has a defined runway leading to higher wages over the next seven years. That should allow us to find more money in the budget every year.
Comments: For those of you that are homeowners did you plan and follow thru with added payments to principle? Are unexpected expenses keeping you from paying down the mortgage early? As I begin the journey into home ownership by September 2015 what is the best advice for me? Thank you.
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