How to Create a Frugal Budget
The older I get the more I realize that life experiences are more important than material things. In order for me to experience more out of life, I need to go on a financial diet. To begin with, I need to establish a frugal budget that works for me. Ready to work along with me?
First, gather a copy of all paper bills and the last couple bank statements to determine where the fat can be cut.
You can write it all down on paper or do a Google search for free budgeting worksheets. Even easier, head over to budgetworksheets.org for free online budgeting form.
Write down all your current expenses for the following:
1. Deductions for Savings, Child Support, Alimony, emergency fund and other recurring deductions
2. Housing (mortgage, rent)
3. Debt payments for credit cards, student loans, and other revolving debt
4. Transportation expenses (car payments and insurance, public transportation, parking, tolls)
5. Food expenses (groceries, eating out, coffee, alcohol, impulse snacking)
6. Family expenses (daycare/babysitting, lessons)
7. Personal and Health expenses (clothing, hair and personal care products, health insurance, gym payments, doctor co-payments, prescription payments)
8. Entertainment expenses (Internet, Theater, sports, DVD’s, books and magazine subscriptions)
9. Educational expenses (tuition and fees, books, continuing ed courses)
10. Misc. expenses (entertaining guests, charity, pet supplies, and any other recurring expense)
Now that you are armed with this information, place a star next to all of the essential expenses, such as food and shelter and anything you have a contractual obligation to meet.
Place a check next to all of the non-essential expenses, such as DVD rentals and other entertainment, designer clothing, and eating out.
Once you total all of your expenses, subtract all of the non-essential expenses to find out how much you could be saving each month. Be honest with yourself to find your most frugal budget.
Time to Fine-Tune the Frugal Budget
By taking a look at my nonessential expenses, I was able to eliminate several things that freed up approximately $240 per month.
Instead of renewing my cell phone contract with Verizon, I decided to go a ‘Pay as you Go’ plan which I found at my local Walmart. I made a one time fee of $100 to get a new Verizon phone and now my monthly payment is only $45 instead of the $89 I was paying.
Fortunately, the contract with my cable provider had ended as well. My plan was to go with a internet only plan and use a VOIP phone service like the Ooma Telo for my home phone service and Amazon Fire Stick for my television programming. However, I live in an area where I need the home phone line to get internet service. This reduced my monthly payment to just $74 instead of the $165 I was paying.
Lastly, I noticed from my bank statement that I was spending roughly $25 a week on impulse junk-foods such 20oz bottles of soda and other vending machine crap. Eliminating this unnecessary expense will free up another $100 per month.
How to use this frugal budget
The very first thing I did after completing my budget worksheet online was print up a couple copies. I posted one copy on the wall above my home workstation. The other copy is with my bills and bank statements so I can pull out from time to time and tweak it.
Pulling from my Law of Attraction lifestyle, I printed out a visual goal (like the one below) and posted it on the wall right next to my budget.
The visuals will help manifest my desires but actively working towards my goals keeps me focused on why I’m doing this in the first place.
In my next post, I will discuss how I tweaked my frugal budget to reduce my essential expenses and the steps I’m taking to increase my monthly income.