Budget, Budget, Budget

Tweet I'm going to go a little off track with my blog entry today. I was doing, like I always do, every morning...chatting on the D&R board on The Nest. A question came up about interest rates. This got me thinking. Are there other people that stick to a budget as much as we do? Do they update their spreadsheet twice a month? Do they know what a budget is?

Let me give a little history about my husband and I. Two years ago we were newlyweds with $26,000 credit card debt. Yes, CREDIT CARD DEBIT! This did not include student loans, cars, etc. We realized that if we were going to move on with life, we had to get rid of this pet we had been carrying around and making "fat" for three years. We did spend a little bit more money to make some realizations. We went and bought Quicken. This allowed us to pull in transactions from our bank statement and organize the tranactions into categories. Do you know that 53% of our income was going for entertainment? We were lucky that this was our only problem and not that we didn't make enough money. We just had to shape up our spending!

I put us on a strick monthly budget:

Gas - $100

Food (Grocery Only) - $300

Entertainment - $100

Rent - $750

Water - $20

Electric - $100

Gas - $100

Cable - $100

Cell Phones - $80

Car - $250

I had to keep the cable. We would have gone insane =) Everything we did was budgeted for. At the end of every paycheck we had about $400.00 left over for credit card payments. Both Christopher and I took second jobs, making $10 an hour. This provided us with an extra $200 every two weeks. So at the end of the month we were making $1200 credit card payments. Luckily with all the debt, our credit had not been damaged too bad. We were able to transfer a lot of debt to zero percent interest credit cards. With wedding money and the extra payments, we were able to pay off all $26,000 within 14 months. There were a couple things that helped us stay on track that I would like to share. Every two weeks, when we got paid, I would write out a new balance sheet for every credit card we had (which was a lot) and post it on the fridge. We started telling everyone we knew about what was going on. (You'd be surprised how many people will share their debt amount with you, when you share first). Then our friends and family understood, when we'd have to decline for a dinner invitation. The next thing we did was keep a spreadsheet of our monthly budget. Which I still do to this day. This spreadsheet helps you stay focused with your money. You know what is due, when its due and what your saving for. We try to keep $1000 in the savings for any emergencies. Credit Cards are something we use rarely but are still part of our life. I'd love to "Live like no one else, so later on I can Live like no one else".

There are many different support tools online to help anyone get up and get out of Debit. I love listening to Dave Ramsey. He is very matter of the fact and straight up about money. He also has many different books at the library that you can read. I would suggest them to anyone who is facing mounting debt.

So my question to my readers, is do you live on a budget?