How to Create a Do-able Budget

The Dolans discuss your most important financial tool : how to create a do-able budget

Ken: Daria I don’t want to talk about cheating. Daria: Don’t use the B word they're going to throw things. Ken: Is there something on the floor? Daria: No they're going to throw things at us but we have too because if so many of you had used that be word in the past five years you wouldn’t be in a panic situation right now. Ken: All right let’s keep it simple as possible and it’s palatable as it is. Let’s do a simple formula. If you're really serious about getting your budget act together and— Daria: Even you can't say it. Ken: Budgeting together so that if actually have some money left at the end of the month—some quick stuff, number one, how money of your paycheck do you take home. What do you make what do you take home, step number one. And then after that list of fix expenses, things that aren’t going to change. Daria: Mortgage or rents if you don’t own your home. Ken: If ask all your property taxes. So take home pay minus fix expenses. Let’s start there. Daria: And then include your electricity, things of that nature. Once you’ve done that take the amount you brought at home and subtract that amount of money right away from it and that’s going to tell you how much money you have for other things. Ken: All right let’s watch that other things. How many people, number one, know how much they have left after fix expenses and then track it. It’s called non-fix expenses. How much money do you spend at the movies, restaurant, clothing, groceries, newspapers, magazines you’ve got to keep track of that because you'll be surprise how much you have just filters away. Daria: There's a little fun things that are in your budget on a monthly basis that you don’t budget for but rather just do because you like them that you could get rid of them. For example… Ken: Give me one. Daria: And I don’t want them get mad at us but we do subscribe but if you have a Net Flakes. And you're getting three movies and you're finding that you're not even watching two of three in the course of a month at least look at the opportunity downgrade the one movie so that your charge will go down month way. And if you're not looking at them all get rid of them all. Ken: Interesting. Is it less per month that you get less movies? Daria: As I understand it. Ken: So what you're saying is how much do we take home, how much do we know we have to spend because that’s fix. We take a look at all non fix expenses and see what we can cut back to have some money left at the end of the month. That’s pretty simple, it’s not easy to do Daria, nobody wants to know where all that money goes all the time but then you can't be surprise when there's none left or you have too much month left at the end of your paycheck. Daria: And if you have some left over, put a little in savings and put a little towards that crack or balance, before you know it you get free. Ken: And start saving. That’s the B word from the D’s