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Friday, May 2, 2008

Zero based budget: May 2008 . . .

Voilà! Here is my zero based budget for the month of May! Before you scroll down, let me tell you how wonderful this budgeting system has been for me. I learned about it from Dave Ramsey's The Total Money Makeover book, and it has changed my life.

Before I started creating a zero-based budget, I saved exactly ZERO dollars each month. Although I religiously kept track of my expenditures, I wasn't 'telling' my money where to go---and accordingly, it just went! Here's the difference in savings between January (no budget) and May (projected) as far as the amount of money being diverted into savings:

January: $0 to savings
February: $181 to savings
March: $213 to savings
April: $263 to savings
May (projected): $901 to savings

Now, keep in mind that in May I'm receiving my tax rebate, 100% of which is going into my emergency fund---that's why my savings rate will (hopefully) be so high this month. But to go from $0 saved in January to $263 for April is phenomenal, and I couldn't have done it without the zero-based budget system (this is a system where you give each dollar a 'home' before payday, resulting with a remainder of $0---every dollar is told where to go before you have a chance to fritter it away).

Also, keep in mind that my income didn't increase substantially in February, March or April. In fact, in March, it was lower than usual, because I went on vacation and didn't work my second job for a whole week.





Another thing that's unusual about this particular budget is that I'm receiving three checks in the month of May, from my second job---that's just the way the calendar worked out, and I'm ecstatic about it! With an extra check from the night job and the tax rebate check, I am able to both pay down my credit card, AND pad my emergency fund, instead of choosing one or the other. June won't be quite as terrific in terms of income, so I'm just going to enjoy it for now!

3 comments:

Liz said...

Hi- could you explain a bit more about how to develop/follow a zero based budget? I don't quite understand! Thanks and I enjoy your blog!

Finally Frugal said...

Hi Liz! Yes, in fact I'll write a post about this for Monday, so come back and check out the blog then. It's hard to believe that such an easy budget could make such a difference in my finances.

Have a great weekend!

LIZ said...

Thanks! I look forward to reading that post about the zero based budget. I would also really like you to post about how you get away with spending just $75.00 per month on groceries (amazing). I just don't get that, even for a single person with no kids. I just went to the store today, and even though I did not need stuff for actual meals (just "fill in stuff") and spent almost $60.00. What about toiletries- hair stuff, face stuff, makeup, etc.? I am not a terribly "high maintenance" type of gal (I use suave hair products, get it cut at Supercuts for 1$15.00, use Maybelline or Cover girl makeup- I NEVER have bought expensive makeup or hair products)....but still, where do you buy that stuff? How about cleaning products and paper products? I am just trying so hard to be frugal, but I still find that I have to buy those things....and how about fresh fruits and veggies? Those items are sooooooo expensive, but it is important to eat them. Oh, and what about lunches? I am also in the education field (teacher). I never ever buy the cafeteria lunch (yuck!) and take leftovers, but still need to allow for lunches and breakfasts and snacks.....
Please post not only about the zero based budet, but I am sure lots of your readers are wondering about the grocery store thing. You spend per month less than I spend per week!!! How do you do that? Thanks so much :) LIZ

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