This is the final post in my Free Budgeting Guide. To get caught up, click here.
You’ve put in the work to create your budget and adjust it to fit your goals. How does it feel?
Before we wrap up, we’ll review a sample budget and optimize it for three months. It’s important to take this step because it’ll help you see how you can use your budget to achieve your goals over time.
This budget is the same budget used in the previous steps of my Free Budgeting Guide, found below:
NOTE: This sample budget does not include interest, which will affect how quickly you pay off any outstanding debts.
This budget has $1,111.00 left to be allocated. $249.00 remains from the 1st paycheck, and $862.00 remains from the 15th paycheck.
You need to make sure this additional money is being used so you don’t accidentally spend it in the wrong places. You need to make a plan to spend this money.
The goal is to get the “Paycheck Remaining” lines down to $0 so that all of your money is being used intentionally. Here’s an example of how to do that:
1st Paycheck: Increase savings to $175.00. Pay an extra $149.00 on the Chase Credit Card.
15th Paycheck: Save $214.00. Pay off the Chase ($101.00) and Capital One ($600) credit cards.
Now that both credit cards have been paid off, you have an additional $53.00 in your budget. This leaves you with $1,164.00 remaining. You need to make a plan for this additional money. For example:
1st Paycheck: Continue saving $175.00. Increase Student Loan Payment 1 to $494.00.
15th Paycheck: Continue saving $214.00. Make an additional payment of $701.00 on Student Loan Payment 1.
In your third month, you have $1,249.00 remaining in our budget. Why? Because, you’ve paid down your debts and reduced your total expenses. And by paying extra on Student Loan Payment 1, the total amount is just $260.00. That can be paid off this month, and you can find ways to use the rest of the money in your budget. See below:
1st Paycheck: Pay off Student Loan Payment 1 ($260.00). Continue saving $175.00. Make an additional payment of $234.00 for Student Loan Payment 2.
15th Paycheck: Continue saving $214.00. Increase Student Loan Payment 2 to $981.00.
In just three months, you were able to do some impressive things with the money left in your budget:
- Pay off $850.00 worth of Credit Card Debt.
- Pay off $3,575.00 worth of Student Loan Debt.
- Save $1,167.00.
- (REMINDER: This sample budget does not include interest, which will affect how quickly you pay off your outstanding debts.)
None of this would have been possible without first making a budget. It’s the only surefire way to be clear about your finances and to make a plan for how to use them. This may be an example, but think about what budgeting and focus can really do for you.
Thank you for taking the time to read and use my Free Budgeting Guide. I want to see you succeed, and I hope you find it useful. If you have any feedback or suggestions, please let me know. Additionally, if you want more personalized support, consider one-on-one coaching with me. You can also find a ton of helpful information on my blog.
Until next time! Be well,