I’ve never really made a budget before. It’s always been willy nilly affair without a tonne of thought put into the long term. Don’t get me wrong. I’ve automated my savings. I have 200 bucks a month go into a retirement portfolio and 50 bucks a month (with $50 from my wife) goes into a joint account. It’s not much but it’s something. I want to up those amounts but not until I get out of the hole.
The steadfast rule of budgeting is 50/30/20. Steadfast in the sense that most things that I’ve read point to this allocation as the healthiest.
Fifty percent of your take home income goes towards your absolute needs. Fixed costs. Mortgage. Water. Gas. Hydro. Taxes.
Thirty percent goes towards your wants. Cable, Internet and Cell fall into this category as well as dinners, clothing, entertainment, toys for the girls. Wait. I may need to up this percentage. La La Loopsy ain’t cheap. Cable, Internet and Cell are hardly wants. I ain’t no pioneer. I need my Jersey Shore and Downton Abbey.
Lastly, twenty percent is supposed to go to debt reduction and savings. Paying off credit cards, student loans and of course lines of credit. Loan sharks. Bookies.
According to the breakdown, I should be contributing $920 a month to debt reduction and savings. With $250 going to savings, that leaves $670 to go onto the line of credit. Over the course of this current Operation 180, I would pay down $4020. Not too shabby. Not good enough.
I think the key is cutting down the “wants” percentage. I need a swapsy. For the next six months, I am moving to a 50/20/30 model. This will give me $1200 for savings and debt reduction. I could put $950 a month down on the line of credit. I would pay down $5700. Getting better.
I need $4300 extra. Damn. This is the crux of the challenge. I will find it. Where? Maybe I will call the local college and inquire about a modelling gig in a life drawing class. Hopefully, it’s not too cold in there.
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