Take Back Your Finances #35: The Monthly Budget Review and What We Have Done This Month

We know you are probably really catching on to the idea here – yep, it’s that time of the month again…you know that time when you do your monthly budget review and implement the 2×2 plan.  It is actually our favorite time each month because it is making life-changing gradual steps for helping to secure a better financial future.  You may have seen it before because, yes, it is THE ongoing monthly challenge. But just because it is not new, we encourage you to try to have a different attitude or perspective towards it this month as you attempt your 2% budget decrease and your 2% income increase.  Plus don’t miss below what we’ve done just this month to increase our income just a little more – yes, it can be done!

We seriously love this plan and seriously love to implement this plan.  Again, it’s just like the difference between yo-yo or crash dieting vs. the overall gradual lifestyle change and the gradual health and weight loss.  Yes, we’d all love to “get rich quick” or “change our finances yesterday,” but that’s not reality just like crash dieting isn’t either. The intent behind a crash diet is super quick change, but one that is pretty much temporary without actually changing your lifestyle.

Remember, we are not in the game of quick fixes for finances (remember how we shared our crash-diet mentality crashed our budget or the financial controversy over a crash-diet approach vs a healthy diet for long-lasting change) but instead, we work towards lifelong changes and create new lifestyles step-by-step.  Making changes for life and making changes slowly helps to ensure that you will stick with it!

So now it’s time to talk about this week’s challenge.

This Week’s Challenge – Implement This Month’s 2% Spending Cut and 2% Income Increase

As a reminder about the 2×2 plan…you will want to read this article:

• It’s Here! Our Secret 2×2 Formula We Used To Pay Off $1ooK of Consumer Debt (there are additional links within the article about why other approaches did not work for us for those lifelong financial changes)

For us, we like the challenge of finding new and creative ways to both spend less, but bring in more! It’s a fun little game and a fun way to really get the creative juices flowing. When you are determined enough, you will make it happen.

In the area of dropping our budget by 2% each month, well, we’ve been at our rock bottom budget for a few years. But like we ALWAYS remind, once you get to your rock bottom budget, you still want to evaluate it and just see if you can find new ways to save. This month wasn’t as successful as last month, but that’s a good thing! In fact, we dropped our budget by just a few dollars literally. We were able to select some different options on our city utilities that just became available and it did drop our utilities by about $4 a month. However, we consider this a HUGE success considering that we always think we can’t squeeze any more savings out of our budget…and yet we eeked a little more out.

As far as increasing income, last month, I took on an extra writing job to bring in an extra $100 each month (that I had told you about then) and this month, myself and some crafty family members have designed and created some new handcrafted jewelry and apparel that we will start selling at a local Farmer’s Market tomorrow. We plan to sell these all month at the community farmer’s market while we set-up and make plans for an online selling store (like Etsy) to continue to earn even when the weather and festivals disappear for the year.  It is a fun venture and a fun feat to conquer each and every month.

So, now it’s your turn to find some new creative ways to save and bring in more income.

As a tip: We do keep mentioning this because it is a BIG category: continue to work through the long list of ways to save on the grocery and eating out budget. There are several items on a list that you can utilize to drop each month for many months.  That list is found HERE.

And remember, once you feel like you have exhausted your grocery budget and eating out budget, it’s time to move to other areas! Services, fees, other payments on things you are not using, etc. Are there areas in which you could cut back and make a sacrifice?  Other things you are spending money on. Conveniences, clubs, groups memberships, etc. Have you looked through all of your expenses and bills to see if there is any part of these that can be cut out or cut back? Perhaps switching cell phones to a no-contract version. We did this in one of the earlier 2×2 monthly challenges and have saved a huge amount. Be sure to visit the categories at the top and the left side of our site for ideas on saving and earning everyday.

Step #2 this week is to also find ways to bring in extra income.  These are generally in the form of extra jobs, side jobs, etc. Again, we have shared the articles on this and instead of restating the steps and ideas here, just see the previous articles as well as the Money Making Ideas section of our site and the Over 130 Ways To Earn Extra Income Ideas list.

Here’s the previous articles on the 2% increase:

• Brainstorming extra income ideas
• Turn your ideas into real money
• How to increase income by 2% each month

For those that are just now reading this and don’t know what we are talking about…

We recommend that you read up on a few articles regarding the 2×2 plan. This is a life-changing, incremental financial plan and one that helped us get out of $100k of consumer debt and one that has helped countless others to get to a better financial place. Start with this article talking about the 2% decrease that also contains additional links for even more details on the plan.

We also recommend that you start our financial challenge from the beginning if you want to really see some big changes with small weekly steps for the next 52-weeks! You can read about how to join us in the 52-Week Take Back Your Finances Challenge from the beginning.

Resources Needed for This Week’s Challenge (Reviewed from Previously)

You will need to find and gather the following resources to help you complete part of the challenge this week:

• Budget Sheets from Week #3
• 12-Month Monthly Summary Budget Planner from Week #7
• Calculator
• Pen
• Thinking Cap

How to Figure 2% Decrease and 2% Increase

Just revisit and recalculate for this month, just like previous months.

As review, we are going to use our sample calculations based on the sample budget sheets from Week #3. Referring back to these sheets – there were 3 kinds: Bills, living expenses and debts. Exclude the debts form at this point. Add up your Bills and Living Expenses Monthly total. 

In our samples, we have $1265 in living expenses and $1825 in bills. This is a total of $3,090. Then you will calculate what 2% of this is by taking 3,090 x .02 = $61.80. This is showing the same example as last month, but theoretically, there may be less living expenses or bills this month after last month’s 2% cut.

But in any regard, $61.80 is our target spending decrease goal for this month using these examples! Write this on this month’s Budget Summary Printables from week #7 (again only on the current month as you are going to recalculate this goal number each month).

Then follow the same steps by evaluating your income by referring to page #1 of the 12-Month Monthly Summary Budget Planner from Week #7. Then fill-in your 2% increase.

So now that you know your target goal, evaluate where you can make these changes this month.

BTW – we haven’t made it a continual challenge, but be sure that you are filling-out your 12-Month Monthly Summary Budget Planner from Week #7 each month. Just coordinate with the week you prepare to make your 2% decrease and 2% increase. Just start the habit. 🙂

Stay motivated, stay focused and stay encouraged! Big things are happening! You will be so thankful for these small steps that you are taking!

Have fun this week! 

Need to catch up?  Come join us on this challenge from the very beginning by clicking on the 52-Week Take Back Your Finances Challenge and sign up to start receiving your automated challenge from the very beginning!

One final thing…we also have a Facebook Group where you can engage in discussions, receive encouragement and talk to others that are participating in the challenges too for more ideas! Head to the Be Intentional with The Thrifty Couple Facebook Page HERE and ask to join us there! You can also invite friends and spouses too!

Disclaimer: We are not licensed financial planners. We are only a couple that have been just a hair-breadth away from bankruptcy and found our way out of debt with a goal to now help others. Please make sure to consider any advice given on our site and in this challenge as tips we have used ourselves; they may not work for everyone. If you have questions please make sure to contact a licensed professional.