A budget is more than what you will spend. The first part of the budget should be to determine how much money will be coming in. The only way you can create a spending budget is to know the total amount of funds you have to work with.
In 2013 I could count on a pay cheque that averaged around $1,300 every 2 weeks. With 26 pay cheques in the year my net will finish out as $34,500 for the year. There were occasional little bits of overtime that bumped that up this year. I received a $400 tax return for 2012 in 2013 so that brought my net income (if you count the $50 I got for my birthday and the $50 I got for Christmas from my parents) to an even $35,000.
$35,000 is a darn lot of money and it is pretty obvious that I frittered quite a bit of it away during 2013 but I am only looking forward now and not wasting time and energy examining my mistakes.
I only plan around how much my take home pay is and not my gross. I can’t do too much about how much taxes I pay. I contribute to the max of my work pension plan match and that is taken from the gross.
In 2014 I think it is safe to assume an average biweekly take home pay of $1,350. I will be receiving a raise of 50 cents per hour in the spring and I have averaged that in to my average biweekly pay of $1,350. With 26 pay cheques and a ban on overtime that will mean that my net for 2014 should be $35,100.
I was able to contribute to my RRSP during 2013 so I have calculated that I should receive a tax return of $1,000. I may get a bit more if the accountant determines that my youngest son has extra tuition tax credits that he can’t use against his own income.
My older son owes me $1,900 plus interest from an emergency loan I gave him in the fall of 2013. I am not sure if I will be repaid the entire amount in 2014 but I am sure I can count on $1,000.
That would bring my total estimated funds available for debt repayment, investment, paying bills and wasting to $37,200. (I have included a $50 birthday gift and a $50 Christmas gift from my parents in that total).
The Canadian government allows us to make contributions that count as tax credits against our 2013 income until March of 2014. I have only ever used the RRSP deposits in the year I made them and I have never used January through March contributions against another year but I may this year. I have not contributed very much to my RRSPs this year and I could use the extra 3 months of donations to increase the size of my tax return as I plan to put the tax return directly towards my debt.
The first line in the budget is set. My 2014 income will be $37,200. This could increase slightly if more people get pregnant and I am able to get some overtime or decrease dramatically if cuts happen at work.
Adding up the money coming in is the easiest part of the budget. Balancing the bills with the debt while still saving and having some fun is the hard part.
Projected 2014 income $37,200.
Projected debt as of January 1 2014
Car loan $11,750.
Total Debt on January 1,2014 $23,200.
Tomorrow a list of bills and expenses and repairs and things I think will break and need to be replaced in 2014. It is a very long list.