I'm still hoping some of the other ladies will chime in this week. I feel like I have almost nothing to offer! We've struggled with this and tried several ways of keeping a monthly budget. Most have failed simply due to lack of follow-through!
My husband does the majority of managing finances in our house - mainly because when we got married, I was seriously vocal about not ever wanting to balance my checkbook again! :) We still have to communicate often and re-evaluate where we stand and what our goals are.
Here is my somewhat unorganized list of ideas or suggestions that we've learned over the past five years:
1. Sit down with a financial planner of some kind. For us, it was a close family friend that happens to be a certified financial planner. We sat down with him before we got married and he basically "taught" us (on paper) how to write a budget and things to consider when doing so. A lot of the ideas I'm sharing today came from his wisdom. Even if you don't have a CFP in the family, seeking advice from a financially (and biblically!) minded person that you trust is really a great idea. Especially for those of us who are not financially minded. (Me!)
2. Common budget categories that are forgotten include gifts, children, veterinary care and vacations. Now, these categories don't apply to everyone but if they do - consider them when making your monthly budget. Gifts is helpful for young married couples attending 200 weddings and baby showers each month. Children is helpful to set limits on spending when it comes to needed items. When Will was a baby we had a "Will" category that was used to purchase items that came with each new stage. For example, baby proofing items, new sippy cups, clothes, etc. Honestly, this category doesn't exist for us at the moment but it could re-appear if needed.
3. Reevaluate your budget MONTHLY if needed! This one was really freeing for me. I think my expectations concerning monthly budgets were unrealistic in the beginning. I thought we'd set a budget once and it would be that way FOREVER. Umm, not so much! Circumstances change and we often find ourselves reevaluating.
4. Before establishing specific amounts and categories, track your spending for a month or two. Programs like Quicken, MS Money....will help you do this. Or you can simply do it yourself. The first time we did this - I was shocked at the number of trips we made to Target in a month. (Let alone the amount of money spent!)
5. Budgeting monthly for non-monthly expenses is our biggest struggle. Expenses like car repairs, medical, etc. may or may not occur each month. Currently ALL of our "extra" money goes into the same savings account. ("Extra" meaning anything not used in a regularly occurring monthly budget category - groceries, fixed bills, etc.) I would love to find a system to better "organize" our saved funds. Currently, we have a checking account and two savings accounts. We have an additional high yield savings account with ING as well.
And in case you are wondering - we do not use a cash or envelope system. I cannot get my mind around managing that much cash. I have tried and we've set several dates to take the plunge and start using cash, but I've chickened out.
And my best piece of advice....
If you are like us and still struggling after years of trying to maintain a monthly budget - you MUST read DAVE RAMSEY. I read Total Money Makeover in summer 2008. It really changed the way we view money and finances. (I'm pretty sure I almost read the entire book out loud to Jacob! I was that excited about it.) While we may not have adopted every single idea of Dave's - we have changed a lot! (For example...cash only.)
And there it is - the most unhelpful budgeting post ever! Anyone else have any insight to share?
1 comment:
The thing that helped us to finally stick with a budget was actually going to a small group Bible study. Our church utilizes the Crown Financial Ministries study, and we went through the study with a small group of our close friends; all were also Hubby's colleagues/classmates from med school.
For us, we had read several Biblical finance books, but actually doing a study - with homework, memory verses, and the accountability of our friends - really hammered home the truth of God's Word about money. The Bible talks more about money than almost any other single subject!!! So it was an encouraging kind of "ouch" for us.
Then, I sat down and used Crown's basic guidelines and a 6-month history of our spending to draw up my own monthly budget worksheet that makes sense to me, since I'm the book-keeper for our home. :) I sometimes get behind on actually filling the monthly worksheets out, but I always already know about how much money we can spend a month on any given area (groceries, clothing, etc).
One really nice thing about our budget is that is has allowed us to actually pay for all of our regular expenses WITH our credit card (I know, so anti-Ramsey, haha). But when we know how much we can spend on things and stay within budget, and we pay the bill off in full every month, it's an excellent way to accumulate Reward Points (or cash back, or travel incentives, or however your card may be set up). We've used Reward Points to pay for all - yes, ALL - Christmas gifts for the past 3 years! :)
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