Do you know where your money goes every month? Are you on a budget? Does that budget work? I know many people cringe when they hear the word budget because it is seen as something that limits you from things you want. I don’t see that at all.
After having been on a budget for three years now, the first word that pops into my head is “freedom.” Unexpected I know, but I (we) are actually getting to do what we want with our money now that we’re on a budget. Sure, a budget limits us in certain areas but we choose those areas and limits. Plus, by limiting some areas of spending, we free up money that we can spend on other things we would like.
I want to interrupt my budget soap box speech to inform you I am not a financial advisor and have no professional training in this area. With the economy still down and money tight in most people’s homes, I simply want to share what works for our family in the hope that you might find something useful for your family to adopt.
I am such a HUGE proponent of having a budget. It has been so life changing for our marriage. Before we had a budget, the number one thing we argued about was money. Awful I know. As much as we didn’t want to argue about money (because we both knew it’s not even close to the most important thing in life) we would find ourselves being stressed and upset over financial issues time and time again. Very annoying.
We listened to some Dave Ramsey CDs and then got started on creating a budget and getting on track with our money. Most of the stuff we use as a family for budgeting stems from Dave Ramsey so if you’re looking for more resources and information, I highly recommend going to Dave Ramsey’s website. We no longer argue about money, but rather discuss financial issues. Believe me, sticky financial situations still come up, but with having a solid financial foundation in place, it’s not as much of an unexpected burden as it once was. Freedom!
Something that was revolutionary for us was understanding that a budget is simply telling your money where to go. You should spend every cent on paper before you ever get a check in the mail. It was life changing for us to see how much we were actually spending on groceries and eating out a month. It has also been very rewarding to see us save up 3 months expenses for an emergency fund and work towards buying a car with cash only. A budget helped us see how much money we actually had to play around with and we were surprised to see how much we were able to save even with me staying at home.
Before we get started in the actual budget makeover series tomorrow, I wanted to share something we learned from Dave Ramsey that really got us laughing and helped us put realistic expectations on each other for budgeting. First off, you need to figure out whether you’re a spender or a saver. I’m a saver and Jeff is a spender so it was no surprise we argued over money a lot. I find joy in watching the numbers go up in our savings account and fall apart at unexpected expenses because I know it will have to come out of our savings that I’ve worked so hard at building up. Jeff always has something on his “to purchase” list. Once he gets a new toy, it is on to the next.
You don’t have to be opposite of each other. You both can be spenders or you both can be savers. Sit down and talk about how each of you relates to money because it will help you better relate to each other when I financial emergency or upset occurs. Realize that you don’t want to change each other, but learn from each other and work together to meet your financial goals.
Budget Makeover Steps:
- Tuesday- Manage Your Bills
- Wednesday- Monthly Expenses
- Thursday-Emergency Fund
- Friday- Save for Big Ticket Items Year Round
- Saturday- Keep Track of Budget using an Excel Spreadsheet
- Sunday- Savings