My Top 3 Budgeting Tips

The word budget seems like such a simple term.  However, many of us struggle putting one together and even more sticking to the budget.

Here are some tips that Fabian and I use when doing our budget.

1. If you are married, you MUST do the budget together.

As a married couple, your finances must be together. No ifs, ands, or buts.  The two become one.  All paychecks go into one bank account.   It is impertinent that your finances reflect that you are one.

When Fabian and I don't do a budget together, it's like we're rowing a boat in circles. Sure, we're moving. Though sadly, as a couple, we're not moving forward to a common goal or destination. 

One of the biggest reasons for divorce is money problems. Again, you MUST do the budget together. I know too many women and a few men who have told me, "I don't do the budget. My spouse just tells me what I can and cannot spend." Please do the budget together. Even if you abhor numbers.  Be there with your spouse while they do the run down of the budget.  Put your own input in.  I guarantee that when you do the budget together, you will feel closer as a couple. You truly are becoming one when you work on a goal together.

Often when doing the budget one spouse is a "nerd" and the other spouse is often the "free-spirit".  I am definitely the "nerd". I like math and I embrace it. I do the rough draft of the budget and talk to Fabian about it.  He helps add items or take items away.  He will lessen amounts or enlarge amounts for different items.

For instance, I like to give the baby spending money in order to buy him toys and clothes.  Obviously our son doesn't need spending money.  I just like buying him stuff. Fabian helped me come down to earth and so I had to cut it extensively to $10-$20 a month. Also, my husband LOVES Starbucks. Before doing our budget together, he would almost spend $100 a month on coffee alone. We still give him a Starbucks budget, but it is now down to $20 a month. (I don't like coffee. I think spending money on coffee alone is cray cray, but I love him. Sometimes I like to be nice.)

2. Budget the necessities first

If all your credit card bills are paid, but you have no food, what good does that do you?  Take care of necessities first.  Dave Ramsey calls this The Four Walls, which are food, utilities, house, transportation, and clothes.

Get a sheet of paper or open an Excel spreadsheet on the computer. Write down all of your expenses in order of importance.  Pay all of the more important items first.

Here is an example of how Fabian and I do our list:
Tithe/Giving
Food
Utilities (Electric, Water, Trash,)
Rent or Mortgage
Gas
Car Payment
Clothes
Diapers/Wipes
Dog Food
Car Insurance
Phone
Internet
His Spending Money
Her Spending Money (We do $40-$50 a month)
Miscellaneous (Unexpected expenses. This doesn't include a cute shirt that you "need". #iamguiltyofthis)
Haircut
Car Maintenance
Doctor Appointments
Saving
Debt
Cable (If you are truly struggling financially, I would urge you to cut your cable bill. There are other avenues for entertainment, free entertainment nonetheless.)
Anniversary/Birthday Gifts

3.  Do a zero-based budget. 

Fabian and I have looked at our bank account and thought, "where did all the money go?" So often we let our money go wherever it wants instead of telling it where to go.  We needed to be in control of our money and not let our money control us.  We work too hard for it to disintegrate before our eyes. We must give every dollar a name.

What is a zero-based budget? 

The concept of a zero-based budget is simple: income minus outgo equals zero.If you earn $3,500 a month, you want every item that you spend/save/give/invest to all equal $3,500. That way, you know where every one of your dollars is going. Not knowing where the money’s going is what kills a lot of people’s money situations. They just look up one day, and they have no money—and no clue about where it went (Ramsey).

As an example, let's say Fabian and I make $3,500 a month. For now, we'll pretend like no doctor appointments are needed and no car maintenance is needed this month.  Right now we do not have an emergency fund in place yet. (We will continue to make the minimum payments on all bills including debt related bills.  However, Fabian and I need to put every extra dollar toward our savings fund.

*Don't forget. When payday comes, write all of your expenses in order of importance. 

Here is an example of our monthly budget:
 Note: Most of the following are numbers that my husband and I spend on each item per month. However, in "for real" life we do a bi-monthly budget because we get paid bi-monthly (twice a month).

Budget
Total Income/Paycheck/Side Jobs	$3,500
Tithe/Giving	350
Food	500
Utilities (Electric, Water, Etc)	150
Rent	900
Gas	300
Car Payment	350
Clothes	30
Diapers/Wipes	50
Dog food	40
Car Insurance	130
Phone	150
Internet	40
Miscellaneous	120
Her Spending Money	40
His Spending Money	40
Haircut	30
Credit Card Bill 1	25
Credit Card Bill 2	25
Student Loan	120
Added Total of Monthly Expenses:	3390
Emergency Fund (If 1k completed, put extra debt here.)	110
Added Total of Money Budgeted	3500
Remaining Balance (Should always be 0)	0

Now that all of our income of $3,500 has been given a name. By the end of the budget,  we should have $0.00 left. Always.

I hope this makes sense!

For more help, use Dave Ramsey's Budget Form. (It was a life saver for us.)
http://www.daveramsey.com/tools/budget-forms/

Hopefully, these tips encourage you and get you started budgeting with a plan or goal in mind.
Thanks for reading. It means a bunch to me.

All my love,
Leah

If you have any questions or need help with your budget, I'm just a message away. I'd love to help!


The above quotation is from: http://www.daveramsey.com/blog/how-to-make-a-zero-based-budget