On Budgeting (An Ongoing Tale of Trial and Error)


Last week I posted about how I paid off my car. When I left the bank that day, I was like, "So...that's...it?" 

It felt a bit anticlimactic, which is why I jumped around afterward to make the whole thing a bit more exciting.

What has been neither exciting nor anticlimactic, however, has been budgeting. It sort of sucks a lot, actually. In our pre-marital counseling, Jordan and I read a Dave Ramsey book, which (if you ignore all the capital-letter yelling and annoying true-to-life stories from people who are much more ridiculous and reckless than I will ever be) was quite inspiring. It made me want to remove debt from my life, cut up my credit card, and become a millionaire! 

My aspirations of retiring early were soon snuffed out when I realized that in real-life time, saving money and paying off debt takes time. A lot of time. So I started stressing out, as I tend to do, and Jordan started getting stressed out because I was stressed out, and it was this whole big thing. 

And then, my Sunday school teacher chose finances as the next topic to study in class, and so for the last two months(ish) we've been going in depth into budgeting, saving, investing, insurance, and any other financial topic you can think of. It's all been extremely helpful and, unfortunately, extremely stressful. I left every Sunday feeling sad and depressed. This was completely my fault; I realize this. Admittedly, I let myself get too stressed about things that aren't that big of a deal. It's another one of my annoying character flaws. 

When Jordan and I got married, I decided that was the perfect time for a fresh start; I was ready to have a whole new outlook on money. So we created a budget, and June was our first month of officially trying it for real. (We threw out May because that was wedding month, and we knew there would be a lot of unusual expenses that would never be in a normal budget.)

Since then, it's been a battle. I hate being cliche, but finances really have been one of the main frustrations for us. We both have different ideas of how it should work, what's important to spend money on, and how we need to budget. Each month since--in June, July, and now August--we've tested out a different budgeting system. We keep making small tweaks here and there to try and get it right, and we're trying to find a system that works for both of us. 

I am not going to claim that what we're doing for August is going to be our final choice. There's still a lot to work on. But this has by far been the best month, and I feel much more hopeful for our future of saving, budgeting, and overall handling our money. 

First, here's what hasn't worked:

In June, we tried going straight-up cash only. We had different envelopes for categories like gifts, groceries, personal, medical, clothing, etc., and we were only allowed to use cash. When the cash ran out, that was it--no more spending from that category. This seems good in theory, but there were times when I would be out without cash, and I needed to buy something. I should have gone home, gotten cash, and gone back to the store; but when you're already out, who wants to do that? So I used my Visa card, and it threw the whole system off. Or say I bought something online? Then what? 

The other problem with this was that neither Jordan nor I really knew what the other was buying. We kept all our receipts and put them in the appropriate envelope, but it takes a while to look through all the receipts, and sometimes you forget to get one, and when you buy something online it's not like there's a receipt for that. 

Again, problem. 

In July, we made a slight adjustment and tried using cash only for a smaller number of categories, but again, it just ended up being a mess. We'd argue, and it wasn't good. I think Jordan felt like I was just spending money willy-nilly, which I wasn't, but I suppose I can see why he felt like that.

Enter, Excel spreadsheets. 
So here we are in August, and we finally have something that seems to be working.

We'd been using a spreadsheet to keep track of our income, but this time I thought maybe it might be helpful to make a spreadsheet with all the budgeted categories. 

(Note: We each get $50 a month of "blow $," which is essentially anything we want to spend money on. If we're saving up for something big, we can choose to save our blow $ each month until we've saved up for that big thing.)

When we buy something, we write down the date, amount, and what it is. We hung this on the fridge, and at any given time throughout the month we can take a look at what we've spent (or at what the other has spent).

I have a column to keep track of weekly totals as well as the running total for the month. I actually have a more updated spreadsheet since I've made some adjustments to this one, but I don't have a picture of it. (One addition was a row at the top to write down the budgeted amount for that category so we know how much we have to spend.)

Here's what ours looks like for this month:

(Note: this was the very first version I made, so it's way messier than what September is going to look like, but you get the idea.)

Again, I am not in any way claiming to know what I'm talking about, but this seems to be working for the time being. It's slightly tedious to write down everything, but for me it's easier than getting on my computer each time. And at the end of the month, all I need to do it input the grand total and voila! 

Keeping track of our outgoing money has allowed me to know exactly how much money I have leftover at the end of the month. Then, I immediately writing a check for the difference and put that extra money on my car, which is how I was able to pay it off early. 

Of course, this entirely depends on having a positive difference at the end of the month as opposed to a negative one, but when you're keeping track of your purchases this closely, it really makes you think about money in a different way. 

And now that we have a system that's working, I'm sort of excited to see what happens in September.
Anonymous said...

Way to go. I'm seriously impressed. And honestly, the reason I have never truly budgeted myself is that I don't want to deal with all the tedium. But I applaud you for doing it. And it's probably why your car's paid off and mine still has a year to go. Woot.

Also - please correct your spelling of "grocery." thankyouandgoodbye.


Amanda said...

Crap! I'll tell you what. That is one word I ALWAYS spell wrong. Seriously always. Corrected it shall be. (I can't decide if I like or hate that you know my secret about being a terrible speller. On one hand, it's nice because maybe you don't judge me as much...? But on the other, I mostly just feel really dumb.)

Amanda said...

@AudraAlso, you've (hopefully) noted that in my first draft, it was spelled correctly. And since I didn't change it myself for the second draft, apparently it decided to be wrong all on its own. Therefore, I take no responsibility for this.

Katie Dupre said...

This is a struggle for Norris and me too. It has been hard for me to adjust to having my financial decisions affect someone besides just me (you know, if I had to eat raman for a month because I went on a shopping spree, I was the only one suffering. But now I have to worry about what Norris is eating too). So Norris got us Quicken for the computer. It is a brilliant piece of software. It syncs up with your bank account and shows you graphs of your spending, how much you spend in each area, your income vs. spending, and your projected balance for the next six months. It also reminds you of bills that still need to be paid, and keeps track of your net worth. It has basically been a godsend. And it has let us see that if we stay on track we will have reached our savings goal in three short months! Which makes it way easier to stick to it.

Amanda said...

@Kathleen DupréThat's a good idea! I actually think Jordan used to have Quicken. I should look into it.