At some point in each day, I find myself thinking about our budget. We've come to learn that budgeting can often times be extremely difficult. In our first year of marriage, I can assure you that we tried every budgeting trick in the book, but we couldn't find anything that worked for us.
We have very different spending habits. Michael is an impulse buyer and I need months to consider even the smallest of purchases. We had a really difficult time finding a budget that worked for both of us, until now.
After searching the internet for tips and ideas, I gathered a list of things I thought would work, tested them, and found what helped us budget, save money, and pay off debt. Here are a few of our ideas ...
BUDGET:
Our budget works a little like this, the last week of each month, we sit down together and write down all of our bills. This is money we know must be spent on things like car payments, insurance, groceries, gas, etc. We look at previous spending on these things and then together we come up with a number that we think is reasonable to budget for these expenses. It's easier to itemize each expense, so you know exactly where your money is going. This is the format we tend to use ...
Click here for a downloadable copy that you can fill out yourself!
We then look at the money we have left over from the months income, and place half of it in savings. With the remaining half of the left over money, together we decide what we would like to do with it. It may be as simple as put it back for a date night that month, or make an extra car payment. We have set up a rule that if we cannot agree collectively on what to do with the extra money, then we will divide it down the middle and I can do whatever I want with my half, and Michael can do the same.
The key here, is coming up with the budget together. This helps to get both people on the same page, and allows you to hold yourselves accountable.
Once we have created our budget, we check back weekly. In our house, Thursday's are the best days to sit down and look it all over, so every Thursday around 4:00pm, Michael and I sit down and look at that weeks spending. We are able to see if we are staying within budget, and shows us how much wiggle room we have for the rest of the month. For example: If we have allotted $300 on groceries for the month, but within our first trip to the commissary we spent $200 of our allotted money, we know that our second trip to the commissary only allows for $100 to be spent. It really helps to sit down WEEKLY!
TIP: During your weekly budget meeting, make sure that there are no interruptions. This helps you and your spouse focus 100% on your finances.
SPENDING:
Once our budget is set, Michael and I head off to the ATM and withdraw our money. You heard me, we withdraw it from the bank. The reason behind this ... you can see the cash leave your hand, making it hurt a little bit more. Swiping your card is easy, too easy. We have found that swiping our card for everything encourages overspending.
Once we withdraw the money, I look at my budget and place the allotted amount into the corresponding envelope. Like this:
Click here to download the template
I love these envelopes because it allows me to document my spending in each category, and I can print as many as I want from home! This is a really helpful tool for staying within your budget. Like before, if I have allotted $300 for grocery shopping, I take my envelope with me, and when the $300 runs out, that's it. A post coming soon about how I grocery shop!
SAVING:
Michael and I use coupons quite often. Why the heck not if it helps save money?? Aside from coupon cutting, we also go homemade on everything we possibly can. I make my own homemade cleaners and laundry detergents, as well as my own homemade mixes. Going homemade saves TONS of money!
We also budget in money for savings. We allot a specific amount each month for savings, almost like an expense. This ensures that the money actually makes it to the savings account! We also take any left over money at the end of our budget and deposit half of that into our savings account. Savings is important!!
Another NEW technique we have adopted is creating savings accounts for each member of the family. We have a family checking account as well as a family savings account that Michael and I both have access to. We then have savings accounts for myself, Michael and Mikey. We deposit a certain amount of money each month into Mikey's account, and plan to give that to him when he is older, maybe for the purchase of his first car, or as a graduation gift? We haven't decided yet. The savings accounts for Michael and myself and exactly that, for us as individuals. When we cannot agree on what to do with our leftover money, we can place it in our savings accounts and use it however we wish. Michael likes to buy parts for his car, so this money can go towards that hobby. I am a crafter, so my funds may go to buying a new crafting tool or supplies. It's completely up to us! The money can also sit in the savings account and we can use it for a large purchase, such as a really nice anniversary gift or a super cool birthday present for our baby boy. Having a savings account for each member of the family is something that we love, Love, LOVE! This gives us the freedom to spend money on ourselves without feeling guilty, but also gives us the opportunity to surprise each other without the other one finding out on a bank statement. LOL
These are all things that work for our family. What works for yours?
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