Budgeting · Debt · Finance · Money · Uncategorized

The Evolution of Our Budget

Stage 1 – Writing in a Notebook

This was the “pullout” method of budgeting. Better than nothing, but only slightly. This was a list of expenses and paydays I would write out, in a notebook, by date. We both get paid on the 3rd of the month, then rent is due on the 5th, we buy groceries on the 7th, then we get paid again on the 17th, etc. It was just an on-going “here’s the money we have in our account now, and the bills we have coming up”. Literally this “budget” spanned page after page of notebook paper. As if that wasn’t disorganized enough, I was very selective about what I put on the budget. It was strictly bills I knew were coming up, and estimates of most recurring expenses. I budgeted $50 every week for food. Do you want to take a guess, percentage-wise, how often we stuck to that $50 a week? I would venture a guess in the low teens. But did I ever edit the amount to accurately reflect how much we actually spent per week? Never. Gasoline wasn’t included in the budget at all, nor was any type of entertainment. Because I wanted to think we didn’t spend any money on stuff like Starbucks, date night, and clothing, and when we did, it wouldn’t adversely affect our budget. I know, wtf, right? Credit card payments were not included in the budget. I just made payments when I felt we had enough money in our bank account, which usually resulted in an overdraft because I had not properly budgeted for something else that week. We were a couple of hot messes.

Stage 2 – Screw This, No Budget

I am sure you are shocked to read that this was our next stage. After creating the above absolutely brilliant budgeting plan and realizing it was failing us, how could we not lose faith in all types of budgets?? I hope my sarcasm isn’t blinding you. This was a phase we went through after deciding that, despite budgeting being one of the top financial recommendations for everyone, budgeting was not going to help us achieve our financial goals. We thought we were better than the budget. The one described above didn’t help us at all, so why were we wasting our time? I just checked our accounts on a daily basis and made sure we had money in them. Did we always have money in them? Nope. This was right about the time that our slow progression of credit card debt hit its peak of 10k for the second time.

Stage 3 – The Calendar

After a few months of no budget, my husband came up with an idea that I can now only describe as ingenius. But don’t ever tell him I said that. He suggested we put all of our monthly expenses on a physical monthly calendar. I was against the idea at first. I had all the excuses in the world for why it wouldn’t work. My stubbornness that we didn’t need a budget and blind dislike for trying an idea that I myself did not come up with being the main ones.  But one month I tried it. I used Mint (which I will sing praises of later) to determine how much we were spending each month on what and when. I printed out a monthly calendar and wrote down each of our bills and the amount due on the day they are usually deducted from our checking account. I also included weekly expenses and the days we usually made them (i.e. grocery shopping on Sunday, getting gasoline on Thursday, etc). I took a hard look at the amount we actually spent on things such as food, entertainment, and miscellaneous expenses, which allowed me to more accurately budget for them. Did it hurt to look at our budget and see $125 a week going to food? Yes. But I had some peace of mind knowing it was budgeted for, and that we could still afford all of our other monthly expenses. It finally felt like we were on the right track, but we still had a ways to go.

Stage 4 – The Well-Oiled Machine

Our monthly budget now is one of my proudest accomplishments. Every time I look at our budget, I feel a sense of calm. My husband will tell you, probably a little exasperatedly, that I look over our budget and our accounts Every. Single. Day. Most everything is accounted for. No longer do I shy away from putting things on my budget that I don’t feel will affect our finances. Every expenditure affects our finances. Acknowledging that has changed the way I look at budgeting. It’s not meant to limit us. It’s meant to help us. It made it possible for us to go from about 30k in debt at the beginning of 2017 to 4k at the end. It has also helped us identify weak areas. Monthly bills that we could potentially be paying less for. We are now utilizing other accounts for variable expenses such as food and entertainment, and we have an account for bills only. It is (mostly) an organized and reliable system. Is it a perfect system? No. But with every passing month I am more and more confident that we are finally hitting our stride. And that there is hope that our ugly budget will lead to a beautiful life.

My next post will show our current budget and its breakdown.  In the meantime, I would love to hear about your budgets! What has worked for you and what hasn’t?

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