Feb 06 2008

You Really DO Need A Budget!

Published by at 10:39 pm under amy's head,daily,goals,marriage

Now, I realize that money is one of those things that you are not supposed to talk about, along with religion and politics (and I’ve been pretty good on all those subjects on this here blog so far). I really debated about posting this, as it crosses a line about how much information I want about me and my family out there for all to see. But I feel like there are probably a lot of normal people out there plodding along like we have, who don’t like their situation and who might benefit from hearing some of this.

Without going into too much detail, I’ve been crushing on all the personal finance blogginess and podcasts out there in the inkernet. One of my new years resolutions was to get a better handle on our finances. More than just making sure the bills were paid on time and then spending on whatever until the rest was gone. Probably not a good plan, right? Right! We’ve let some debt accumulate and so it was time to pull my head out of the sand and get moving on it.

(I have even started a super secret money blog in order to keep me motivated. Hello, I am fickle. I need things to keep my attention from wandering when something shiny walks past. And no, I’m not telling you the url. Some dirty laundry should only be read by STRANGERS! See above re: how much information i want about me and my family out there.) (If you’re a stranger, maybe I’ll tell you.)

Obviously, the first order of business was to start spending less, which James is already good at, and me, not so good at. I stopped eating out at work (except for group lunches) and more importantly, on the WAY to work. While this is a good first step, I still needed to know where our money was going and get it to go where I wanted it to go.

Now, I handle the finances in our household, a role that James is fine with. Discussing money and budgeting in our household has not been without stress, conflict, and outright tension. OK, I admit it, when he sometimes (rightfully so) criticizes the state of our finances, I would usually throw up my hands and say, “Let’s see YOU pay all the bills then!” and it would stop about right there.

So the very big important second step was getting the budget in order. I know how to budget – a handy spreadsheet will suffice for most everything, really, but I ran across some budgeting software purely by chance (linked off of one of the personal finance blogs I’m crushing on). It’s called, “You Need A Budget.” Catchy, huh! I’m a quicken user, and I have tried using the budgeting part of quicken, but have found it lacking. Usually I just ignore it, and assign things to categories as the transactions occure. Which, yes, shows you WHERE the money went, after you spent it, but doesn’t not help you put it where you want it to go! And yes, assigning a $200 Target bill to just “household: groceries” is me lying to myself, don’t you think? :)

So enter You Need A Budget – this program is really cool. It’s not produced by a company, just a guy who decided to put his own budgeting system into software form (it was originally an excel spreadsheet, which you can also purchase) and there you go.

Now this is the part where I should just point you to the software and let you look further if you’re interested, but I can’t. I love it so much, I’m going to get into it right here. I don’t blame you if you skip the rest, but there’s some touchy feely crap at the bottom, if you want to just skip to there.

The software has 2 main screens – the register, and the budget. The budget screen has the month at the top, with a big number, which is your available money. Then there are all the categories. To start, you switch over to the register, make an income entry which is whatever your checking account balance is, and then when you go back to the budgeting side, voila, that number is there as “available” to budget with.

So then, you think about what you’ve got coming up, (the phone bill, the gas bill, the kids’ piano tuition, groceries, etc.) and in each category, you assign what you think you’ll spend. As you enter numbers for each category, the available amount decreases. You keep on doing this, until you get that available number to 0. Now all your money is ASSIGNED. It all has a JOB to do. You can make or change categories to fit your needs.

Now, as you go through the month, you enter your purchases in the register, and it will show up as “spent” in the budgeting screen. You can see with a quick glance that you’ve spent $79 of your $400 grocery budget, and it will even show you the available balance left.

It used to be that as the month went on and our checking account balance dwindled, I would grow worried & concerned $600 left in the checking account used to be, “what is going to happen? will that stretch far enough?” Now, in my budgeting screen, if I’ve assigned amounts to all the categories I can think of (including some categories for yearly expenses, like car tax and tuition) and see that I still have $600 “available” – it’s like I “found” money to put into savings or towards debt!

There’s a whole other side to the software too, which is the methodology, called the “Rules” which I also adore. I am not going to get into them much though – if you want to read more, it’s on the website.

I could go on, and I WILL go on, if you really want me to. But I won’t go on any more right here. If you’re looking to get your finances in order, this is a great piece of budgeting software.

TOUCHY FEELY CRAP

Let me just say this – the best part about this software? James and I are on the same page. He still doesn’t really look at the budget, I’m pretty much handling all the money… But no one feels like they’re being told what to do, we’re in this together and there are no more arguments, we both know where the money is going, and we are both on the same page. We have made some very specific goals and our budget reflects that. You HAVE heard that money is the #1 cause of divorce, right? (OK, I just made that up, but it MIGHT be true!) While we still have work to do in front of us, it is nice to have a plan, and nice to know we’re pointed in the right direction.

Also – It really makes me think twice about buying stuff. It’s very freeing. I don’t feel the need to buy useless crap anymore. Crap that only clutters my home and we don’t really need. I know this feeling won’t last, and there’ll be times when I just want the INSTANT GRATIFICATION of a new whateverwhatsits..

But you know what else? If I do? There’s money in the “Amy’s fun money” budget category for whatever the hell I want.

-amy

4 responses so far

4 Responses to “You Really DO Need A Budget!”

  1. Susan Kishneron 06 Feb 2008 at 10:58 pm

    I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.

    Susan Kishner

  2. Heatheron 06 Feb 2008 at 11:41 pm

    Have you read any of the books by David Bach? I read the Automatic Millionair a few years ago, and it was very helpful for everything beyond budgeting. The title sounds like a get rich quick scheme, but the idea is to accumulate around a million dollars for your retirement.

  3. […] * Crazy Mokes: You Really Do Need a Budget […]

  4. Tracy Don 13 Feb 2008 at 11:02 am

    I am impressed that you are getting right on this. I am in desperate need of guidance re: finances! Yuck. We are in a horrible spot. I NEED to budget but can’t seem to get it done! Good for you … any advice on good sites to check out for how to get strated?

    Tracy D’s last blog post..Giveaways (again)