Budget=Freedom

(If you don't want to read it all, skip to the last six paragraphs, if you REALLY don't want to read, the last paragraph will do)


I know it's not Sunday, so you probably aren't expecting a new post, but I just read a friend's blog where she answered the question "How do we do it" and it got me thinking about how I manage our budget, and how so many Americans don't budget, or don't stick to their budget if they do (thus the HUGE debt problem in America). My friend asked for other tips on how we stick to our budgets, and because I don't have an account with her blog source, I decided to dedicate an entire post to my comment that would have gone on her blog.--OK, so my comment wouldn't have been this long ;).

My reason for doing this is truly self-less if there is something I do/know that can help you, than I want to share, I don't want this to be taken as a bragging post, because, as I mention later, my budget and spending tips/tactics are not perfect, What I have described here is how our budget is SUPPOSED to work, not how it always works, But something I can say is that over the years, because of our budget, I have come to know my spending habits, and I can now distribute funding honestly and still make the number add up.

Here goes.

To begin with--some inspirational quotes that I have at the top of everything related to my budget:

"Happiness is a decision, not a result, We will be happy and satisfied if we choose to be." (found at the top of my budget sheet)

" The greater part of our happiness or misery depends on our dispositions and not our circumstances"--Martha Washington (found at the top of my check register, reminding me that financial circumstances are not the deciding factor on happiness)

Only truth provides peace and only peace brings true happiness (found at the top of my Credit Card register, reminding me that I must be truthful in all of my spending, even when putting it on the card and paying later seems so easy--carrying a balance on my credit card never brings happiness)

Nothing worth having ever comes easy--this includes happiness (found at the top of my 'savings' register, reminding me that it is NOT easy to save, but it is worth it, and feeling financially secure and prepared adds to our happiness.)

I am a micro organizer. I can track EVERY penny from the last four years of marriage. I don't believe in cash--mostly because it is too easy to spend and lose track of what was bought. Some may find the 'envelope' option of budgeting (you divide your budget (cash) into envelopes, and when its gone it's gone) works well for them, but I can't do it, mostly because I'm not disciplined with cash--my envelopes instead are digital.

My budget consists of four excel sheets--my budget, checking, savings, and credit. Everything that happens in the month gets recorded in these sheets, even if it is repetitive. My credit card has cash back for purchases, so I use it a lot, but I don't let that distract from my budget. For example: I just went to walmart and used my credit card. This transaction get recorded in credit and checking (in checking it is highlighted purple to let me know it was a CC transaction). it also get recorded under budget where I have my "envelopes" (categories) with multiple lines like a bank register, so I know where the money came from and how much I have left in that envelope. (Walmart is usually miscellaneous because we are lucky enough to live in a town with WinCo food). The Sheet for my budget is a year-in-review, month-by-month. I know what to expect every month, I know what amounts never change, and I have the entire year set up to look at. I am always looking ahead to make sure that everything will also balance in the future. (Is there a group for plan-a-holics?)

My categories are divided into absolutes and additional, the absolutes are also divided into sub-categories, and are listed (for the most part) in order of importance (what gets paid first).

When "filling your envelopes" be honest, realistic, and don't set yourself up for failure.

At the top of my budget sheet is this quote (sorry, I don't know who said it)
Happiness is a decision, not a result, We will be happy and satisfied if we choose to be.

Monthly Budget:

Absolutes:

First things first--Tithing,Fast Offerings,Savings

Storage, Food etc.--for food storage, misc. storage, emergency preparedness--more info below.

Personal: Aaron, Monique (not much, but something doesn't get kept track of, and you won't feel guilty spending, because it is yours and not 'family') --usually in our budget, it is there, but we don't actually go to an ATM and give each other cash--more often than not, it gets used elsewhere, and Aaron and I are OK with that--to each there own, it is more important that it is there for when we do feel like we need it.

Be honest! If you know that you need more cash in your pocket to feel like this isn't a lock down, allow it (keep in mind that you still have to make all the numbers add up). THE most important category in a budget is to pay yourself first.

Unplanned bills: Medical bills--when I was pregnant, there was a certain amount that went here--this then became a sub-category in savings so the money was there when we needed it at the end, I also allow for well-child check-ups now, it decreased the amount available in miscellaneous and lets me know where we stand for the month. --This envelope doesn't always have 'money' in it--

House bills: Rent/Mortgage, Water/Garbage (city of Arimo), Electric--in my budget, there is a set amount for rent/mortgage, but city an electric vary, so I over estimate in my planning, and the 'left over' goes into savings in another sub category to be there for the winter months when electric bills are more, and the summer months, when city bills are more.

Other Bills(usually set amounts that can be planned on): Auto Insurance, Cell Phones, Internet, Net Flix, Living Scriptures

Student loans: each loan get their own block, then if I can pay more on one it can be accounted for and I know exactly where it went.

Diapers/Wipes: yes their own category, that way I can plan more, and my miscellaneous category is just that more miscellaneous.

Food: This is not a strong point, I can't honestly say that we eat as healthy as we should. Honestly, we make the choice to make other categories more important than this one. We live by a menu. Not so much assigned days, but planned meals. My closest store is 30 min. away, so we have monthly menus, and I plan shopping trips around other appointments to save gas. Because we live in 'the country' our menu lacks fresh food most of the time. I plan meals around my shopping trip to include salads, fruits, fresh veggies, because I can use them before they go bad. We eat a lot of frozen veggies. Our favorite is California blend. Our fruit comes from cans (either home or store bought depending on what we have). We use a lot of dried beans because they are cheaper, meat is bought when on sale (an example of this--hamburger came on sale at smiths for 1.79 lb. for 85/15 blend. We bought almost 30 lbs, it was then browned, and stored in meal size (1/2-1 lb.)servings. When this happens, some money comes from our food section, most comes from 'storage')

This brings me to another topic. I am a 'stocker' When things come on sale I buy a lot. (this is why I have a separate category for storage). This way I don't have to buy the necessities at the current listed price, I can plan ahead and get the deal. If you want to stick to a tight budget, you have to be willing to shop the sales, and not just settle for what is easily available.--you also have to plan on this. You can't buy a lot if you don't have the money (credit is not an option!)

We also buy bulk whenever we can. As I mentioned before, we have WinCo, which specializes in bulk foods, and I also know that WinCo has the cheapest prices on everything unless other stores have sales (another reason to shop ads--I can go to WinCo first and know the prices of everything else on my list in other store's ads, and then shop accordingly.)

Another topic---stores usually have the same type of sales every year. For example, I know that every year around September 1, Albertson's will have all of their Campbell soups on sale, I plan accordingly to be able to buy what I need for the entire next year -September to September-. (Albertson's also used to have yearly $1 cereal sales, but that has since been replaced by multiple cereal sales throughout the year usually about 1.50-1.80 a box--this is the only time I buy cereal)

Gas--Auto: this amount is over estimated, covers gas, and any 'extra' money goes into a sub category in savings to be available for maintenance.

Additional:
Date Night/eating out: to us, they are not separate, because eating out is such a treat, and there is only so much money to go around. If we want to eat out more (and sometimes it just happens), than date night gets shafted (or we just get creative--which is more fun anyway), and it's still budgeted.

Temple: this category covers going to the temple (gas) and lunch. Going to the temple is not optional, but sometimes, going to lunch is. --maybe this should be higher up somewhere? Do whatever works for you.

Miscellaneous/Other: This amount is whatever is left over after all the other categories have been filled. It usually isn't that much, $50-100, and is used for splurges (usually if Disney is releasing a film that month, although this month I decided to start a cookie cutter collection so I can make sugar cookies with Alexis), cleaning supplies, vitamins, etc. Things that aren't a monthly purchase, and aren't necessities.

Remember to Budget!: This is found at the bottom of each month. It allows me to account for things that may happen like auto registration, or our tax return, trick-or-treat candy, back-to-school stuff (My husband is a teacher, so maybe work wardrobe would describe you better) or other special holidays/birthdays that will "require" additional funding.

Christmas usually requires more than what the month of December will allow, because I know this (and so do you) you need to plan accordingly. What Aaron and I do is save up our Credit Card rewards AND we look at our savings account the beginning of December, and decide how much can be used for the holidays. Christmas than gets a budget that is NOT Negotiable. Other ways to plan for this is a Savings subcategory where a little bit is set aside each month. In order for this to work, you have to be realistic about your holiday spending habits, and you can't use it for something else--set your Christmas budget in January...don't only set $10 aside a month if you know that you can't stick to $120 for Christmas at the end of the year. This is by far the hardest holiday to stick to your budget on, more often than not you want to spend more than you have to spend. With us, what usually happens is that we don't get presents for everyone that society tells us we should-we care more about our budget than impressing people with gifts. For me, Christmas should be more about time spent, love shared, and family, not the material stuff. I know this is easier said than done, in order to make Christmas work, you really do have to plan all year long, if your families draw names, draw in January so you know who you have and can shop the sales throughout the year, or you have time to make a more personal gift. (this also makes the Holiday more personal when you aren't worried about not having everything done.)

I am a big believer in savings. If you have it in your savings account, you are less likely to take the effort to transfer funds. As you can see, I also sub-categorize my savings account. I have my rainy-day fund, home repairs, medical, auto, etc. EVERYTHING you can think of at the beginning of the year that will happen (car maintenance, dental cleaning, back-to-school gear, birthdays) or might happen (medical bills, having more people to feed, etc). The amount we put into savings fluctuates depending on what else is happening that month (for example, birthdays reduce our savings category, February is District Basketball month, and Aaron will be traveling and needing to get dinner-this needs planned for in advance). Savings should be just as important as anything else, if not more important, but you have to be realistic on the amount. We would all love to save $1,000 a month, for some maybe this is realistic, but for most, it is not realistic, and should not be the goal. Our goal that we are working towards is to save 10% every month, but to make this realistic there are other things that need to happen first (student loans need paid off)...BE REALISTIC!

Please also know that I didn't put this all together on day one and have it perfect. My budget has been 4+ years in the making, and still gets alteration(sometimes monthly). One of my new years goals is to NEVER go into the red--this includes keeping money where it should be, and not relying on our savings account to get us through. This year I have also tried to be more honest about our miscellaneous spending, putting just $25 less into savings in an attempt to NOT transfer funds at the end of the month from savings to checking to make all the numbers balance. I realize that when we do this, we are only shorting ourselves, so this year I have made it a priority to NOT let it happen.

Something else that we have done: At the beginning of the year, we assess our financial goals, and adjust our budget for success. (This year we have a goal of paying off my student loans) I also TRY to have a financial review with Aaron twice a month-once halfway through so we both know how things are going, and once at the end, so we know where we could use improvement.

Finances is the number one reason for divorce in the US, I believe that communication is central to this epidemic. Make the time to communicate about your finances as well as everything else you are trying to communicate about. :). You will more often than not find that when as a couple you both understand and are at peace with your finances--both decisions and balances--than you are happier.

I also like to use Aaron as my checks and balances. If I know that I have to 'report' spending to someone, I am less likely to splurge. Over time, (about 4+ years) he has developed the same habit, asking himself when he's at McDonalds with the pep-band, "What would Monique order?". (sometimes he listens, sometimes he doesn't, but the fact that he is more aware of his spending habits makes me smile and reminds me that we are both in this together, every decision we make has consequences, even at McDonalds).

As I mentioned in a quote at the top of this VERY long post, Honesty is key. If you aren't honest in your finances, you will always be fighting yourself. Sticking to a budget is sometimes seen as restrictive and binding, but I know that our budget is truly the only way that we experience freedom.