The Life of Bon: A Rookie's Guide to Budgeting

Monday, June 22, 2015

A Rookie's Guide to Budgeting

The past year I have felt like the money has come in and the money has gone out faster than I can really put my fingers around.  The more expenses we have, the less control I have felt like I have over the money.  Since we bought a home I feel like our expenses tripled- we need a washer and dryer, now we need couches, HOA fees never stop.  We also had other random expenses- I had to pay $500 to get my tooth fixed, June's hospital bills just kept on coming etc, etc.  It has been slightly overwhelming for me to try to get a grasp on our money situation this year.  We have been able to save some, but not nearly the amount I would like to to feel comfortable.  Greg and I have always struggled to be on the same page when it comes to money, how we spend money, how much we save, etc., but in the past month I feel like we've made a bit of a break through.  

 Last month I found this budgeting app, HomeBudget, that has seriously made all the difference in our spending.  This is our first month of really diligent money tracking, but so far we have spent way less on our credit card and I feel so much more in control.  I am going to share with you our money plan now, and in a few months when we have worked out some kinks, I will share again.  This isn't anything huge, and I am sure there are many of you out there who are much better at managing money than I am.  This is a budget for two people who don't like tracking money and aren't terribly good at it.  It is as simple as it gets, but for right now for us, it is working.  Like Dwight Schrute says, the key to a successful budget is KISS.  Keep it simple stupid.

*Note*- Greg hates the idea of a budget.  He feels like it is me putting a leash on him and telling him that his beloved snack stops at 7/11 have to stop.  Our entire marriage it has been hard to be on the same page with budgeting because I have wanted a strict budget, and Greg has wanted no budget.  After four years together we have been able to meet in the middle with a budget that allows some freedom for both parts, but still holds us accountable for our spending and works towards savings.  I finally succeeded in getting Greg to sit down and work out a budget with me.  The trick was, weirdly enough, I stopped calling it a budget.  I think that word itself just carries too much of a negative connotation to it.  Instead I said I wanted to make a "plan" for how we were going to spend our money.  All of a sudden it didn't seem so threatening to Greg.  So if you've got a partner who avoids budgets like the plague, there's your suggestion, folks.  You do what you can!

I feel a little weird putting out there how much we earn and spend (oh my gosh we make money!  don't tell anyone how much!  And don't tell how much you spend either!  Poor taste! ) but you all already know we're both teachers, so I don't think it can be too much of a surprise to you that we're not exactly swimming in money.  We make enough for our needs, though, and are trying to work hard to put some away and invest and one day be millionaires.  You know.  American Dream and such.

Okay, so here's our guaranteed earnings each month:
(School money is post taxes, post health insurance, and post retirement money- we put in $200 a month to retirement for now)

GREG SCHOOL:  $2300ish
BLOG GIGS: varies

And here is the budget for our spendings that we have used the past month:

Mortgage: $1300 (we pay a bit extra each month, trying to get ahead.  We'd love to get this paid off within fifteen or twenty years and eventually rent our townhome out)
Electricity: $105 
Gas/ Heating: $40
Cell Phone: $60
Internet: $60
Dish: $50
HOA fees: $109
Home furnishings and supplies: $100

Gasoline: $150
(right now we have no car payments.  WAHOO!  I don't know where to put the category for car insurance, though, as we pay every six months instead of monthly.)

10% of our monthly income
(for more information on tithing go here)

Daycare: $275
Food/groceries: $250
June expenses: $40
Dates and Family Activities: $160
Discretionary Income Bonnie: $200
Discretionary Income Greg: $200

Now, this is a pretty rough budget and not crazily specific because I know that would probably drive us both insane.  For us it is important to have just a few, broad categories instead of a million small ones we are constantly trying to track.  Family activities goes for anything that we are doing together either as a family or as a couple- eating out, going to the movies, paying for a babysitter, etc.  If we eat out, but we are not doing it as a couple or family, it comes out of our individual discretionary income category.  (I have found that this absolutely has limited the amount of money I waste on fast food because I would much rather use my discretionary income for clothes or a new computer than waste it all on food.)

Toiletry items come out of the grocery budget; cleaning supplies can come from groceries or from household supplies.  Gifts right now are kind of a gray area.  They come out of discretionary income if they are for each other but I'm not sure when they're for other family members or friends.  It's also hard because gifts isn't a monthly expense.  We also don't have a category for medical needs- again it's kind of tricky as it's not a constant monthly expense.

The home furnishings category is for anything we want to spruce up our home.  The sod I laid last month came from there.  A new pillow.  Shelves for the kitchen.  Save up for a new kitchen table. I love knowing I get to spend a little money on my home each month and not feeling like I really can't afford it.

June's expenses include mostly diapers and clothes.  I don't know that it'll be able to stay as low as $40 a month for long.

Already I know the food category will have to be adjusted.  It is only June 22 and we have already spent $300 on groceries, so $250 a month isn't going to cut it.  How much do you guys spend a month on food?  I always wonder what is a normal amount?  I feel like we blow so much money on food and I don't know how to buy groceries smarter.

The discretionary income categories are what make the budget successful for Greg and me.  I think some people are probably more disciplined or enjoy spending money a little less, but for Greg and I we both really enjoy just having a little bit of money that is ours to spend however we want.  The idea of a budget was daunting to Greg because it meant he couldn't spend money on the things he wanted most anymore.  The $200 discretionary income takes so much pressure off of us.  Every time Greg says he wants something I don't have to stress how we're going to pay for it and we're spending way too much money.  When I want a new blouse I don't have to constantly deny myself until one day I go on a huge shopping splurge and spend all the money I thought I was saving. The best part of the discretionary income is that it takes away the guilt.  Spending money is hugely associated with guilt for me, and having a plan like this takes away that guilty feeling.  It's awesome.

Now, for the app.  Before I was trying to use the Mint app but it just wasn't cutting it because it was trying to guess where I was spending my money.  Let's see... $50 to Target, what category should we throw that in?  Also, I was slightly paranoid about linking up my bank information and credit card information... I don't know, I just don't like that kind of info linked to an app.

HomeBudget is a manual app. (It does cost $6 for the app.  You can get the "Lite" version for free, but it only allows you to put in 20 expenses.  I started with the Lite version, took it for a test drive, so to speak, and then once I hit the 20 expenses, I went ahead and forked over the $6 for the app. I was able to easily transfer everything over to the non lite version.  It's totally worth the $6!)  You put in how much money you are spending on each item as you spend it.  The minute I buy a $12 dress for June, for example, I put it right in the June's Expenses category.  It adds up how much you have spent for the month and tells you how much you have left to spend in each category.  It will also rollover money if you want it to.  It takes a minute to get into the habit of recording every time you spend money, but once you do it is easy and convenient.  And for me it makes me feel so safe.  I know how much I'm spending, I know where it's going.  I feel so much more in control and I LOVE IT.

The top number is how much we are allowed each month ,the bottom number is how much we have remaining.  In the cases where the bottom number is in parentheses, that's where we've gone over. 

This is a list of the money I spent on my discretionary income.  Mostly on junk food this month!

One of the coolest parts about the app is that it syncs between multiple people- so you and your significant other can both keep track of your money, and it will update automatically on your device.

Keeping track of the spending is still entirely doable if one partner doesn't want to add in every little expense, which is great news for me.  I know Greg well enough to know there is no way he's going to pull out an app and record $4.62 when he goes through In-n-out for lunch.  So for Greg's discretionary income we just give him $200 cash at the beginning of the month.  He spends that money however he wants, but when it's gone, it's gone.  Groceries or gas he buys on the credit card, and then I just check our credit card spendings once every ten days or so and record any purchases he has made and put them in the appropriate category.  I feel like a budgeting genius!

Right now Greg and I spend pretty much every dollar that we earn from our teaching.  (This is the sad sad reflection of how much teachers make in our country.  A full time teacher and a part time teacher with only one child can barely pay all their bills on their two incomes.  When will teachers get paid more!?)  We do, however, earn extra money from our side jobs.  I earn money from blogging, and Greg earns money from acting/directing/ commercials.  Greg also gets a stipend for directing the school's musical and for running the auditorium.  These are "bonuses" and go straight to savings.  I get money for doing sponsored campaigns on my blog.  These are "bonuses" and go straight to savings.  Our goal is to save all of our "extra" money- a hopeful goal of $1000 a month.  (We have yet to manage that, but I am hoping with our budget in place and less unexpected expenses next year we can do it.)  There are lots of possibilities for our savings- grad school, a second child, finish our basement, pay down our home, vacations, a bigger car...

Alright, there it is folks!  I hope you love the budgeting app as much as I do.  This is 100% not sponsored content, but it is something that has changed everything for us in the way we spend our money.  I seriously want to tell everyone I know about the app.  I hope you love it as much as I do!

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