Money...

What does it mean to live by a budget? Jason and I have worked very hard in our marriage to manage our money wisely. Part of this management is budgeting. Even before we were married, after we were engaged, Jason felt it was very important to start living as if we were married (money wise). So we sat down together and devised a budget, paid bills together, grocery shopped together, and balanced the check book together. At that point we already had a joint account. Some people were surprised by this, but we think it was one of the wisest decisions we ever made. We wanted to be sure we planned for the marriage, not just the wedding, and that included the not so fun stuff like money. It was nice to have everything out on the table for us both to see-debts, savings, credit cards, checking accounts...etc.

It was so crucial that we did this together. Since those first few months of engagement we have gone through A LOT financially. We've owned two homes at once (not on purpose). We had to live off of a credit card for a few months because we owned the two houses (not on purpose). We've had two children with lots of medical bills to pay for. Jason needed some major dental work done before Owen was born that we're still trying to pay off. We've replaced a water heater due to a gas leak. We've replaced a furnace, due to it's lack of reliability and old age. We had to purchase a refrigerator, stove, washer and dryer. We've had to buy a new computer because our first one died. We've traded in our 2 door car for a minivan. Jason has been through 4 jobs. (We haven't been married 4 years yet.) Let me clarify that, all but one of those four jobs he left by choice, trying to find the right fit. We have received WIC, Medicaid, HEAP, and other assistance at times. I can't forget to mention I started a business from home when I moved to NY that didn't go so well, adding on more debt. Finally, Jason has a business card he uses for his LDS Counseling expenses. And then there are those darned student loans!

There are very few people in this world without debt. Some may have less than others. I believe Jason and I have A LOT of debt. I also believe that 95% of our debt was due to circumstances we had no control over. Of course that doesn't make it any better and it doesn't make the debt go away. As Jason and I realized what a financial mess we were in we worked very hard to a) Assess the problem in detail; b) Form a plan of attack; c) Form a back up plan; d) Execute the plan; e) Review plan and progress, changing things if necessary; and finally f) STICK TO IT! In this process we read the book, Debt-Free On Any Income, by Lyle & Tracy Shamo. It is religious based but I would highly recommend it to anyone. Not only is it filled with highly valuable information, but it also comes with an interactive CD and assignments at the the end of every chapter to get your family headed in the right direction.

As mentioned, even before we were married, Jason and I handled money together. Despite the many changes in our lives, we have continued to do this. The success we have had in budgeting is attributed mostly to our working together. We discuss EVERYTHING! When both are aware of how many bills there are and how little money there is to go around, it really makes a difference.

When Jason or I have a weak moment where we want to spend unwisely, the other person helps us make a wise decision BECAUSE we both are aware of our financial situation. As crazy as it may seem to some, Jason and I check in with each other before and after EVERY purchase. Even if it's a small purchase of $5 or less. Neither of us carry cash with us, because it disappears so quickly and can't be accounted for. Instead we use our debit card for just about everything. When we balance the checkbook, every purchase is accounted for.

We sit down together every Sunday night after the boys go to bed to budget, pay bills, and discuss other financial decisions. This process is divided up into five parts, but not in any particular order.

1. Balance checkbook-This one is pretty self explanatory.

2. Budget for next pay period-We make a detailed list of all expenses. Ours includes: tithing, fast offering, mortgage payments, credit cards, medical bills, student loans, car insurance, car payment, groceries, miscellaneous items, prescriptions, gas, utilities, stamps, holidays, family activities, necessities-clothes, shoes, etc..., house repair, date nights, spending money, food storage/emergency kit, and a power payment (I will explain this in a future post). Then we write down how much we think we will spend during the next pay period. The tricky part is making sure it adds up to no more than what Jason's next paycheck will be, hopefully with a little left over.

3. Add up money spent in previous pay period-We add up all recipes and purchases, then record them next to what we budgeted, under a category labeled "actual." After we record them we compare them to what we budgeted. One can NOT be successful at budgeting, unless you go over how much you have spent after you set the budget to see if it really works!

4. Pay bills-This one is pretty self explanatory too.

5. Discuss any future expenses that may be large.-Any time there is a major holiday or plans for vacation we sit down and discuss how much we want to spend and how it will be spent. Right now we're discussing plans for the 4th of July and Adam's birthday in August. Both events will cost extra money that we wouldn't plan on in our regular budget. So far there is no extra money available. Right now we're trying to come up with ways to obtain the funds that we need.

At first this process takes a while, but if you do it on a regular basis, after a while it takes barely any time at all. Especially when pay periods are only twice a month. I can not express in words how much this process has helped us financially. Money is ALWAYS tight. There are MANY times were we have less than $5 in the checking account to last us a week before the next pay period comes in. But, for the most part BECAUSE we have followed a budget so strictly, we have had enough money to meet our needs. I can't say that there is always money for dates, holidays, frivolous spending, or even some miscellaneous items, but we make it work!

I challenge you to try it out. One of the major causes of conflict in relationships is money. This can be avoided if you work together. With that said, for the first few months Jason and I did budget together, we prayed before hand to have the right spirit and no contention. We choose to budget on Sunday night in part because our minds are on spiritual matters and we are much more focused and prepared to spend wisely. The other reason is because there are rarely conflicts in scheduling on a Sunday night. Good luck! I can't wait to hear your comments. Especially since the comment box works now!

Starting next week I will be displaying the "Recipe of the Week" as a post, not a gadget, so it will be saved and you can access it at any time.