Wednesday, September 7, 2011

The Priority of the Home: Part 2

Yesterday I introduced some "systems" Andy and I have in place at the Wood household to help us make sure Family Life gets a top priority in our lives and in our hearts. Here's the benefit of systematizing it:

A system
       Energy &

One system that we have in place is our weekly finance talk.

I am no expert on finances. But I do know that, statistically, financial problems are one of the leading causes of divorce. One of the greatest things Andy and I ever did for our marriage was to go through Dave Ramsey's Financial Peace class. I am of the belief that the class should be a requirement for every couple before they get married. It's that good.

Each week (normally on Tuesdays), I "update our finances". That includes paying any bills as well as entering all of our expenditures into our budget spreadsheet. Because I try to do it on a weekly basis, it doesn't take that long. I can typically get it done during Sammy's naptime.

We don't use any fancy programs for our budget. We just have a Google Doc spreadsheet where we keep track of each of our budget categories. In the past we used Excel for this, but we like having it as a Google Doc so that we can look at it online from wherever we are. For example, if we're at the mall and Andy wants to know how much money he has in his clothing line item, I just pull up the Google Doc on my phone and can tell him the exact amount. It eliminates the need to carry cash envelopes for the various categories, which was quite cumbersome to me.

Everybody's categories look a little different, but our categories include:
  • Giving
  • Housing
  • Groceries
  • Restaurants
  • Household/Hygiene
  • Auto
  • Auto Insurance
  • Vacation
  • Entertainment/Recreation
  • Andy's clothing
  • Stacie's clothing
  • Caedmon's clothing
  • Sammy's clothing
  • Savings
  • College savings for kids
  • Medical/Dental
  • Gifts
  • Office
  • Miscellaneous
That's more categories than a normal budget has, but I've found it's helpful to be very specific so I can track our spending carefully.

Click here to view a generic Google Doc I made to give you an idea of what our budget looks like. (I changed all the numbers and percentages.) MTD stands for Month To Date and YTD is Year To Date. You'll notice that there is a formula entered in those cells that automatically tallies your spending in each category. Feel free to copy this and make a Google doc of your own if it would be helpful for your family.

After I have updated our spreadsheet, it's very easy for Andy to glance at it on Tuesday evening and have a good understanding of where we are financially. Our weekly financial talk is typically all of 5-10 minutes, but it keeps us on the same page. There are occasions where we'll go more indepth to do some long term planning or something, but that is not a weekly conversation.

I know budgeting can feel totally overwhelming if you're not used to doing it. OR maybe it feels like you're voluntarily locking yourself in a cage. From my perspective, however, it is totally liberating. When you have a budget and know where your money is going, it takes all of the fear and guilt out of spending. I don't ever have to feel guilty about buying that shirt or that present for a friend if I know the money is there.  It also allows us to be extravagant and cheerful givers.

If you don't do any type of budget at this point, let me just encourage you to take 2-3 months to simply track your expenses. Don't worry about how much you're spending in the various categories at this point. Just enter the information in the spreadsheet. Once you get a good understanding of where your money is going, you can start to boss it around a little more. "Hey, you! You go in that category!"

So, perhaps this is not the most interesting post on this blog, but I hope it was helpful. Having a strong financial system will eliminate 95% of financial tension in your marriage. That other 5%, system is perfect! :-)

Let me know if you have any questions that I might could help you with.

1 comment:

Kelsey said...

Hey Stacie,

You may already know about this and just don't want to use it, but I thought that I'd pass it along in case you don't. Have you ever tried It's free and lets you track your budget I an awesome visual manner (handles rollovers month to month, progress bars, etc.) It also integrates with your bank accounts and will automatically pull in transactions from your debit cards, bank transactions, etc, and will automatically put them in the right budget bins when it can. You also can use it to track any loans, credit cards, etc. if you have any to make sure they get paid on time. (It will even email you a reminder to pay them.) And, since it is online, it is accessible online from anywhere just like Google Docs. I found this a *huge* time saver for budgeting in our family, so then we could spend more time together instead of doing data entry.