After 12 years of marriage, Shem and I finally got on the same page financially. Twelve. Years. That’s twelve (plus) years of not knowing what the heck was going on with our money. I mean, we tried, we really did… but we just were not connecting.
This was one topic we couldn’t safely discuss without dissolving into arguments or misunderstandings. So, we avoided it. Until we couldn’t avoid it any longer, and then neither of us really had a grip on what the picture actually looked like.
Einstein says the definition of insanity is doing the same thing over and over but expecting different results (paraphrased, obviously) and I’d like to add a second definition to his: insanity is arguing about stuff that you don’t know anything about. Yep, even your own finances.
Without all the facts, we would never get on the same page. We had to get on a budget, we had to get there together, and we had to do it peacefully. Enter the Personal Finances for Self-Reliance class through The Church of Jesus Christ of Latter-day Saints.
That’s a mouthful. Basically, our church offers a personal finance class with the end goal of helping families become more self-reliant. Love it.
We committed to this 12-week class last summer and worked our way through it… together. We learned so. so. much. And we have stayed on a simple and successful budget ever since starting. That’s a huge accomplishment after 12 years of ignoring that money even existed!!
So what made the difference for us? What was it about this class and this approach that finally got us on the same page?
I think there were a few contributing factors, but one of the biggest was the process the class took us through to get us on a budget in the first place. It actually works. Promise.
Here’s the process, which you can start TODAY.
With pen and paper, track every dollar (incoming and outgoing) for 4 weeks. Just grab a notebook or some loose-leaf paper and write everything down. You’ll want to track the date, where you spent the money (or where the income came from), the dollar amount, and assign each item a category. You know, like, groceries, eating out, utilities, clothes, etc. If you’re doing this alone, awesome, but if you’re married or have a partner, commit to working together on this.
I love this first step because it is NOT stressful at all. You’re just writing stuff down. You aren’t changing any spending habits, no one’s the bad guy (yet)! I really don’t recommend skipping this step – it’s going to give you a basis to build your first budget on. Without it, you’re just stabbing in the dark. And don’t worry about delaying a for-real budget for another 4 weeks. You’ve been living without one for this long, just roll with it!
At the end of the 4 weeks, total the amounts spent for each of the categories you came up with. This gives you a solid starting point for your first budget. Reflect on the totals you came up with. Are there areas that you’re overspending? Or maybe not spending enough? Make note of your review of these numbers.
Build a new budget! You’re going to want to decide what method you’ll use to budget, so do some research on the various methods. We chose EveryDollar.com (*not sponsored*) and we absolutely LOVE it. You could use pen and paper, the envelope system, set up a spreadsheet, etc. EveryDollar.com is free and easy to set up, so that’s got my vote.
Once you know what system you’re using, you’ll need to plug in your numbers for each category – and you don’t need to stick with the number you came up with while tracking over the previous 4 weeks. We ended up realizing we were way overspending in several categories and seeing those numbers on paper was a big reality check. We were able to create a new budget with goals that were less than what we’d spent during our tracking period.
For example, if you spent $1,100 for groceries in the last 4 weeks, and you think you could spend less than that if you took the time to meal plan, then maybe shoot for $900 next month. Once you do that, you can try to lower your budget the following month until you find a sweet spot that’s realistic and sustainable.
- Our experience: We actually did spend $1,100 on groceries for those first 4 weeks. HOLY. CRAP. For us, a family of 5, that felt like a lot of money on food. We decided to really challenge ourselves and set a goal of ultimately getting to $600 a month for groceries. It took a couple of months to figure out meal plans and a shopping list that could get us there, but we have totally achieved that goal (often coming in below $600 a month) for the last 5 months! Each month, now, is a game to see how far under budget I can get us in each category, but especially in groceries.
Continue to track your expenses daily. Yep. Every day. If you get behind, catch up quickly. Catching up is such a pain and can lead to a lot of miscommunication and confusion. Don’t go to bed without tracking the expenses of the day, sound good? Then, have a weekly meeting with your spouse. This may sound excessive or unsustainable, but seriously it only takes 5-10 minutes a week. You can give that time and attention to your budget each week, right?! YES!
In that weekly meeting review how the past week went, address any area that you may have gone off track and need to course-correct, and discuss any expenses you expect in the week ahead. For example, our quick weekly meeting will look something like this:
- Review last week. Any areas we’re over budget? Or areas we’re close to being over budget? What about areas where we probably won’t end up using the budget, and can, therefore, reallocate those funds to something else like debt or savings?
- Course-correct any issues. Peacefully, if you’re doing this with your partner. You’re on the same team, don’t let this be stressful.
- Discuss the week ahead. Lunches out, date nights, kids school events or field trips, any extra driving we’ll be doing or grocery trips, even. Just make sure you’re on the same page.
Easy peasy lemon squeezy.
This process has been a game changer for us. I’m not kidding when I say this is the first time in over 12 years that we’ve been on the same page financially. Incidentally, it’s also the first year that we’ve made huge progress toward our financial goals of building savings and paying down debt. I’d love to keep sharing what we’re learning along the way as I’ve become super passionate about this process and what it has done for not just our finances but also for our marriage. We are so much closer now than ever before and it’s helped us communicate better about all kinds of things.
What do you want to know more about when it comes to personal finance?! Leave a comment and I’ll be sure to address it in an upcoming post.