Budget Committee Meetings
Yesterday I had my very first guest post! Mary from Mary Sievers, CPA, asked us to write about our budget committee meetings. Here's what was posted: You can read our full debt-free story here. My wife, Kelsey, and I had seen an ad at our church for Financial Peace University. This was intriguing to me. Pay $99 for (what I assumed to be) a pyramid scheme to learn how to get your financial life in order. Soon after we heard about the class, we took a trip to Kansas City and spent lots of money on frivolous things. It wasn't long after that Kelsey gave me the look and said, "I think we should enroll." (That look means, "We are enrolling".) I do love to learn, though, and was OK with the decision after we agreed that we would dive in all the way and get our finances in order together.
So we enrolled, and we learned. We were nearly in tears when we did our first budget. Let me just say that the fact that you are reading this blog on the Internet qualifies you to do your budget electronically. This is a must. Dave Ramsey's paper budget forms are great, but they take a very long time and heaven forbid if you have to change something. If I could change one of his quotes, I would change it to "When you budget, you're spending
on paper in a spreadsheet, on purpose, before the month begins."
First thing Dave recommends for budgeting is to have the "nerd" prepare the initial budget. Then present said budget to the "free spirit" for changes and approval. Negotiations take place, then you spit shake and stamp the approval on the budget for the month. This, my friends, is called the budget committee meeting. He calls it a committee because it is. Each spouse has an equal vote, and, no, it doesn't matter who makes more money. You lost that card when you signed your marriage license.
If you are single, I highly recommend having an accountability partner. You need a trusted friend who will reveal the ugly truth to you when you really don't want to hear it.
Either way, the key we have found to the budget meetings is keeping everything electronic, as I said before. We use a spreadsheet provided by our mentors that helped us through FPU. They offer this for download on their website. We use the Allocated Spending plan (monthly) from month to month. We simply copy the budget and paste it into a new tab and then make the necessary adjustments that are needed. The first few months were rough, but as we did it more and more, we started to get a routine with it and eventually we got really good at anticipating upcoming expenses that initially would cause us panic.
Before You Budget: Consider Your Family Calendar
It's very important to sync your life events with your budget. If you have RSVP'd for a wedding in the upcoming month, that needs to be on the budget. Think about all of the expenditures that might come up. Gas (if it's out-of-town), gifts, food on the go, drinks at the reception, hotel accommodations, etc. Weddings wreaked havoc on our budget the first year we started budgeting. We were invited to 13 weddings, attended nine and were in six of them. Each month we were planning out how much needed to be saved for tuxedos, dresses, bachelorette gifts, wedding showers, etc. That stuff adds up real quick, and you certainly don't want to be at a wedding event worrying about where the money is going to come from.
Emergency Budget Committee Meetings
They happen. You can't plan for everything in life and for that you have the emergency budget committee meeting. Kelsey and I keep a very open line of communication when it comes to our budget. We don't get something out of the vending machine at work without telling the other about it. I know this sounds like overkill, but it has completely freed us from having any sort of trust issues when it comes to money. And when something comes up, we simply have an emergency meeting and sit down at the computer and find a solution in our budget. Sometimes this means sacrificing in other areas, and sometimes it means that we don't get any entertainment money for that paycheck.
How do you work your budget every month? How often do you have emergency budget committee meetings?