Monthly tracking and budgeting

I love talking to people about Dave Ramsey and budgeting. I’ve been having a lot more of those conversations lately and I think it’s for a reason. Not only is it helping others, but it’s helping me get the “intensity” back. Bryan and I have a renewed excitement towards our budget and our financial dreams. Our financial dreams have been the topic of many conversations lately and each conversation propels us that much further. Who would guess that money could get us excited?! {Not in a materialistic kind of way, but in a way that maps out our plan to pay off our house!}

Here’s what our monthly budget process looks like:

Monthly Spend Tracking

• At the beginning of each month Bryan tracks our expenses from the previous month. We look at previous months to see if there are trends in over- or underspending. We decide if we need to adjust those amounts or if we need to tighten the shoestrings a little. 
• Next, we move our goal savings money from our checking account into our savings account. Usually we have to recalculate the amount because we almost never use all the money we budget in a month. Technically, that means we need to keep working on the budget to create an accurate budget. Since it involves us not spending all our money, we don’t worry too much. It’s kind of nice to have extra money go into savings!

After these discussions, I’m usually toast and ready to end the conversation. I love my husband for his attention to detail. I need to change my expectations and know that these will be semi-long conversations.

Monthly Budget Planning

• After we track our spending, I jot down things that I know are coming up that month. For example, gifts, events, parties, etc. I also look over my wish list of things for the house or personal items. 
• Bryan takes the first pass at the planning. *See below for an example of our spreadsheet.
• We sit down and review his pass at it and I add in the extras. Our budget usually doesn’t change too much from month-to-month. If we have extra money leftover, we decide what to move from the wish list or the goal list. We budget all of our money and agree on it.
• Bryan sends me a PDF file so I know what amounts we agreed upon for the extra spending items.

We never started the envelope system because we felt that we could stay controlled when using our debt card. Recently, we decided to start doing it for fast food / restaurants. We wanted to control our spend because it was our worst offender. So far it’s working out well. With the cash, we can easily decide when we want to eat out. It has finally become more of a treat and we stay within our desired budget. {I hate the idea of eating away our money!}

Something else that we’ve started doing is reviewing the budget each week. This helps eliminate a lot of time for Bryan to track all of our spending each month. Instead, I’m writing down if I spend any money during the week and Bryan looks over our checking account and enters all the current spend. {Yes, my work is repetitive, but I like writing things down.} This does two things: helps us stay on track with what we said we’d spend and also gives us an idea of what we have left to spend. Another benefit is that we may realize we aren’t going to spend all the money in one category. I can look at the wish list and revise where I’m going to spend the money. So, instead of waiting until next month for new ink cartridges, I can buy them this month. {True story. I’m printing a lot of pictures!}

Goal Review / Planning

Once we agree on our budget, we immediately review our goals. 

• We recalculate our goals savings account and look at our goal spreadsheet. On the spreadsheet, we have the savings amount and also the totals of each of the goals. These are big-ticket items such as a new car, furniture, maternity leave, or hospital bills. Items such as a new storm door or paint come out of our monthly budget. 
• We get a good feeling for where we are on the big-ticket items and decide if there is anything we want to pursue that month.
• It also helps us look ahead at items and decide if there is a better time of year to purchase any of the items.

This conversation usually leads to more brainstorming about things we want to do around the house or in our lives. Without a goal review conversation, we wouldn’t be on the same page. It really helps open up the door for communication. This is very important during this phase of life with a toddler and newborn. There aren’t a lot of opportunities to have conversations where one of us isn’t exhausted!

We’ve been using a budget for two years. There was a period of time, when we became lax, that we didn’t actively review our budget. We got into a rhythm and had a feel for how much we should spend. We were in a good spot in our journey and weren’t worried about every extra penny. After a few months, we snapped out of it and realized that even if we had a “feel” or weren’t spending too much extra, we needed to get back on track. We may have not been in need of that money, but we were wasting it. For us, a budget means we spend our money wisely so we can achieve our financial dreams.

What’s your budget process? 

Other financial journey posts:

• Baby Steps Four and Five
• Shopping on a Budget Can Be Fun!
• Prioritizing Financial Goals
• Debt Free!