Since I did spend some significant and generally peaceful time working on our budget, I thought I'd share some practical tips on how we budget that might be helpful to you. Why? Because the majority of people I know don't know where their money goes each month or they do "track their spending" with a tool like Mint and call it budgeting. Just for the record, that's not budgeting, that's just watching yourself overspend more closely. I wish I knew in my early-to-mid-20s what I know now about budgeting; I would have been saved from a lot more headaches and a lot more money also would have been saved!
When Stacy and I got married, some debt was brought into the marriage. I can't quite recall how much, but I think it was somewhere between $10-20K. That debt included some of Stacy's student loans and some credit cards between us. We also had no real savings, perhaps a couple hundred dollars.
My job was the main income for our us. Unfortunately, Stacy couldn't get her teaching license in Seattle on time because she moved there late summer, so she rocked some substitute teaching to help with additional income and because she enjoyed it. Neither one of us were serious budgeting folk before marriage, though I had a tried a ton of different ways, including Mint and so on. We were starting from scratch. I had just turned 30 and she was 27. We started taking budgeting seriously just over two years ago. And in full disclosure, I received a hefty raise at my previous job that helped a lot, but more on that later.
In the interest of time, I am going to share The Lisi Home of Budget Practices and then delve deeper into them in future posts. Maybe, because this is the week of Tax Day I just write all week about budgeting and money? What joy! What bliss! Okay, so the three main to budgeting for the Lisis are:
The Lisi Home of Budget Practices
The three main parts to The Lisi Home of Budget Practices are:
1. The Foundation: Dave "The Rabble-Rouser" Ramsey
As the foundation for a house is the most important, most time-consuming, and least pretty, such is the work needed to get a budget right. But there's no better way to build that foundation than with Dave Ramsey. His book, The Total Money Makeover, his training, Financial Peace University, and his budgeting tools can help literally anybody at any stage of life get their financial lives in order and with, for the most part, the right motivation. This was the absolute key for Stacy and me.
2. The Walls: YNAB
YNAB, or otherwise known as You Need a Budget, compliments Dave Ramsey's work nicely. I'll liken it to the walls of a our house here, but there's probably a better analogy. The unique teaching here is budgeting for next month off of this month's income. This simplified many of the challenges Stacy and I faced with budgeting and helped us feel the freedom to use credit cards again (which you will learn with Ramsey is a big "no-no").
3. The Personal Touch: Good Ole Excel
Like with any home, there are some customizations that just make it feel like yours. I didn't feel like a needed another app, which is what YNAB is really all about, but we needed a better way to track our budget and monthly spending. I combined some of Ramsey's budgeting tools with some cloud-based Excel goodness (Google Spreadsheets) and crafted something Stace and I can use pretty easily.
I look forward to sharing more on each of these in the days to come. I'm basically repackaging the thoughts and teaching of experts, so don't freak out if you think I'm actually giving financial advice. If you know folk who this could help, tell them to tune in.
This blog is an idea. An experiment. An adventure. I am writing a post on one thought for 30 minutes everyday for a full year. If you like what I write, have an idea for me to write about, or have any feedback, please share in the comments below. Also, if you think it is at all valuable to you, share it because it just might be the same for someone else. Boom!