My husband and I have been married for almost 5 years now. We were basically babies when we first got married. I was still in college, David was just starting our ballroom dance business out, and we were both working part-time, minimum-wage jobs in-between everything else. We had very little “real-life” experience and we were barely making ends meet. We were so incredibly fortunate to have parents that were willing and able to help us out in areas we couldn’t until we were able to get our feet under us.
Our first year of marriage was a financial struggle-bus. Between the two of us, we were bringing in maybe about $1500, total, after taxes. We had to use that to pay rent, utilities, our grocery bill (which consisted mostly of bread, peanut butter, pasta, rice, and canned veggies), gas, etc. I’ve always been the one to handle the money. It was never really a big issue, we would talk over the money, we had a joint checking and savings account, and I handled the bills…but even still, I had very little experience to know what to do.
I remember many times looking at a bill then looking at how much we had in our account and wondering where what little money we had, had disappeared to. It took a lot of trial and error, but five years in and we have finally found a groove that works for us and I’m excited to share some of those tips & ideas with you over the next few weeks.
1.Create a list of your basic monthly bills.
- Obviously, you’ll want to start with the absolute necessities- ESPECIALLY if you’re on a very tight budget. Include things like mortgage/rent, utilities (electricity/water), gas (because you can’t keep a job to pay your bills if you don’t pay for gas to get to the job), etc. The attached list you see is listed by priority for us. Personally, we always take our tithe out first so we KNOW there is at least enough to give back to God. Some of you may think that’s crazy…especially if you’re living on a tight budget…but I’ll tell you, since we’ve started giving tithe FIRST, we’ve never not had enough money to pay our bills…and we often have money left over.
- If you’re a paper-pencil person, check out the organization notebooks or ledgers available at your local office supply store. If you prefer going digital, create an excel sheet like mine (or download my basic format here: Customizable Basic Budget Format)
2. In the 2nd column create a budget of the predicted amount of money you can/will/think you will pay towards each bill for the current month.
- Keeping in mind how much money you make each month, go ahead and start creating a general amount you are willing or able to pay towards each item (again, keep the necessities as a priority). This part is totally customizable, so make it work for you and your family.
- As I was first starting this process, I actually used the bills I had to get a general idea/average amount I’d pay. This part can take months to get right as some bills (like electricity) change depending on the season. For a budget item like electricity, I try to take an approximation of how much it might cost. For example: I put $120 for electricity because I know that in the extreme cold/hot months, that’s about how much my bill will be, so in the more mild months, we have a bit more wiggle room.
- It’s a good idea to set your budget item higher so you can adjust from there. It’s better expect to pay more, be prepared for it, then not have to pay that much…than to expect to pay less and not be prepared for it when a bigger bill comes.
- The auto-sum tool in excel is VERY handy for this column. Set the auto-sum tool to work in the very last box so that as you add budget item numbers, the total automatically adjusts. This is great in helping you see whether you have a lot of wiggle room or if you need to cut back in some areas.
3. In the 3rd column you’ll put the data for what you ACTUALLY pay towards bills.
- The number you put here could be more than what you predicted or less. This is where it will take a few months to get the numbers adjusted.
- There will be some bills that the number in each column is the exact same because it’s fixed, but the items like electricity will fluctuate.
- The longer you use a system like this, the more you’ll begin to see patterns in your home and expenditures.
- This is also a great way to see if something’s not quite right- say your water bill is $20 more expensive than usual but you didn’t really change any laundry or shower habits- that’s a clue you might have a leaky faucet or running toilet that needs to be fixed.
- I really like doing this in an excel sheet because you can compare the bills over a long period of time, and you can adjust your budget more easily than having to erase or use white-out.
- In excel, I also use the “cell fill” option to indicate whether a bill has been cleared through the bank. It’s easy to do if I’m using cash or it’s an automatic withdrawal, but if I write a check, I’ll type the number in the cell then leave it white. Once the check has cleared the bank, I turn it green. This shows me which bills are unpaid, and which haven’t cleared yet. This is helpful when it comes to comparing how much you have left in the bank vs. how much you have left to pay in the month. Say it’s a wacky month for your electricity…using this tactic can help you plan ahead by moving money from savings to avoid any overdraft fees the bank might charge if you were otherwise surprised.
As you’re creating a budget- there are a few things you need to begin considering, especially if you have a tight budget:
- What do I REALLY need?
- What can I REALLY live without?
- Will buying this thing now REALLY satisfy me…or will it just cause me more stress and debt later?
And ultimately, whether you’re on a tight budget or not…really start thinking about those things. Start reflecting on where you’re setting your heart…are you setting it on temporary things that will disappear, or are you setting it on Christ- the only one that can truly satisfy you? Is your happiness dependent on name brands and stuff, or are you happy with what you have, even if it’s not the “next best thing…”?
“For where your treasure is, there your heart will be also.” – Matthew 6:21