Budget or Be Broke Together!!!

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Without a budget, NOTHING is possible when it comes to your finances as a married couple. It’s one of those annoying and time-consuming things that we have to deal with. We all spend money easily, but unfortunately, a lot of us have challenges with setting financial goals, budgeting our money, and staying committed to it.

Ok, so how do you and Felice budget your money as a couple?

It wasn’t until we got hipped to Dave Ramsey (“The GOAT of Personal Finance”) that we learned about ZERO BASED BUDGETING. It’s a way of budgeting where your income minus your expenses equals ZERO. With this method, you give EVERY dollar in your budget a name for the given week/month, whether it's allocating $100 to entertainment expenses for the month or putting $50 in your savings account for the family vacation you have planned later in the year.

Since money is one of the main factors attributing to the demise of many marriages, I thought it would be valuable to share with you on how we use the zero based budgeting method and tailored it to fit our current financial situation.

Here is a quick rundown on what you and your spouse can do to get started on your Zero Based Budget:

  • List the amount of your income source(s) (e.g. paychecks, money from side hustle)

  • Determine the amounts related to your paycheck deductions and contributions (e.g. 401K, Taxes, Insurance, Tithes)

  • List the amounts of your expenses (e.g. rent/mortgage, utilities, student loans, cable)

  • Determine the amounts that will be budgeted for regular expenses, such as groceries, entertainment and household items

Once you both figure that out, you simply subtract your expenses from your income.

Sidebar: There will be times when there will be money remaining for the given week/month. So you and your spouse should figure out what to do with the left over money, whether you guys use it to pay down debt, save it, invest it or even donate it.

Using a zero based budget has allowed us to know where every dollar goes for each paycheck and has given us peace of mind when it comes to our money. Our budget provides financial boundaries that we can operate in and gives us structure while we are on our #DebtFreeJourney.

Keep in mind that there isn’t one perfect way to budget your money. You and your spouse can do a budget every month, every week or even every day. The MOST important thing is that you both have a budget that’s on paper (or in Excel) and it is tailored to your financial situation.


EXAMPLE TIME: Let’s say that you and your spouse both make $2,500 (gross) every two week from your respective jobs and yall have a few bills that have to be paid for the given week/month. 

Income

For the income section of the budget, determine your Net Income for each paycheck by subtracting your retirement contributions, taxes, and insurance from your gross pay.

Typically, we have 4 paychecks (1 check per week) between us in a month. There are times where we will have 5 total paychecks that hit our account in a month, when one of us receives 3 checks for the month. The next 3 paycheck months for 2018 are August and November.

Typically, we have 4 paychecks (1 check per week) between us in a month. There are times where we will have 5 total paychecks that hit our account in a month, when one of us receives 3 checks for the month. The next 3 paycheck months for 2018 are August and November.

Expenses

Next, list out all of the expenses that are due before the next paycheck and determine the total amount that is due during the related pay period.

For larger expenses (rent, student loans, car note), we typically break the payment amount over the 4 paychecks that we receive in a given month. This has really helped us spread out our money and it has lessened the blow when big amounts hit the budget.

For larger expenses (rent, student loans, car note), we typically break the payment amount over the 4 paychecks that we receive in a given month. This has really helped us spread out our money and it has lessened the blow when big amounts hit the budget.

Budgeted Items

For those things that you two pay on a regular basis or want to set money aside for like groceries, entertainment, you can allocate a portion of your money from each paycheck to those items in your budget.

For our budgeted items, we started off using the envelope method, where we would take cash out of the bank and place it in the assigned envelope and use the cash to pay for items that were related to the budget category. However, a few months ago, we stopped using the envelope method and decided to open up another checking account to use for our budgeted items specifically. Both methods work…just find the one that best fit your situation.

For our budgeted items, we started off using the envelope method, where we would take cash out of the bank and place it in the assigned envelope and use the cash to pay for items that were related to the budget category. However, a few months ago, we stopped using the envelope method and decided to open up another checking account to use for our budgeted items specifically. Both methods work…just find the one that best fit your situation.

Take Home Pay

Once you guys set up your income, expenses, and budgeted items in your budget, you can determine your Take Home Pay for the given week/month by subtracting my expenses and budgeted items from my net income.

After you determine the take home pay, you may have some money left over for the given week/month. You and your spouse must figure out what to do with the remaining money, whether it’s for spousal allowance, saving, investing or putting that money towards debt.

There is an Excel formula in our budgeting spreadsheet to calculate the take home pay. This amount changes from week to week for us, but we are able to allocate those funds to various things like our allowance, our savings / business account and even the student loan that’s currently in the debt snowball. With the way our budget is set up, it allows us to play with the numbers and have more control over our money throughout the month.

There is an Excel formula in our budgeting spreadsheet to calculate the take home pay. This amount changes from week to week for us, but we are able to allocate those funds to various things like our allowance, our savings / business account and even the student loan that’s currently in the debt snowball. With the way our budget is set up, it allows us to play with the numbers and have more control over our money throughout the month.

Here’s a full snapshot of the ZERO BASED BUDGET that we just went over.

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Drop a comment below and let us know what budgeting methods(s) that you and your spouse use.

#BudgetingMatters #BudgetOrBeBroke #FinancialWellness