Budgets

Marriage showed me the need for budgets.

Most of my life, I’ve lived on one principle when it came to money: save everything so you have it when you want it. Basically I tried never to buy things like gum, coffee, etc, outside of what I could find in my house. I didn’t buy the latest video games the day they went out, instead I’d wait a few weeks until Christmas or my birthday (unless it was the system itself). Afterall, who needs video games when you have WoW.

Marriage changed my ability to live like that though.

The first thing it did was add a ton more expenses to my life. Home Mortgage, Life Insurance, Utilities, Associate Fees, Groceries, just to name a few. In fact, prior to even getting engaged I laid out everything I could foresee (with the help of my parents) budget style to insure that while Amber was in school, I could pay all the bills. It all works out on paper :-).

The part I failed to see in advance was just how different 2 people’s spending styles can impact the bottom line. Let me be clear: there’s nothing wrong persay with how my wife handles money. The problem came in with the ability to have foresight of the unknown.

At first we tried getting her to come to my way of thinking. That failed. It takes a lot to change who you are… more than I think most people realize.

So starting this month, we’ve switched to a full fledged budget. I spent a lot of time looking for tools to help us do this. I was going to go with excel, but maintaining it at a transaction level with 3 accounts to keep in check was going to be a pain. So I decided I needed to find a better solution. I started online, by looking at things like mint.com, geezo, quicken online, and something that started with a W. All these tools had great features, but were lacking in my “I want to see the numbers” attitude. Trending by spending category is great, but I need to see it in balance sheet style with income at the top and broken down by category. I’m a pretty demanding user.

I ended up buying quicken because based on screenshots, it had exactly what I was looking for.

Now here’s what I will say so far about the process.

1) Quicken isn’t the easiest software in the world to use. In fact, I pretty sure that at least with some of the features in it, I’m not using it properly (for example, I dont have it monitor my bills at all… I simply and using it on a transactional level). So it doesn’t predict things for me (i dont want it to, because it can’t see the unknown, and gives a false sense of security).

2) Given #1 – It took me about 3 hours to categorize everything for the last 3 months, across 3 bank accounts, and turn it into a budget style type thing. All in all, not bad.

So yeah, all in all, I think it’s going to be a great experience running our household like a run my business… Kind of crazy though :-). Family budgeting… sheesh.. whats next?

Let me be clear on one last point: we aren’t broke, or anything close to it. We simply seemed to keep increasing our spending month to month without increasing our income or savings (partially due to student loans and medical bills, partially due to more time spent at home), which was eventually going to get us in trouble if it didn’t slow down the increase in the rate of spending. We also needed a way to hold each other accountable (it’s really easy to overspend money that someone else is saving for something bigger when your married).