Did I get your attention? ;) I hope so, cuz this hip-hoppin' rabbit is awesome. And even more so if you're a little kid! (which, let's face it, is like 1/2 of us.) So today's post is a bit of budgeting, a bit of fun, and bit of a cool giveaway. And no I'm not getting paid to say any of this, I genuinely think this is an awesome product for any rugrats you may have.

First, a little summary on Sammy The Rabbit:

"Sammy Rabbit is a nationally acclaimed bunny who teaches children to save money (and other good habits) through story books, music, coloring books, stickers, standard-based lesson plans, training guides, and live author-character appearances. He's been featured by Kiplinger's, MSN Money, the Motley Fools, etc. and has been recommended by numerous experts including author David Bach, the Automatic Millionaire. As Steve Rosen, Kansas City Star Editor pointed out, Sammy's multi-media approach to financial education that includes toe tapping music is intelligent and infectious. Sammy is easy and inexpensive for adults to use and easy for kids to understand."

What probably sold me on this, though, was that fact that this rabbit raps! And not only that, but he has a Budget Rap! So naturally I was impressed from the get go. So much so that I'm now going to copy and paste the lyrics to this budgeting greatness, and then give you the link to listen to the mp3: Play Me. It's not as great as MY rap song (thank you very much) but it's definitely more appropriate for the youngin's ;) Check it:

B-U-D-G-E-T BUDGET!

Chorus
A budget is a money plan
Tells you where and when your money's coming in
Tells you where and when your money's going out
Keeps you from spinning round and round
Shows you just how your money flows and where your money goes

You add it up, you subtract it down
In and out, up and down
That's what a budget's all about
Answers all your who, what, when, where's and why's
Gives you the 4-1-1 doesn't tell a lie
Let's you know if your ahead or behind
Keeps worries from your mind
Free from money binds
In, out, up, down no spinning round and round
That's what a budgets all about

Chorus

Let's not debate
Let's talk straight
A budget backs you up
Same as a measuring cup
Keeps you out of quick sand
On the road to the promise land
Gives you the time and date
Of everything you spend, everything you planned
It's just a chart
That let's you know how your money flows
Where your money goes
You'll stay out of the hole so you stay in control
So you have plenty of money to rock an roll

Chorus

If only everyone listened to this furry young man! Now to keep his words alive, we'll be giving away 3 Celebrate Savings! CDs. It contains 15 songs from a variety of genres of music (pop, gospel, rock, rap) that promote smart money management, choice making, and leadership. The It's a Habit group was also kind enough to add in 3 packages of "Sammy Sayings" stickers too!

To win one of the CD/Sticker packs:

- Drop a comment sharing a tip on how to teach children about money!
- OR/and respond to any of my newsletter emails w/ your tip! (you can sign up here if you want the extra chance.)

I'll be giving away 2 CD packages here, and 1 to a newsletter subscriber. And instead of using Random.org this time, I'm going to hand select them myself :) So the most clever/interesting/fun tips will get you closer to winning! Good luck! And thanks again to the Its A Habit company for donating them.

*Contest ends this Saturday, 1/30, @ midnight. Winners will be posted back on THIS post*
*Open to only U.S. Residents, sorry!*
---------------
WINNERS --> Sal & Becky CC - Congrats guys! Stay tuned for more giveaways later :)

Labels: awesomely awesome, budgets, giveaways, kids finance

The whole point of budgeting, besides sharpening your math skills & getting an A+ from yours truly, is to figure out how much "extra" you're playing with every month. When all your bills are paid, how much do you have left over? Or an even better question to ask yourself - is there *anything*?

As crazy as it sounds, your boy J never cared about budgets until a couple of years ago. Or even managing his own money for that matter. In fact, if you were to ask me back then I would have told you I was The Man when it came to this stuff! Which was a) hilarious considering I was living paycheck to paycheck, and b) scary since I didn't even know how much I was spending every month! And if a financial catastrophe hit? Hah! I would have sheepishly ran right to the Bank of Mom & Dad ;)

You see, paying your bills on time and having enough to get by is fine if you want an average life, but if you're looking for something MORE - something that you can hold onto and build on over time - then "average" isn't good enough. You've got to dig in and find where you're leaking money! Where you can save more here, and chop off some there. And the motivation you'll need to see it all clearly is that number at the very end - the totals that shows you whether you've got $XXX left over or $XXX more in debt. THOSE are the numbers to focus on. Breaking even at $0.00 is still living paycheck to paycheck. What you really need to be focusing on is getting those numbers into the positives! The more you continue to make that happen, the closer you'll get to retirement. Or your dream house/boat/car/million dollar nest egg, etc.

For me, those totals were in bright red. Every paycheck I received, no matter how many raises I got or new careers I tried out, I was losing money. It wasn't enough to notice at first ($50 here, $90 there) but eventually it would have caught up and slapped me silly. How the hell could I be financially free if I never SAVED anything?! It's just not possible. If you really want to be financially successful, you've gotta be bringing in more than you're letting out. Plain and simple.

And the budget, as boring as you may think it is, will point you in the right direction. What a lot of people don't get is that it does more than just show you how much your life sucks - it shows you how it could be BETTER. It's the whole "ya gotta see the bad so you can see the good" kinda thing. The "knowing is half the battle" G.I. Joe type stuff ;) Even if you only follow a budget for a month or two! You will learn more about your spending habits in those two months than you will reading this blog or any other books out there on the subject. And you know why? Because we're all different. We all have our own way of living, our own way of spending, and our own plans for retirement.

Whether you choose to budget or not though, just find out how much you're GAINING every month, or how much you're LOSING every month. These numbers are the keys to your success. And until you can determine them, you'll have a helluva time reaching those dream-like goals of yours. Much better to work 'em out now than later, I say.

--------------
PS: And if you are looking for a budget to start on, try out the one I use, or any others from the list of great budget templates/spreadsheets I've collected over time. Some are kinda purrty ;)

Labels: budgets, money management, saving

I read an interesting article in USAA Mag recently, "Budgets Are The New Black," and I thought it did a great job of breaking down budgets by percentages (plus, what a killer headline!).

It was written by famed money guru & best-selling author Jean Chatzky, and among other things pimped out an excellent graph of where all our money should be going. Or, at least where we should strive for it to go! You see a lot of recommended graphs & lists out there (which are pretty much the same), but this one really stood out. And not just because of the pretty pictures either ;) If you're looking for a great benchmark, this could be the one for you.

According to Chatzky, our NET income should break down like this:

• Housing: 35% This includes not just your rent or mortgage, but utilities, maintenance, taxes and insurance.
• Transportation: 15%. Again, not just your car loan, but the money to pay for gas, parking and upkeep, as well as any taxis or public transportation.
• Other debt repayment: 15% Not your mortgage or car loan, but student loans, credit cards or other debts.
• Savings: 10% Non-negotiable (includes retirement contributions)
• Life: 25% This is everything else. Your clothing, travel, health care, food, fun.

Pretty simple (and safe) stuff. By following these guidelines you're pretty much guaranteed to live a more financially secure life. And, there's only one other rule she adds here: Borrowing is allowed, but NOT from savings. You can take money from one bucket to use in another (say, for paying mortgages that are higher than the average because of where you live), but you've got to leave savings alone. I REALLY like that idea. Imagine if you ALWAYS saved 10% of your income no matter what? We'd be sitting a lot more prettier, that's for sure. So if you haven't started already, get to saving buster!

And here's how J. Money's NET income breaks down:

By the way, this isn't necessarily a recommendation of mine, just the way it is right now. Also keep in mind it's pretty rough as I had to single out my own portion of the money & bills from the Mrs' since we have them all combined (you could see our breakdown from Jan, '09 here though). Being the curious cat I am, I really just wanted to see how I'd compare alone going by the same guidelines above.

• Housing: 42% ($1900) - Washington D.C. costs substantially more than the country's average, but I'd still like this number to drop more (more than the 37% in our combined breakdown too). It's the one area of my financial life that really screws with me.
  
• Transportation: 9% ($400) - Most of this is due to train/metro costs since I barely drive, but it does include things like insurance and gas and all. Gotta love zero car payments though!
• Other debt repayment: 0% ($0) - I have no more consumer debt, leaving me with a plethora of extra money here :)
• Savings: 29% ($1,300) - Since the mortgages are "all" we have left, on top of paying less in transportation, there's a lot left over to be saved! Of course, I could be using this money to aggressively pay them down and all too, but instead I'm squirreling it away until this economy (and my job) becomes safer. Since it's kept pretty liquid, I could always apply it against the mortgages at any time anyways.
• Life: 20% ($900) - Not too bad in the % game here, but it could def. use some work. I'd say at least $200 of this goes to stuff I can't even account for, but I do like having this cushion of "not worrying" here. I can't be hardcore with *every* dollar I bring in, I'd go crazy!

I think it's great to compare your finances to a chart like Jean's every now and then. Not only does it put things in perspective (on top of it being fun running the numbers if you're a nerd like me!) , but it helps give you the confidence to keep working towards your goals. Or, at the very least, highlight some problem areas to work on!

Not everyone's situations are the same, but it's important to have guidelines to measure up to. And if you think Jean's breakdown purely sucks, then create your own! Just keep working on it and be sure to check back every so often to track your progress (I try for every 6 months).

So, do you know how YOUR income get distributed? And if so, are you happy with it?

Labels: budgets, money management, tools and resources

I like random questions like this because it gets you to stop and think about your spending habits. It's also fun to see how you compare to your peers :)

I know some who spend $300+ a month, while others have gone an entire YEAR (or three) without wearing anything new. I seriously don't know how they do it. Blogger Mapgirl just just calculated her amounts and she's only spent $373.98 this year! Incredible. I know we all have different shopping goals and all, but she's a GIRL! How could she beat me? haha...

I don't consider myself a hardcore shopper or anything, but I've def. spent more than $370 for the year. I don't have the patience to sort through all my c/c statements and add them all up, but if I had to guess I'd say I've handed over at least $600 this year. And compared to previous years of $1,000-$2,000, I've surely come a long way.

I have a shopping budget of $100 every month, and about $75 of it is set aside for clothes and accessories (man jewelry and all). And to be honest, I really haven't had the desire to go out and really look for stuff since I gave shopping up last year. The only times I end up looking around is if I have time to kill at the mall or I'm perusing some hot sales at Express or TJ Maxx or somewhere. And even then I usually only buy t-shirts since I wear them to work everyday with a pair of jeans. Luckily, spending $10 or $15 here and there will hardly get me into trouble. It's when I start looking for jeans or shoes that I end up dropping more than I'd like.

Since I budget everything though (in categories - "shopping", "food", "mortgages") I always know roughly what I'm spending. And all the money saved UNDER budget makes for some great motivation :) Plus, since any extra is sent directly to my savings account, I can look forward to spending it on something really important down the line.

Are you happy with the amounts you've been spending on clothes?

Labels: budgets, money management, shopping, where our money goes

I got a pretty impressive email the other day, and I'm hoping it inspires you!

It comes from a reader here at Budgetsaresexy (we'll call him Smart Budgeter), and he does a wonderful job at summing up a few points that we often don't hear about - or at least in this way. And what's even more interesting is that he uses & reloads GIFT CARDS to work it all out! Hah! Whatever work...Check it out:

J - I am budget crazy! Have been on a solid budget for about 2 years now. In the beginning, the hardest part was figuring out where the leaks in our spending was. For us it was grocery/and loose spending at the supercenter. Now we purchase/reload gift cards at the start of every paycheck cycle. We prepare a 2 week food menu and shop all at once. What ever balance is left on the gift cards is spent on non-need items like new towels, or treats (toys) for the kids. This tactic has made the biggest impact on our ability to stay disciplined to our budget and I suggest it to everyone I know. Take care - Smart Budgeter

If you haven't found them already, there are at least 3 great points to take from this:

Find out where your spending leaks are.

The only real way to do this is to track your spending for a month or two and see where it's all going (I know, it sucks, but you only have to do it once!) When you find it, you can then work on improving it and feeling good about it all. When I did this I learned that I was spending $300-$400 a month on clothes, electronics, $40 bottles of water, and all sorts of random stuff that I could care less about. That may be higher or lower than what you spend, but for me it was horrible and I wanted to change it.

Do something about it!

Luckily, the only thing I had to do in order to quit shopping was to STOP going into stores ;) Since I don't shop much online, that pretty much cut out a good 50-75% of it (once I actively made an effort to not "shop for fun"). When I do shop now though, I'm always cognizant of the amounts I'm willing to spend in order to be happy with everything (roughly $100/mo) Sometimes I stick with it, and others I splurge - but at least it's a conscious decision I'm making now.

Reward yourself and allow "extras" every now and then

For Smart Budgeter, it's all about treating his kids or picking up things he'd LIKE to have, but that he doesn't NEED. For me, it's a tiny allowance for lottery tickets, coffee, and an occasional new outfit (yes, I'm sorta like a girl in that way). As long as it makes YOU happy, it really doesn't matter what it is - just that you allow yourself to be human. Allowances like this keeps you motivated and sane, so be sure to include them :) Now get out there and start plugging those leaks!

Labels: advice, budgets, money management, reader mail

These are the best free budget templates around - mostly from fellow personal finance bloggers! How awesome is that? ;) I have to put mine at the top, of course, but ANY of these have the potential of working well nicely.

Remember, none of these budgets are perfect, but you can tweak & edit and use the one that's the most perfect for YOU. I change mine up every once in a while - getting rid of the parts that don't make sense any more, and adding in those which do - but the important part is FIRST choosing a workable template. So hopefully one of these works.

Best Free Budget Templates:

Here are the best free budget templates I've found so far! If you come across any others you think are worth adding, drop me a note. I'm always looking for some more great ones ;)

"Financial Snapshot & Budget" @ Budgets Are Sexy Google Doc | Excel | Example (filled in) | More details A colorful and easy way to track your budget and overall Financial Snapshot! Room to budget per paycheck, detail your net worth (if you want), credit card balances, savings funds, total income, and an extra budget just in case :)

"4 Step Budget Template" @ Life After College Google Doc | More details Most budgets are too cumbersome to be useful (in my humble opinion). Check-out this handy four-step budget: After filling in income, must-have expenses and nice-to-have expenses, you'll get a "monthly allowance" for you to spend on discretionary items as you'd like, with the peace of mind of knowing that your main expenses are taken care of.

"Personal Monthly Budget" @ My Money Shrugged Google Doc | Net Worth Google Doc | More details This budget spread sheet works because it allows you to put in projected and actual income and cost and then shows you the difference. It is a great way to be able to compare each category or individual areas. This budget is also broken up into different categories based on major areas of your budget - housing, transportation, insurance, food, savings, etc.

"2010 Budget Spreadsheet" @ Finance for a Freelance Life Excel | Blog Income | Freelance Income | More details This budget spreadsheet is very basic and is meant to be adapted to any person's unique situation. It's easy to add or delete lines and to change the names of categories to better fit your life. For convenience in tracking specific purchases throughout the month, it has a spending log as the first page. This way, you can not only see how much you spent in each category at the end of the month, you can track how purchases added up.

"E.O.D. Deluxe Budget 2.0" @ Enemy of Debt Excel | More details EOD Deluxe Budget 2.0 is a comprehensive budget spreadsheet including a zero-based budget, an allocated spending worksheet, a checking account ledger, a savings allocation worksheet, as well as a lump sum payment schedule.

"Monthly Report Template" @ Fiscal Fizzle Microsoft Word | More details A monthly financial report presented to your family or significant other keeps everyone accountable, aware, focused on goals and progress, and gives you the opportunity to celebrate success. This short but powerful financial template includes areas for monthly cash flow review, net worth tracking, credit score monitoring, goal tracking, and a notes area to explain unusual financial activity for the month or upcoming months. While it's easy to read and review with everyone out of "the box," remember to customize this template for your own system!

"Free Budget Spreadsheet" @ Money Under 30 Excel | Really Simple Budget | More details Using the spreadsheet is easy. Enter the monthly amounts in the appropriate categories, estimating any value that fluctuates from month-to-month. Once you've entered the values, the spreadsheet will tell you how much you will have left at the end of the month to save or put towards debt. It will also tell you how close you are to an ideal income allocation (such allocation models are frequently used by banks and other lenders for determining your financial balance).

"How Much Debt Costs You" @ Debt Free Adventure Google Doc | More details Complete with CHART. Figure out how much your debt costs you each month. Specifically, how much of your loan payments are allocated toward interest (paying for the debt) and how much toward principal (paying the debt down.) *Included are 3 sheets: Data, Chart, and Print*

Other Great Templates & Spreadsheets:

Sometimes less options are better, but I didn't want to leave you hangin' if none of those above options did the trick for ya. Keep in mind that all these spreadsheets & templates are customizable, but see if you like any of these better: (I'm listing them out or else this page would go on forever ;))

• USAA: Budget Worksheet (.pdf)
• Gail Vaz-Oxlade: Wedding Budget Worksheet (html)
• Gail Vaz-Oxlade: Gail's Interactive Budget Worksheet (excel)
• 27 and Frugal: Beginner's Budget (google doc)
  
• My Money Blog: Within Your Means (excel - created by leisure guy)
• My Money Blog: Spreadsheet #2 (excel - by Neil Rothma)
• My Money Blog: Spreadsheet #4 (excel)
• Pear Budget: Original Spreadsheet (excel)
• Punch Debt In The Face: Monthly Budget (google doc)
• Rate State Blog: Zero Based Budgeting Tool (excel - based on Dave Ramsey's "zero based budget")

Aggregate Template Sites:

And if you STILL can't find anything good...or you're just addicted:

• Google Docs: Handful of Budget Templates
• Microsoft Online: Top 25 rated templates! (excel - out of 100+)

Best Online Budgeting Sites:

And now, we've got the places online where you can budget & track all your financials instead of manually doing them yourselves. Well, you'll still have to manually keep up with this stuff online, but most of these places make it super easy for you - my favorites being Mint & Yodlee (although I personally still use Google Docs). The best online budgeting sites around:

• Yodlee MoneyCenter (free)
• Budget Pulse (free)
• Mint (free)
• Geezeo (free)
• Wesabe (free)
• Pear Budget (online version: free for 30 days, then $3/mo.)
• You Need A Budget (free for 15 days, and then 1 time cost of $49.95?)

Labels: budgets, money management, tools and resources

If there's one thing I like more than beer and sex (just being honest!), it's clever budgeting. And just like there's all sorts of ways to have a good time, there are all sorts of ways to manage your cash flow.

Personally, I use google docs to stay on top of my financial snapshot. I can budget from it, track my savings goals, my paycheck breakdowns, and most importantly my net worth (so I know overall how I'm doing that month). It's a little too bright and all over the place for some people, but it's perfect for me. You can download the budget template in excel if you wanna check it out.

Another way you can do it is via Word, shown below (click image to download the word .doc). It's clean, simple, and to the point. And most of all, it WORKS for the reader who emailed it over to me. As you can see, he has listed out all his bills, deadlines, savings, and retirement contributions - along with a few goals and "leftover amounts". Basically, his financial snapshot:


These are just 2 of the 10,934 ways you can do it. You've also got places online like Mint.com, YouNeedABudget.com, or even going old school and hitting up the envelope method! It doesn't really matter what you use, so long as you USE it and get something out of it. If it keeps your finances in check so you can frolic around with the more exciting parts of your life, you're doing things right.

Labels: budgets, money management

1 year, 3 months, and 500 posts later, this little blog is still around baby! Never in my life have I continued a hobby for so long ;)

I must give you all MAD LOVE for coming out and supporting this site each and every day, you guys are so wonderfull! Without you I'd just be another mumbling fool on the internet - so THANK YOU.

While this blog has transformed into an umbrella of finance-related topics, it was my good friend the budget who got the party started. So it's only fitting that I drop some knowledge about them to commemorate this most beautiful day ;) An excerpt from my feature in The Art Of Manliness blog:

"Maintaining a budget is key in becoming financially studly. If you know where your money is coming and going, you'll know your strengths & limitations. And if you know your strengths & limitations, you can outwit your opponent at any time! Plus, you'll be able to make quick decisions on the spot which girls love. And you know what else girls love? Confidence. And this,my friend, is what the budget gives you."

Yup, I still owe it all to the budget ;) That booger's gotten me to stay on track and allowed me to keep doing my financial thing! And so has a lot of other bloggers around town - their advice and point of views have created a wonderful learning environment for all, and I'm proud to serve on the same internets w/ them (you can find my favorites in the blogroll).

So with that, I leave you with some nifty little stats from these 500 posts, along with this week's financial round up & carnivals. God bless you all!

Current subscribers: 812
Twitter subscribers: 1,562
Total EVER page views: 234,145
Total EVER visitors: 137,460
Number of times I check these stats on a daily basis: 15 (down from 792)

I also gotta give due credit to all those bloggers who continue to send over some great traffic! Here are the TOP 10 all-time refferers (minus google, stumbleupon, etc) along w/ previous rankings:

1. My Money Blog (1)
2. Give Me Back My Five Bucks (2)
3. Bargain Briana (6)
4. Fabulous Financials (-)
5. MSN Smart Spending (3)
6. Clever Dude (4)
7. Chicky Finance (5) *no longer blogging :(
8. Single Guy Money (8)
9. Dinks Finance (7)
10. Always The Planner (-)

And Now, My Favorite Reads O' The Week:

1. Un-Broke: What You Need To Know About Money - Don't forget, the ABC "Money 101" special airs TONIGHT from 9-10pm! Check the link above for awesome-a$$ sneak peaks - Christian Slater, Will Smith, Seth Green, and more. Can't wait.
2. How To Spend Like A Frugal Millionaire - This piece from Yahoo Finance is all over the pf blogosphere, and for good reason. The author interviews 70 millionaires for the inside scoop.
3. Are You Doing Bad Things With Your Money? - Haha...that title says it all, brilliant.
4. 10 Revealing Q&A's By John Chow & Shoemoney - 2 online money-making masters share their answers side by side. Pretty interesting stuff.
5. "Amazing Grace" video - A heartwarming 32 sec. commercial from Salvation Army :)

And lastly, the Carnivals O' The Week:

1. Carnival of Personal Finance #206 - "Memorial Day Stars & Stripes" by Greener Pastures.
2. Festival of Frugality #179 - "Memorial Day" ed. hosted by Suburban Dollar.
3. Carnival of Debt Reduction #139 - "New Credit Card Rules" ed. hosted by PT Money.
4. Carnival of Money Stories - "A Road Map to Money Health" hosted by WalletPop.
5. Money Hacks Carnival #66 - "Family Summer Vacation" ed. by Passive Family Income.
6. Carnival of Pecuniary Delights #9 - "Organic Gardening" ed. by Passive Family Income.
7. Carnival of 20 Something Finances - "May 25th" ed. hosted by How I Save Money.

Thanks again to each and every one of you!!! May we have another 500 posts to look forward to! But for now, it's time to go celebrate Mrs. Budgetsaresexy and I's 1 year anniversary together ;) For anyone still around from those days, here was my wedding day post. haha....

Now if you'll excuse me, I have some babies to make relaxing to do.

Labels: awesomely awesome, blogging, budgets, link lovin, thank you, updates

Big ups to my boy over at Your Money Relationship for landing this killer interview! He had a chance to hit up famed financial planner Deena Katz and pick her brain on a few things. If you don't know who she is (don't worry, I didn't either) she's pretty much considered one of the most influential planners out there. And she's also written a ton of books, making her pretty bad a$$.

Anyways, YMR allowed me to ask her a question and I couldn't help but give her the classic. Here's how it went down....I wonder what four letter word she was thinking about? ;)

YMR Reader (me): Do you think budgets are a sexy thing right now?

Deena: I have always felt that budgets are a four-letter word...but "sexy" is not the word I think of. The nature of many human beings is not to feel the constraints of budget, because you fight against them, the same way you fight against your parents when you are 15. I believe in "trade-off" spending. The first thing you need to know is how much does it cost you to live - basics, like rent, utilities, etc. Then you look at the variables - eating out vs. eating in, for example. Then you can say, "I'd like to buy a new car, so if I eat in and shave off some other expenses, I can us that money to buy the car." With budgets you are managing money, but with trade off spending you are managing goals.

Labels: budgets, interview, money management

A lot of us bloggers rave about being so frugal and cutting corners all the time, but there comes a time when enough is enough. Just like dieting, you can't ALWAYS be frugal'ing your way around town. Once overboard, you'll be sure to jump back in the safety boat soon enough.

Today's post was inspired by one of my new favorite bloggers, Green I$ The New Black, who posited this very same question: How Frugal is TOO Frugal? And what a most excellent question it is. Like everything we do, it's all about keeping a good balance. It may not be the easiest thing to do (people usually like to flutter to one extreme or the other), but it's certainly the smart way to go.

And I'll be the first one to admit I can def. get hardcore! Some days I can't find the heart to spend a dime, while others i'm doling it out to all whom ask ;) Luckily, I can get away with it most of the time because of how my budget is set up. Building in categories for "random stuff" & using credit cards def. help out. By the time all is said and done each month, it all usually evens out pretty well. It's much better to allow room to spend freely as necessary, but at the same time tightening up in other areas.

So I guess my answer of what's "too frugal" would be when you hold back on buying or doing the things you really enjoy just to save a few bucks. Sure it's great for the wallet, but guess what - we have a life! No point in hoarding it all if we're never gonna spend it ;) Then again, I may not be the best example these days...

Labels: budgets, frugality, life, money management

Are you a fan of the "envelope method"? If you don't know what it is, it's basically a system where you take chunks from your paycheck every pay period and plop a certain amount of money into a designated "envelope".

Then, when it's time to buy something - groceries, clothes, whatever - you pull this $ from the corresponding pouch and you're good to go.

I actually haven't tried this myself in all honesty, but I know a lot of bloggers and friends that swear by it. In theory it works out well because you can only spend what's there. On the other hand you'd have to convert your checks into cash every time, or visit the bank since ATM's only pump out a certain amount per day. Not the hardest thing to do (I've enjoyed cashing it out before! REALLY makes you realize how much you have), but it's not as easy for someone like me to do every 2 weeks. Again though, if it *works* then keep on doing your thang.

Most people work it out with plain white envelopes, but I say hook yourself up with some sexy a$$ creations from my girl over at Chicky Finance! She just came out with these hand-made green & white envelopes over on Etsy (pictured above) and they're labeled and everything - Grocery, Clothing, Entertainment, and Health/Beauty. She's selling them for $20 with no shipping costs, and will even custom make other categories upon request. Totally awesome if you're looking to jazz it up a bit ;)

Of course, there are other ways to budget this way too. Instead of physical envelopes, you can go electronic and set up "sub-accounts" with ING Direct to basically do the same thing (although it might be better for "saving funds" like for traveling, auto maintenance, emergency funds, etc, but not sure). There's a great post from Get Rich Slowly that breaks it down pretty nicely, and if I weren't so hardcore for USAA I'd totally hook it up. There's also downloadable software you can find online like MoneyFolders.com which promotes features like "printable wallets" or "purse balance cards" to help gain control of your money.

Or you could even use your credit card for this stuff, and at the end of the month pay it off in full and go over what you spent for which category. This one has its fallbacks like overspending & not remembering/being able to pay it off in full, but it's great for those who want super simplicity - aka me :) Not sure if it falls directly under the "envelope system" like the others, but it's still a cool budgeting tool.

In other words there are a TON of ways to budget - and all are sexy if they WORK. Unlike math class, there are not right or wrong answers here. Only those which help save you money, and those which help take it away. I'm all about the first one ;)

Labels: budgets

"I'm bringing budgets back (yup)! Them other non-budgeters don't know how to act (yup!)" Haha...right Mr. Timberlake? ;) What, you don't think that's the same as bringing sexy back? Well check the calculation my friends:

Budgets = Confidence = Sexy!

Aww yeahh! Okay, so maybe YOU wouldn't swap it in, but this frugal ba$tard sure will. After all, it's what got me started blogging! Well, that and buying a house and all, but it definitely kept me on track. And to this day I've been a good little boy and continued to stick with it month after month. I mean, you *have to* know where all your $exy money goes, right?

What I haven't been doing, though, was keeping it updated here on the blog for all to see. So going forward my budget will be updated the first week of every month! And, as always, you're more than welcome to borrow/steal any part of it:
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• Download via Excel: Budget Template
• Check out in Google Docs: Budget (filled in)

I tend to be budget happy up in here, so it has plenty of room to track a few different budgets - like one for your paychecks, "house", credit cards, etc. I also like being able to see my net worth and any other cash funds I may have laying around, so that's also included. The whole spreadsheet is really like a "financial snapshot" if you will. It certainly won't satisfy everyone's needs, but it's a great starting place for anyone who's ready to get down and dirty.


*Updated: 3-1-10: My current paychecks are bit wonky right now as I'm contributing 90% of all my paychecks to 401(k)! Yes it's crazy, but yes I want to become a millionaire faster ;) So you will see a lot of negatives here until I max out, and in the mean time will be pulling cash from my side savings account to "pay myself."

Here's the paychecks portion above. It took me a while to figure out what works for me and what doesn't, but keeping it updated and refreshed every month helps to nail it all down. You can find the rest of the spreadsheet here, but this is the most important portion of it in my opinion...If you can come out in the positive every 2 weeks, you're awesome as hell! Here's the average breakdown of what's included in these "paycheck budgets" (I keep it avg. as my paycheck usually fluctuates a bit):

Paycheck #1 ($2,249.18):

• Mortgage $$ ($848.24) - 1/2 of my portion of our mortgages. We have a 30-year fixed, along w/ a maxed out HELOC as a 2nd mortgage.
• House $$ ($300) - We tracked and averaged our other house expenses (utilities, groceries, etc) over a good 4-5 months, and eventually came up with our own "house budget". This $300 covers 1/2 my portion, and the Mrs. puts in the rest (you can see the breakdown in the spreadsheet).
• J's Credit Card ($638) - Like the house stuff, I tracked everything i spent over a handful of months (clothes, gifts, work lunches) and then averaged them together to come up with my own "c/c budget" that gets paid off in full each month. It doesn't work for everyone, but I freakin' love it! I get mad cash back rewards, and it's super easy to manage.
• Cash Withdrawal ($100) - I *have to* have cash on hand all the time :)

Paycheck #2 ($2,249.18):

• Mortgage $$ (848.24) - the other 1/2 of my mortgage portion.
• House $$ ($300) - the other 1/2 I contribute to our "house budget".
• Insurance: All ($143.42) - homeowners, auto, computer, and bling insurance for the Mrs. and I.
• Insurance: Life ($55.56) - life insurance for both the Mrs. and I.
• Cash Withdrawal ($100) - to cover the next 2 weeks ;)

In a perfect world, I'd like to ALWAYS have my expenses budgeted below or at least even to what I bring in every 2 weeks (but sometimes I go over in one paycheck, and over in another). Luckily I've been able to come out in the positives each month, but when I don't I just pull the difference from my savings account and throw it into my checking to make up for it....not the worst thing in the world to do, since that's why I have that padding there to begin with, but it's still a dirty habit that I should get out of.

So there you have it - J's new & improved 2010 budget :) Again, feel free to steal any part of it! It may look a bit confusing at first, but it's totally cool once you get the hang of it. It's all a matter of what works for YOU though, so if you already have a great method down pact, then by all means keep rockin' it out!


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PS: Be sure to check out my list of Best Free Budget Templates too, you might find something that works a little better for you there. If you don't, you must really despise 'em ;)

Labels: budgets, money management, paychecks, tools and resources, updates

Maybe now that i have a budget set up i'll actually start BUYING the presents :) Seriously, i haven't bought a single thing yet...i don't know if it's because i'm lazy (the most likely), uninterested, or just plain tired right now, but i'm hoping to shake it off soon...

The good news is that i was able to muster up enough energy last night to put together a decent list of ideas! So i'm thinkin' this weekend will be the start, and possible end, of my Xmas shopping this year. Well, at least for everyone but the Mrs...i always have to put a bit more thought into hers due to the whole husband stuff and all ;)

I've also decided to keep being generous this year, despite the world crumbling around us. I still can't afford a crazy amount of gifts - i'm actually hoping to get a bonus this year to help pay for it all! - but to me, it's a huge chunk of change. Here's what we got:

As you can see, $50 is the sweet spot around here...it used to be $20 but i find that it takes wayyyy more work to get some goodies under that range, and usually i can only find 1 good thing at that price. With $50, i can get a few things and usually have enough to make stuff as well which i like :)

And the "random" section comes in nicely so i don't have to go through one of those, "Oh $hit, i have to spend MORE money now cuz i forgot that thing/person!" I find budgeting it in keeps me calm, and then even happier if i don't use it!

So where do i fit in with the average person this holiday season? Well, luckily my girl Erin over at TrueCredit.com sent me some interesting stats they conducted with Zogby International about holiday spending this year. Check it out (with commentary):

• The majority of U.S. respondents (54%) plan to spend less this year than they did last year. hum...def. not me, these #'s are almost exactly the same as last year.
• An overwhelming majority (73.3%) will use cash and savings to finance their holiday purchases. not me again! still on the ol' credit card gameplan...although technically i'll be paying it off in cash next month.
• Most people (44%) are controlling their overall spending by shelling out less money per person this season. yeah, that makes sense...def. one way of doing it
• Nearly one-third of respondents (32%) will buy items on sale. That's it??? that surprises me. every single thing i'll buy will be on sale, believe you me!
• 2 in 10 people will “set and adhere to an overall spending limit”. That's it??? maybe they're just talking about those who will "adhere" to it ;)

Alrighty, well that about covers it. Now let's just hope i kick it into high gear and go make something of myself, eh? Good luck out there everybody, you can do it too!!!

Labels: budgets, gifting, shopping

It's reader mail time again, and it's all about Credit Cards! You all know i love me some emails (and comments, twitterings, etc) so don't be a stranger, my virtual door is always open :) And if the stars align, i'll sometimes even blog about it! oooohhhh, ahhhhhh...

So yeah, today's post is brought to you by a fellow Budgets are Sexy reader who wants some advice on the old "Pay everything with your credit card" idea. And guess what? That's one of my specialties!

But before we start, you know i have to throw in a quick disclaimer here: Using your credit card like this is NOT for everyone, esp. those who aren't good at managing their money. If you've got that on lock, then continue reading my friend ;)

Here's what my dear reader asks:

"My question is this- I know folks like you swear by using your credit card for daily things, bills, etc and then paying it off each month. (by the way, neither myself or my bf have ANY credit card balances since we decided to buy our house this past year...) Anyways, I want to try this with this rewards card, but I\'m not sure how to go about it. I have online bill pay set up through my credit union for most household/regular bills and just worry about tripping up and getting screwed if I try to use this cc like you say you do. Help? Can you do a post about this, perhaps?"

Your wish is my command young lady ;) People use their credit card this way for a number of reasons, but the two main ones for ME are A) To help me budget & track my expenses easier, and B) To rack up a crazy amount of rewards! Plus, you'll actually find yourself spending LESS since you see the amounts build week after week. Here are the 4 steps for Operation Credit Card:

1. Create a Credit Card Budget!
Since you wont' be using debit cards, checks, or cash all that much now, you'll have to make sure to have enough to pay off your c/c balance each month. VERY IMPORTANTE amigos. The first time i did it i just guestimated and came out $200 short. Not. Fun. Here's a look into my own credit card budget to help get you started. Remember, it doesn't have to be all that complicated...

2. Find a Credit Card w/ Cool Benefits.
Everyone has their own soft spot - free mileage, gas rewards, cash back, there's a whole mess of them out there. Once you have a favorite, do a little research and check around for the best cards that focus on it. Pf Blogs, financial magazines, they're all great for finding them. I use USAA's Platinum Rewards card to get cash back, but you have to be affiliated w/ the military to get it. Here's a few others i found in Money Mag the other month, and also some of MyMoneyBlog's favorites to help get ya started.

3. Now, Use the Credit Card for Everything You Possibly can.
Cell phone bills, utilities, car insurance, life insurance, lunches, presents, tv/internet/phone, etc. Whenever it's time to spend money, try using the credit card first. Unfortunately (or fortunately?) you can't pay off ALL things like mortgages or car payments with it (well, you *can* but you'd have to use the cash xfer option which you NEVER want to do), but you can get pretty close.

4. Pay it off IN FULL Each Month!
Seriously, don't forget this - it's the most important part :) It may take a few months to get used to 100%, but it'll be second nature soon after. It can actually be pretty fun too - each month you get to see how you compare to the previous month! woohoo! haha....

There's a couple ways to pay here and stay out of trouble. I prefer using my bank's online bill pay over automatic anything simply cuz i'm scared $hitless of overdrafting my checking account accidently. If you manually pay it each month, you're more likely to stay on top of it! And if you're worried about forgetting, well, that's what we have Gmail/Outlook for! You can easily set up customized reminders and calendar events to help remind you every month. Plus, don't forget you'll still get the monthly credit card statements in the mail (or emailed) too.

And there you have it - the 4 steps to get in on Operation Credit Card! Again, it's not for everyone, but it sure is for Rock Stars :) It's all about maximizing the benefits baby!

Labels: advice, budgets, credit cards, reader mail

What a gem i found this morning!!! 'Budgets' AND 'sexy' in the same headline? Hell yeah! It reminds me of that famous collaboration between Justin Timberlake & I called - "I'm bringing budgets back!" haha...Oh man, today's gonna be AWESOME, I can feel it already! The actual article from The Express was pretty interesting too, but sadly i couldn't find it online. I did, however, find one that referenced the time when the Mayor of Berlin (Klaus Wowereit) was quoted as saying his city was "poor, but sexy"! It doesn't get better than that my friends.

Labels: budgets, randomness 3000

Yesssir, you got that straight. I can't remember for the life of me where i stumbled upon this link, but it's from 2006 and talks about this "extreme saver" who does just that - thinks of saving as just "another bill" to pay. Genius!

While i've never really thought of it like that, it's pretty much what i've been doing each check.

I have all these categories to xfer the money to every 2 weeks, and "savings" is one of them! Literally speaking, we put $100 into our House Savings account each month (it used to be $200, but we had to cut back since the Mrs. is now in grad school).

In general, however, i pump in much more than 10% into savings - mainly my 401k. i'm seriously in love w/ those things, just so damn easy to inject money! I throw 19% of my total paycheck in it every 2 weeks - Scary, huh? The amounts used to shock me, but it's been a good 2 years so i'm thankfully used to it by now. It sucks not having that extra few hundreds each check, but i know it'll be well worth it down the road!

The point is that it's all budgeted into "bills" really. The mortgage, the credit card, the utilities, the savings, the 401k, etc.

I really like this "way" of thinking, so it's totally going into my back pocket for the next time someone asks for advice ;) A nice and simple concept to get your mind right. You gotta like that.

Labels: budgets, money management, saving

It's not HOW MUCH you bring in, or how much you spend, but it's KNOWING where your money is!

And not where you *think* your money is, but where it actually is ;) We're talking about all monthly expenses, savings, retirement funds, and even all that cash stored in that dusty box you've probably forgotten about.

It's worth it even if you just do it once! I seriously can't emphasize that any more - when you know where your money is going, you will feel more confident. plain and simple. I can't promise you that you'll be happy with the results (although you may also surprise yourself), but at least you know exactly where your paycheck is headed.

And it's not that hard to do, really. A bit time consuming for sure, but easy to do. For your accounts, all you have to do is log in and copy and paste the amounts into a spreadsheet - you can create your own, use mine, yodlee, mint, etc - whichever increases your odds of sticking to it.

And then for the "tracking" part, you can either:

• Tally up all your receipts at the end of the month - via the shoebox method.
• Export your checking transactions for the month.
• or even Using your credit card statements! This one isn't for everyone (you know who you are), but if you applied all payments through the card, you'd have a nice breakdown all in one spot to use. Def. not for everyone.

Once you HAVE all of this data, then it's just a matter of plopping it next to last month's data and seeing the differences. Again, go w/ the most convenient and easiest route for you (I use the credit card route). What you do from that point forward is up to you.

I read a great post over on Vilkri's blog that summed it up pretty nicely, giving a few of us bloggers a pat on the back. But besides the awesome link love and feelgood-ness (which of course is nice), it was a good reminder that I've come a long way since diving into all of this stuff. And i have to admit - it feels pretty f'ing good!

It also reminded me of another would you rather-like scenario a co-worker and i were talking about yesterday. He asked me if i'd want to know the whole truth on our start-up's financial situation if i had the chance? At first, i was like noooooooooooo way! Ignorance is bliss baby! But the more i thought about it last night (financially addicted much?), the more my answer changed to - "Yeah, lay it on me!".

While i'm sure there are plenty of things going on behind my back, i feel like getting the details would surely help me plan better! And not only personal things, but day-to-day management of my team and future meetings. It would probably be the shock of a lifetime (worst case, anyways), but it would inevitably wear off and i'd at least be "in the know" at that point.

But back to being financially confident - the easiest way to do this is by monitoring your expenses and creating a managable budget around it. It probably won't be fun at first, but after a while you won't even notice it. Hell, if you're anything like me you might even look FORWARD to it! haha...but don't count on it, i'm pretty addicted ;)

Labels: advice, budgets, money management

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Guest Post: Miranda Marquit writes for the AllBusiness Personal Finance Corner and Yielding Wealth, and believes in the sexy budget as well! Hope you likey, likey.

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One of the things I am asked regularly is this: "What's the first thing I need to do to get going with a budget?" I almost always answer with this: "Get your priorities straight." Before you can even think about budgeting, controlling your spending and/or digging yourself out of a debt-hole, you need to figure out what's important to you and plan accordingly.

Priorities: wants and needs

One of the first things you have to figure out is the difference between wants and needs. This is actually harder than it sounds for some people. For instance, if you have available, convenient and reliable public transportation, you do not, in fact, need to drive your car to work everyday (and this will allow you to save money on gas). And, while you may need to wear clothes, it is not necessary to buy expensive designer duds. The list goes on. Basically, though, needs can be broken down into these items:

1. Shelter (rent/mortgage, utility bills not including TV and Internet)
2. Food (not eating out)
3. Clothing
4. Transportation (if you have to commute to work)
5. Preparation for the future (emergency fund, retirement account)

Everything else falls into the category of "wants."

The first rule of priorities is that needs come before wants. When creating your budget, you need to make sure that there is enough money set aside to cover your obligations and your needs. After that, you should make sure there is money to make payments on debts and other obligations. (Note: You should never pay unsecured debt -- like credit cards -- before you make a mortgage payment. Always make sure your secured debt is taken care of first.) Then, if there is anything left over, it can be used for wants.

Priorities are important. Part of the reason we are in the mess we're in is due to the fact that we lost sight of our priorities at some point.

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J. Money's at a wedding, and will return tomorrow. He wishes you a very sexy day!

Labels: budgets, guest post

Today is a bit "blah" for me as one of our neighbors has unfort. passed away :( She was one of those people who always smiled and loved helping others.

So instead of being all mopey and sad this morning, I'd like to be positive and share a few helpful links with you today - something she would have been pleased with :)

One of the cool parts about running a blog is that you get asked a whooooole bunch of questions from your readers and fellow bloggers - I love it! But since i'm no expert in everything (or even some things. haha...), I tend to forward them to my favorite places out there. Hopefully you can find some goodies here!

19 FREE Personal Budgeting Spreadsheets
- Financial Ramblings

Woah, talk about hitting the jackpot! 19 sexy budgets? Total HOTNESS for sure. Everyone knows I think budgeting is one of the four best ways to get financially fit, so I give this link 4 thumbs up! (feet have thumbs, right?)

The trick about budgeting is finding what works for YOU, so having a large variety of methods own in one place def. helps finding one faster. Financial Ramblings even compares them in a simple chart to give you the broad picture of everything. Maybe you like one half of a particular budget, and bits and pieces of others? That works! Whatever style gets you going, and staying on top of it - the hardest part - is key. (You'll also notice my own personal spreadsheet was included in the mix - woohoo!)

Blog Consulting, Web Design, and More
- Mrs. Micah, Clever Dude, Blueprint for Prosperity

When it comes to Blog design/set up (esp. with Wordpress), I always recommend Mrs. Micah. Not only is she great at analyzing your site and giving recommendations, but she's FRIENDLY! And I don't know about you, but that goes a loooooooong way for me, especially when asking for help. The last thing you want is some D-head trying to push their nonsense your way. And if Mrs. Micah doesn't know exactly how to do something you're asking, that great part about her is that she'll research it and figure it out!

If direct contact isn't your style, check out one of these 2 articles. Just following a FEW of the tips listed here can make a huge difference. I recommend them to every blogger out there, even if you've been around for a bit. (I review them every cple months to make sure i'm on track):

Two favorite "blogging" articles:
- 50 tips for new personal finance bloggers - Clever Dude
- 25 steps to a wildly successful personal finance blog - Blueprint for Financial Prosperity

Labels: blogging, budgets, link lovin, tools and resources

Every now and then a friend or two will ask me for my best financial advice, and while I wished I could refer them to a single post of mine, unfortunately I never could....until today!

This post encapsulates my all-time favorite "words of wisdom", jotted down in one simple place.

There's a bazillian of things I'd love to share with everyone, but there are 4 main biggies I repeat over and over again - whether on this blog, or when talking to friends, family, or strangers. They aren't new, but they sure do work! And I follow each and every one of them personally, even if I do slip at times ;)

I truly believe that these will improve anyone's finances, regardless of age, occupation, or net worth. Your wallet will thank you, your peace of mind will thank you, and you'll find yourself feeling sexier than ever! So here they are - my all-time favorite pieces of advice:

1. Pump up your 401(k)

If your company offers it, jump in as hard and as fast as you can! Contribute AT LEAST as much as your employer matches. if they match 100% of 6% invested, invest 6%. If they match 25% of 3%, invest 3%. Whatever the case may be, their portion is FREE money baby! Aka 100% guaranteed profit before it even gets invested! And if you have the means to put even more in? Then you, my friend, qualify for the Bad A$$ of the year award ;)

Not only that, but Uncle Sam will hate you for it... at least for now (that's a good thing). The more you invest, the fewer taxes you pay out that year. Say your annual gross income is $50k. Well, if you don't put anything in at all, you pay taxes on that $50k. BUT, say you contribute $10k towards your 401(k) in that year, well now you're only taxed on $40k! (you pay the taxes later) So yeah it may suck initially "being out" of a little money each paycheck, but over time you'll get used to it and maybe even forget since it's all automated. Either way, those amounts pile up BIG time over the years, and you'll be thankful you jumped on this money train when you did!
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*if your company doesn't offer a 401(k), OR they don't match, consider picking up a Roth or Traditional IRA instead (or in addition to). There's a pretty cool breakdown of the differences and benefits here

2. Track your spending for 3 months

This is the one thing you can do to learn EXACTLY where your hard-earned money goes to. Think of it as an E-True Hollywood Story based on Your Financial Life - you think you know, but you have noooo idea! haha...okay, well maybe it's not that drastic, but you'd be amazed at the things you'd find if you actually sat down and sorted through it all. Even if you do it just one time, and one time only, it'll give you a better over all picture of your finances.

Once you know EXACTLY how much you spend, you can then figure out how to move forward - whether it's to remain on the same route you're currently taking, or move to a newer one. I went back through 3 months of checking and credit card statements to figure out my habits, and boy was i surprised! It wasn't so much in seeing the items purchased, as I remembered them all, but it was the grand total of the expenditures that hit me. I had a guestimated a budget of $500 for my credit card each month, but in reality i was spending between $800-$1200! Woops. I then created a more realistic budget ;)

3. Create an Emergency Fund

Simply for a great peace of mind! There's something to be said in having a pile of cash in your account for whatever it is you'll need it for. I really don't know what constitutes an emergency, exactly, but for me it's more of a stash to keep myself out of trouble ;) As for how much to put in there, I personally shoot for 3 months, but it really depends on what you're comfortable with. It can be 2, 3, even 6 months, whatever you feel would make you sleep better at night. Once you reach that point, you're all set! You can then go about using your money as you wish, knowing you have that safety net.

4. Pay off all Bad Debt

Get rid of it! Whether it's credit cards, outstanding loans to friends or family, or whatever - it's not great to have. This is much easier said than done, of course, but my goodness if it's not true. It effects everything from credit scores, mortgage rates, car loans, and even worst - your overall happiness :( What would you do if you had $0.00 in debt?! How insanely awesome would you feel! It's not gonna happen overnight, and it certainly won't be easy, but it's definitely imperative to work it all out. Whatever you need to get rid of it, just start.

And that's it! Those are my Top 4 all-time favorite pieces of advice I give out. Some are easier to follow than others, but they all work magic on your financial health!

Labels: 401k, advice, budgets, debt, emergency funds

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Guest Post: Pamela Grundy, writer for Personal Finance Analyst. Personal Finance Analyst is an online community of bloggers dedicated to taking the mystery out of money and helping you to live a happier, more successful life with the money you have. (sprinkled with a little humor!)

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Scented candles, fresh flowers, satin sheets, dark Belgium chocolate, imported Beaujolais, a crusty baguette, some warm Brie with almonds, and a budget session: Does it get any better than that?

OK, so maybe it does get better than that (especially the first year), but the point is,
Budgets are a lot sexier than most newlyweds realize.

In fact, I’d go so far as to say that if more young couples discovered the joy of budgets, the divorce rate would plummet by as much as 50%. It isn’t sex or politics that sinks committed relationships, its money: misunderstandings about money, lack of money, secrecy and shame over money, recklessness with money, money emergencies and disasters, and lack of agreement over what to do with money when there actually is some, and so on and so forth.

It's Preventable.
What is particularly sad about this fact is that it is so preventable. All you really need is (that’s right, here it comes…) a realistic budget that you work out together as early in your relationship as possible, and the willingness to revisit it as necessary. Making a budget doesn’t have to be tedious and depressing if you use it as an opportunity to talk about who you each are separately and what you each need and want; who you want to be together and how to create that; where you want to be in five, ten, even thirty years; and how to make all that happen.

Most budgets fail because people fail to be honest about their spending habits. Maybe you don’t want the woman you adore to know that you spend eight dollars a day on lunch and sometimes hit the drive-thru for a four dollar snack on top of that, every day, day after day. Maybe you don’t want the handsome construction worker you just married to know that if you don’t buy at least four pairs of $80 shoes every single season (in different hot colors) you will surely die, so you don’t mention that. Maybe neither of you is even dimly aware of what you actually spend in any given week.

Start out With The Good Stuff
But before you dive into that can of worms, start out with the good stuff: Explore some mutual goal setting. Do you want to buy a house in five years? Figure out what that will take. Does one of you need a car (or want a new one)? Write that down. Just get it all on paper at first, and talk about your dreams and aspirations without being negative or critical.

Now write out all the monthly expenses: rent or mortgage payments, utilities, groceries, entertainment, insurance, miscellaneous. Decide how you want to pay these. Some couples pool all their income into one joint account and assign the bill paying to one person once the budget is drawn up. If this works, great, but often it’s a recipe for disaster. If one or both people spend money from the account and those expenditures are not in the budget, a shortfall will result and fighting often follows.

Compromise is Key
A compromise that works for many couples is to have a household checking and savings account, and separate personal accounts (for those eight dollar lunches that you absolutely can keep having if they really matter that much to you… or the green shoes, whichever, it’s your money). If you have a special goal you are saving for, you can set up a special account for that and have the money taken directly from each of your paychecks.

Inequality in Wages
Another issue that comes up is inequality in wages. If one of you makes a lot more money than the other, you have to decide how to share expenses. Sometimes fifty/fifty is painful when one person’s entire check disappears into the monthly bills while the other person is left with wads of money to blow on toys more appropriate to single persons. If you suspect this issue might get ugly, better to have the romantic budget session while you are still dating. That way, either of you can bail (or back out gracefully) before you really get yourselves in a mess.

An Example
I once had a boyfriend who made about $70,000 a year at a time in my life when I was a graduate student and made only about $15,000 a year. I could not afford to go to the places he wanted to go to; I just didn’t make enough money for that. He proposed a budget solution. Whenever we went out to eat and the bill came, he would whip out a pocket calculator. By his calculations, $15,000 is 21% of $70,000 so if the bill was, say, $32.89 for dinner for the two of us, he would take 21% of $32.89 and ask me for my share, which in that case would have equalled $6.91. Sometimes he would spring for the tip all by himself.

You know what? I didn’t marry that guy. What a jerk! But, you know, without the beauty of budgeting how else would I have known to run away as fast as my little feet could carry me? Talking about money can be hard, it can be awkward, but it can be sexy as hell. Twenty minutes of money talk will tell you more about your beloved and the depth of your relationship than twenty months in the bedroom ever will, and isn’t that really what intimacy is all about? Learning about whom your beloved really is and what your life together will be?

So fear not. Set the mood. Put on a little Barry White. And whip out those calculators.

You’ll be so glad you did.

Labels: budgets, guest post, money management