My wife and I have created various budgets over the 20+ years of our marriage… but we haven’t done much more than just create them. Usually they were created in a time of financial frustration.
This last weekend we packed our bags and holed up in a hotel to talk about finances with no distractions. I want to share one epiphany that I had this weekend. I’ve heard Dave Ramsey say you should create a new budget every single month. We never did. We just created a big annual budget, based on past spending, and then kind of divided each line item by 12.
For example, we have seven people in our immediate family. We spend about $100 on a birthday. With this annual-budget-logic, we’d take that $700 budgeted, divide by 12, and put $58 in each month on the “birthday” line.
The problem with this is that in February we have two birthdays. In March we have none. So the reality of what we should budget in February is $200, not $58. And in March, it should be $0, not $58.
Looking at the year, it kind of makes sense. Looking at the month, it’s all kinds of messed up.
So, we put together a February budget (based on our annual budget, but changing things we knew needed changing for just this month).
Folks, money is a big deal. In a marriage, money is one of the top five issues. Another top five is communication. This year’s JibberJobber theme is income streams… what you spend is a negative income stream. Let’s get serious about it.
I’m reminded of a guy I met who was unemployed… and had been for a while. He had a nice car and a nice house and what looked like a nice life…. and told me that his past financial decisions, and how he spent his money, and how he managed his debt, made his transition much less stressful than the average job seeker. It was a beautiful thing to witness.
How much fun would your job search be right now if you didn’t have the stress that living paycheck to paycheck, and being backwards on your money?