The Lazy Marriage’s Budget

I married a CPA. At the risk of offending the CPA society, your brains are just wired differently than the rest of us. That is definitely the case with my wife. I consider myself to be fairly good with numbers, and I did well in Math back in school, but I’m not in the league of the CPA. Although I do find great pleasure when my checkbook balances and hers is off a few cents. She returns the joy by poking fun at how long it takes me to complete the 1 star Sudoku puzzle. For the life of our marriage, she preferred to live within a budget. For the beginning years of our marriage I would enter the discussions kicking and screaming. I always felt a budget was far too limiting. I didn’t want to cramp my style. Needless to say, my attitude helped get us in a financial hole. The two most common topics fought over in marriage are money and sex. I’ve written plenty of times on the sex topic, now it’s time to tackle the money. When it comes to budgeting, there are those that live by one and those of us that swear tomorrow we are going to sit down and write one out. The intention is honest, we just have trouble following through. So how do you set up a budget you’ll actually follow? Glad you asked. To begin, remember this one simple rule: Spend less money than you make. Now that we covered the main idea, let’s create a simple budget that even the greatest procrastinators can follow (if they ever get around to it). Step 1: Have a conversation with your cash. We place meaning on the things in life. Money is no different. What does your money mean to you? What value does it provide? Beyond money’s providing of the basic necessities like food, shelter, and keeping Mr. Tax Man from visiting, what’s your money for? Security. Fun. Power. Fame. Understanding the meaning we place on money can go a long way in helping you get your money under control. Step 2: Where’s you money go? Every budget begins with an understanding of where your money goes on a day-to-day basis. Don’t skip this step. If you don’t know where it all goes, you won’t be able to determine where you want it to go. There are two ways to go about this step: the CPA way, where you track your spending for at least three months, inputting every penny in a multi-category, macro-enabled Excel spreadsheet, then pouring over every debit and credit each night, or can do this the lazy person’s way. Lazy it is! For those who use credit cards for most of their spending (paid off in full each month of course) or if you use a debit card, review the monthly statements and categorize your spending areas. Some cards will do this already. If you live on cold hard cash, write down all your expenditures for one week. You can then multiply these numbers by 4 (there’s that pesky math again) in order to get a rough idea of where your cash goes. This method obviously is leaving out the major monthly expenses like house, car, insurance and the like. Simply add these numbers to the monthly estimate. Simple eh? If you chose the CPA way, at this point you would add up each column of the spreadsheet, run the macro/algorithm you’ve created in your spare time on Friday night, and analyze the results by running the final numbers through the statistical program you’re bound to have on your laptop. Step 3: Plan to spend your cash. Now that you have an idea where your money goes, it’s time to spend your hard earned cash. Not literally yet. Sorry. Instead, make a list of expenses for the upcoming three to six months. Things like vacations, car tune ups, or planning for paying off debt, saving, or investing in your favorite mutual fund. Do the same for long-term plans, two to five years out. You now have a spending plan. Be sure to leave a little room for the unexpected cash you’re sure to need at times. Like when your car breaks down or your in-laws decide to move in for a few months. Step 4: That pesky math again. With your spending plan in front of you, add in items from your “wish list.” Then calculate what these items would run you on a monthly basis. For instance, for the upcoming family vacation, divide the total cost of the trip by the number of months until the trip. Viola, you have a way to prepare for the trip and pay for it as you go. Step 5: Save money the no-brainer way. This is really simple. Visit your bank and set up an automatic monthly transfer of money from your checking account to savings. This could be as little as $20 a month. No worries. Put something into savings every month. Step 6: Cut out the frivolous spending. The list of “must have” items is endless. In order to curb the frivolous purchase’s impact on your overall spending plans, try the “envelope” system. It’s easy:

• Come up with a reasonable weekly amount you’ll allow yourself to spend in your biggest categories. (Those are typically “food” (or, depending on your lifestyle, get more specific such as “lunch,” “family dinners out”), “entertainment” (e.g. happy hours, movies, tabloids to pass the time), “transportation” (gas, parking, taxis, public transportation), “apparel/services” (dry cleaning, bangs trim, cute shoes.) For guidance, consider that the four biggest budget categories for typical American household are housing (34%), transportation (18%), food (13%) and entertainment (4%).
• Create envelopes for each of those categories.
• Put the allotted amount of cash to cover a week’s or month’s worth of expenses into each envelope. (You don’t have to carry the entire wad with you every day, but do make sure you don’t cheat with extra visits to the ATM.)
• Once the cash is gone, so is your weekly stipend.

Remember, once you get a handle on your finances, you’ll free up more time to worry and fight about other things. But look at this way, you’ll have more money to go out on a nice date in order to make up.