Friday, December 9, 2016

Minimalist Budget

Disclaimer: The key word here is budget.  “Spend ALL the monies!!!” does not qualify.

When I tried to engage my husband in budgeting in the past, he would get overwhelmed, increasingly more silent, and finally just frown at his hands.  Is it any wonder, when I was presenting him with this:

Yes, that’s a screen cap of my real budget.  It all makes perfect sense to me, but to a man whose idea of budgeting is “don’t drop below $1,000 in the bank account,” this financial bomb was enough to make his brain explode.

Understand that I revisit my budget on average 3-4 times a week.  I often fiddle with it, copying it into a new spreadsheet so I can play “what if” with our incomes, our savings, and even our various bills.  I actually enjoy doing this.  I'm a nerd.

But when it came to talking about money with my husband, all he heard was this:

Peanuts Characters and Comic Strip © Charles Schultz

I have despaired of my husband taking interest in our finances time and time again, but when I heard the idea of budgeting remaining dollars by percentage, something clicked.  Our bills are fairly stable, though they vary somewhat unpredictably between Summer and Winter.  So why not, for the sake of getting a picture my husband can actually understand, just make bills a single category?

The result looks like this:

Even I felt a sense of relief knowing that, suddenly, all I have to do is ask, “Do we want to save or spend more this month, or do you want to keep them each at 50%?”

I can still go into my spreadsheet and finick around all I want.  I can also expand the Bills tab to input the exact amount we’re spending on each item.

But when it comes to those big, monthly conversations, my husband can breathe an enormous sigh of relief and focus on the important part: What are we going to do for fun this month?


So here is the breakdown, and yes, it really is simple.

First: Make a list of  all your bills and their monthly amounts.  I found mine up to the nearest $5 to give myself a little wiggle room.  Your list might look like:

Rent/Mortgate: $1,000
Electricity: $200
Groceries: $250
Gas: $100

Yes, I include food, cable, gasoline, pet care...everything that I know I need to spend to keep myself and my dependents alive during any given month.  Write down (or type out) the total of all your bills.

On our budget above, this comes out to $2057.55 because of a weird insurance bill that is static.  Yours might be $1,800, it might be $2,400, or it might be $250, if you're still in high school.  (Oh, how I miss the days when my only bills were car insurance and gasoline!)

Second: Subtract your bills from your total monthly expected income.  If you make $320 a month and  your bills are $250, that leaves you with $70.  If you make $4,000 a month and your bills are $2,500, that leaves you with $1,500.

Third: Assign your remaining funds.  Break them out into the categories of Give, Save, and Spend.  (Yes, you should always be doing all three of these.)  One month your Save might be bigger than  your spend, especially if you're saving up for something.  Another month, you might have more in your Give than in your Save category, if you make a larger than usual contribution to your church or charity.  The fun months are when you get to beef up that Spend category!

Moving Forward

Now that you have your bill total, you can use that number moving forward as your fourth, almost hidden category.  If you move to a new home, change your service provider, or notice a bill go up or down, you will want to recalculate your bills.  But if nothing major changes, you can let go of recalculating those numbers every month.

Essentially you can write your budget every month on 5 lines:

Income: _________

Bills:     _________
Give:     _________
Save:     _________
Spend:   _________

Knowing that your bill category is going to be a pretty consistent number in your budget lets you focus on the more important categories that help you engage in your community, reach goals, and have fun!

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