Little Jack’s Corner

Ok… there’s this popular thing with a lot of the wife & mom blogs called “works for me wednesdays”.  It’s hosted by Rocks in My Dryer (rocksinmydryer.typepad.com) (hehe, love the name!).   With WFMW, different bloggers post little tips that have…well…worked for them along the way.  Then, they put a link  to their tip on the Rocks in My Dryer website for others to read.

I just discovered this a few weeks ago as I was going through some nice blogs on blogger.com.  Well - after Kevin left this morning (he leaves at 5:30 am for work) I realized that today is Wednesday and I have a new blog!

So, here is my very own “Works for Me!” Wednesday post. 

OUR BUDGET SHEETS

…really work for us.

Here’s our backstory - every since Kevin and I were married we’ve combined our money.  Both of us were working full time, bringing in 50/50 of the household income.  We were brand new at all of this budgeting stuff, newly married, with a new house mortgage and other bills that we previously had never had (before Kevin met me he had never even used credit!  He’s cash only and likes it that way). 

We both believed that for our marriage to work, we needed to based it on the principles of “being as one” like that Bible teaches.  There would be no “his money” or “my money” in our home unless it was specifically categorized as that.  The money from our jobs would go together into a household bank.  Tabs were not kept on how much “he” made or “she” made - we just both did what we could to ensure we had the money to pay our bills and eat.  I also took on the duty as the designated “financial manager” for our money.   Brainy wifey manages finances, Hubby doesn’t need to worry.  Sounds easy enough, right?  Wrong.

Both of us didn’t realize just HOW hard it would be to combine our personal money habits!  We made many, many mistakes during our first year of marriage that almost ended us - one of which was a build up of $10,000 on credit cards (we cut our cards up in Nov. 2006 and never looked back….we have only $3,000 left to pay off now and no longer use credit cards).  Coming from different backgrounds of money thought (Kevin being “cash only” and me being “electronic only”), we fought back and forth as we tried different methods….one using strictly my way (electronic banking)…one using strictly his way. (cold hard cash only).. with neither of us being happy.  In fact, we were downright miserable!

Thankfully, after a huge breaking point in our marriage at the end of May, 2007, we decided to develop a system that we both understood and could relate to.   We no longer used credit cards, but we went back to me using a debit card and checking account for household bills and my own personal spending.  Kevin would receive a personal cash budget to do with as he pleased.

It took us months, but we finally worked out a system we both understood and could relate to.  It combined a mixture of cash use and electronic use, and a mixture of visual budgeting and account management.  Using a booklet we call our household notebook, we created a visual budget that works very well for both of us.

At the beginning of our notebook, we have 8 different categories listed and how much we needed for each category per month.  Then, we divided that number by 4 (weeks), for our weekly budget for that category - and that is how much weekly money would go into that category.

For instance,  we need $675 per month for our mortgage.  That means that $168.50 goes into our mortgage category each week - and that money is “unspendable”.  We use a handy income tracking sheet to divide things up with… and, each category has it’s own sheet….

 Going back to our mortgage example, here’s a look at our current sheet…

As you can see, each week we have a “weekly deposit” in our plus column and the balance carries up.  In this example, by December 22 we had reached our monthly mortgage goal, paid our mortgage early, and had a week of “extra money” when we didn’t need to make a deposit! (12-28).  The last column is the Ref. column for whoever makes an entry. 

Each of our budget categories look like this, and we currently have 8 categories that fit our money management needs 

Six of our categories are considered “house money” - bills, utilities, gas, etc.  I’m usually the only one with entries in those since I work with the set bills.  A 7th category is “couple spending”  - this is money that benefits us as a couple…groceries, food, entertainment.  Everytime we spend from here, it get’s “tracked”…trips to Food Lion, Wendy’s, baby items from Baby’s R Us.  Everything .   A final sheet is budget for personal “free” cash.  This is our “mad money”, no-questions-asked cash.  The only thing that gets tracked here is ATM withdrawals!     Once money is “placed” into a category, nothing -and we mean nothing- can remove it except for it’s intended purpose.  Mortgage category money is never used for Burger King…. and Utility category money is never used to pay our car loan.  Money is kept in a checking account and I get to use the handy Bank of America online bill pay to my heart’s content!  (Good for me!) and Kevin gets to visualize our cash flow very easily - and still have personal cash to work with! (Good for HIM!).

We have been using our new system for 2 months now, and it is working beautifully.  The best part about it is both of us understand it completely and if by some unfortunate event I am unable to do our bookkeeping, Kevin can pick it up easily and perform all needed activities.

So that’s our Budget Sheets.  They work for me and they work for Kevin.

UPDATE!  I’ve loaded these online.  Here they are if you want them. :)  Just click on the link and you’ll be taken to the download page.  Click on the link there to download the MS Word file.

Downloadable Household Budget Forms