Non-Scary Budget Conversations

Whenever I mention to a friend or co-worker the topic of budgeting, it always seems to lead towards one of two responses:

1. I maintain a budget with varying degrees of success; or, 

2. I’ve tried budgeting, and it was too restrictive / my spouse and I could not get on the same page / it took too much time.  Now I just make sure the credit card balance doesn’t go too high so that I can pay off at least the majority of the bill each month.

My wife and I budget successfully every month.  I get paid once a month, so this cadence works well for us.  I’ve used a variety of software tools to aid in this process over the years, including EveryDollar, Mint, Quicken, a spreadsheet, and You Need A Budget (aka YNAB, our current favorite).  These are just a few of the myriad tools out there to make this process simpler electronically if keeping track of receipts isn’t your jam.

What does that process look like?  Well, we sit down and look at each category - I usually pre-populate the categories with estimated amounts ahead of this conversation to expedite the process.  Many of these are a quick acknowledgement, such as the mortgage.  We typically spend the most time discussing food categories and whether there are any areas we should look for savings.  Pro tip for food budgeting: we plan for slightly more than we think we’ll spend.  That gives us a bit of flexibility in case something unexpected happens.  This could be as simple as trying a new restaurant that ended up costing more than we anticipated.

Now, when I say once a month, that’s when we go through every category of the budget and think about the upcoming month for any changes.  We still revisit the budget along the way as needed for expenses that we did not originally plan.  Kids birthday party popped up?  Well, let’s move $20 from the retirement savings line item to pick up a small gift.  Medical bill came in the mail unexpectedly?  Same process as above.  The key is that we don’t beat ourselves up for these unforeseen expenses.  A budget should be a living, breathing tool to help us achieve our money goals, not shackles to make us feel as though we’re missing out on living our life.

Approximately twice a week, I log in to YNAB to categorize transactions to the correct budget sections.  This also serves as a check-in to ensure that we’re still on track for the month.

How do we have these conversations surrounding money without sparking a fight each time?  To do that, we first needed to think and dream about what we wanted to do with our money.  This makes for a fun date topic since it’s not about today, but envisioning what the future could look like together.  Once we went through this process, we determined what direction we’d like to head overall.  For us, this means working towards financial independence in order to have the freedom to pursue what sounds interesting in life without the restriction of a nine-to-five job.  This includes successfully raising children, traveling, dabbling with homesteading, and owning a small (likely micro) business.

Once this base set of values is established, we can then filter any money questions through this lens.  Should I purchase a new computer?  Maybe, if it helps pursue a small business goal.  How about a newer, fancier car?  Maybe, if it would help us to travel more frequently.  These are two recent conversations my wife and I have had.  The answer to both questions ended up being no for the simple fact that our existing items are still able to function in supporting our values.

Therefore, that is my top tip for successfully maintaining a budget: get aligned on dreams and values first in order to make future conversations around money easy.  Because in the end*, money is a tool to be used to reach life goals.  It will always be a difficult conversation if those underlying goals are not being met for any party affected by the budget.

*ADHD tangent: does anyone else's brain trigger song lyrics at the drop of a hat?  In the end, it doesn't even matteeeeer…