Lessons in Setting a Budget

Prior to last year my husband and I had an imaginary budget in place.  You know, the kind of monthly budget in which you pay your dues and responsibilities, save a little and have plenty of fun with the rest. While I’m a natural saver, my husband on the other hand is a spender, so we were never able to find a happy medium in which to set a harmonically balanced budget.  Well, this all changed one Sunday afternoon.

So, what happened that would change the trajectory of our finances?  What enlightened my “spender” that he solely decided that we needed a budget transformation?  Apparently, he was listening intently earlier that Sunday morning as our pastor shared some of his goals and how he and his wife couldn’t wait to be financially free.  Their long term financial goal was to pay off their mortgage, to be able to give generously to causes that were near and dear to their heart.  He went on to explain that they had no debt besides their mortgage and according to their budget, if they stayed on track they would have their mortgage completely paid off by the end of 2017!

You see, that day my husband came to the realization that we did not have to live the rest of our lives owing banks money.  It is possible to live completely debt free.  We just had to set financial goals and set a detailed budget in place.  The possibilities of what we could do with our income empowered him to make changes, to reevaluate our relationship with money, and to set financial goals on paper!

So, today I want to share some lessons we’ve learned on our journey by simply setting a budget.

Setting a budget:                                                                                                                                                                                               

Revealed the truth about our finances.  For the longest time we truly did all of our budgeting (if that’s what you want to call it) in our heads, no paper, pencil and no spreadsheet!  We started by breaking down our finances, taking a good look at the reality of what was coming in and what absolutely needed to go out.  It was very revealing, we were able to see how wasteful we had become.  After an in depth evaluation of our income, expenses and debt, we set financial S.M.A.R.T goals, both long and short term.  We are now held accountable for the budget we both agreed upon.  We are both driven by our long term goals, no more wasteful, mindless spending; every dollar has a purpose.

Gave us the freedom to spend.  A budget gives us permission to spend responsibly without feeling guilty.  And because we have adopted the cash envelope system, we are able to manage and use the cash in each category wisely.  We no longer need to fear where we stand financially at the end of the month because we have a guide to follow and goals to reach.  You decide what categories are important to have and how much to put in each.  We have an allowance category in which we get our own personal fun money and once that cash is gone, it’s gone.  Another category we’ve included into our budget is date night because we love getting out and enjoying a nice dinner.  We love how the cash system keeps us accountable and keeps us from midlessly using our debit card.

Increased effective communication between my husband and I.  Not talking about our finances (the good, the bad, the ugly) did nothing to improve our financial circumstances.  We had to be willing to openly discuss our bad choices, our current financial situation and our dreams and goals moving forward.  Our budget has helped eliminate the blaming and guessing as to who spent more and on what for the month.  We now hold brief monthly meetings to talk about how we did for the month, discuss if we need to tweak any category or make any other adjustments.  We are working more like a team these days and our dialogue has improved for the best.

These are only a few of the rewarding lessons we learned by implementing a budget.  Don’t think of a budget in terms of all or nothing and restrictive, rather think about how a  budget helps you prioritize your spending and manage your hard earned money!

Next week I’ll show you how to create a budget and share a tool that’s been very helpful in our journey.

Do you have a financial budget? What financial goals would you like to accomplish this year?




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