3 Tips for Budgeting
First, I’d like to apologize for my lack of a new month’s resolution last month. PCSing from Alaska to Kentucky took a little bit longer than I had planned, and then once we got here, we had issues with internet service. Not to mention the truck of stuff to unpack! I’m not exaggerating—it was 11 crates. Still under the weight limit, though—good thing yarn doesn’t weigh a lot.
But now that 90% of everything is in its place, the internet is up and running (unlimited internet, you guys!), and the kids are back in school, I’m ready with another resolution—taking charge of finances.
For a lot of people, “budget” is a dirty word. It doesn’t have to be, I promise. Even if your spouse is the one who writes the checks, it is so important to know where the money goes. TDY happens. Or in my case, I go visit my parents and get calls from Big Sarge asking, “Where’s the checkbook?”
Money is a hard subject for some, and to be sure, there is no one-size-fits-all approach. However, there are easy ways to start taking control of your money now, which is my May resolution.
Here’s a little disclaimer: I am going to start at the very beginning, and it may be old hat to some. It’s okay to think so. This may not be applicable for everyone, much like everything I write. I’m not everyone’s cup of tea—I’m more like a dry martini.
1. Remember MIMO
The first step is MIMO: Money in, money out. How much money is coming in every month? His paycheck, your paycheck, child support, rent money, etc.? Write it all down. Pretty nice number, huh?
This next part bums a lot of people out.
Write down where your money goes. Mortgage or rent (always a big one), car payment, utilities. Think you’re done? Nope. Car insurance that gets paid every six months? Put 1/6 of that bill in there. I always forget the car insurance. Subtract the second number from the first number. Hopefully there’s some money left to give you some “wiggle room.” If there’s wiggle room, great!
2. Consider your goals
This is the point where you (and your spouse) talk about your goals and how you want to achieve them. Communication is super critical at this point. Here’s an example: Husband is big into gaming. Online, PlayStation, everything. Wife has a slight addiction to cookbooks. Both of them want to buy some land in the wilds of Kentucky. Both are going to have to give up a little, maybe fewer games, maybe borrowing cookbooks from the library, in order to achieve their shared goal.
3. Cut where you can, if needed
If there’s no wiggle room, slightly less great. That’s when there’s a little more work to be done. Ask yourself, “What can I cut from my budget?” It won’t be fun. I’ve been there, done that. It’s why I’m still paranoid about money. I sock it away in savings accounts, mutual funds, TSPs, and CDs. Ever seen those ads about “found money?” That’s going to be my relatives someday, finding random accounts long after I’m gone.
There’s only one person who can control where your money goes, and it’s you. You’re in charge. Doesn’t that sound great?
How do you and your spouse manage and communicate about money? Share with us!
