Step 1: What’s your status?

I have many people comment, either to me, or just in general, how hard it is to manage money and budget. Let’s pause here and acknowledge this- budgeting and managing your income and expenses is hard. Try to delete this idea that you’re not smart or inactive because you haven’t previously been successful. It’s difficult, no matter which way you do it- in order to be successful with money, you often either need to be organized and disciplined (hard) or make a bunch of money (also hard). And, if you’re married, take that difficulty level, and multiply it by 4. Oofda, this thing is no joke. So, take a deep breath, forgive yourself for any previous mistakes you have made, reframe them to lessons learned, and exhale.

Then, and this is a SUPER important part- why are you doing this? What’s your “why”? If you’re doing this with a partner, you both need to be on the same page- this doesn’t always mean you need the same why, but you both need a why that’s generally the same commitment level. I’ve tried dragging my husband into my “why” so many times, and no wonder it didn’t stick- he needed his own “why”. It might be “because the stress is eating me alive” or “I want to take my kids on vacation” or “I feel unsafe with our current financial situation” or even “my spouse feels unsafe, so I’m going to do whatever it takes to make them feel safe in this relationship, even if I don’t completely understand why they’re so concerned.” You both need to be on the same level of commitment, because if one of you is all in, and the other is just dipping a toe, that will lead to frustration and resentment, which is an ugly beast to tackle. Avoid it at all costs.

I’m going to write my posts based on the idea of spouses combining incomes into one account. I know not all couples do this, but I don’t have any experience with separate incomes/budgets within one household, so I won’t pretend to know how to manage that. I think it would make things more complicated, but if that’s what works for you and your family, then you do you :)

Ok, so now what? We’re letting go of the past, we’ve figured out why we’re doing this budgeting thing, the next step is to recognize and accept the present reality. Grab a random piece of paper, don’t make it a whole big thing with a perfect notebook and an hour of the perfect atmostphere and background focus playlist (unless that’s manageable and easily accessible to you- in my case, those moments are few and far between with three littles, so just take the opportunity, imperfect as it is, whenever you can). What’s your status? Figure out your income schedule. Do you get paid once a month? Every two weeks? Do the paychecks fluctuate? A good place to start is to look at a couple months to a year worth of time, depending on the nature of your income, and figure out how much you make, on average, per month. If June is always a good month for you, but September is rough, be sure to include these months. Write this number down, and put it in a box. We’ll come back to it in a second.

Next is to figure out your consistent and recurring bills- car payments, rent/mortgage, utilities, phone, internet, kids activities, daycare, etc. These are bills that come out usually once per month, that you can count on. Include any subscriptions you have. Don’t include groceries, gas, and eating out. Write these recurring expenses down, item by item, and total it up.

Take your average monthly income, subtract your recurring bills, and that’s what you have for your everyday spending- groceries, gas, spending money (!! yes even if you’re on a budget, it’s my personal belief that you need even just a little bit of fun money !!)

What’s your status? How much do you have, as it stands, to spend on everyday things? Is it enough? Could it be enough?

We’re going to chat about what to do with the everyday expenses in the next post. If you’re getting started before that post comes out, just watch your everyday expenses, or go back through the last couple months of expenses and categorize them- the categories we typically use in our budget are gas, groceries, restaurants, and household goods (things like the kids need new clothes, our laundry hamper broke and we need a new one, diapers, etc)- many people might combine this with groceries, but it works for us to leave it separate.

In the following posts, I’m going to talk about systems that make budgeting manageable, how to figure out the hardest part of budgeting- everyday expenses, planning for sporadic large expenses, and planning for the future/goals.

If you have any questions, or ideas you’d like included in future posts, please let me know :)