Back In The Saddle Again: Getting Back Into The Habit Of Budgeting

So it's the end of the month, and around here that means it's time for the oh-so-fun budget meeting between Mr. Six and me.  We've been doing this budget thing for a better part of the last 10 years.  I'd love to tell you that we've reached a point where the budget meeting is all champagne toasts and witty banter about whatever shall we do with all this money?  I'd hate to burst your little financial bubble, though (As an aside, I snicker a little every time I type "budget meeting." It sounds so formal, when actually we're huddled around the computer, Mike in his boxers and me in my pj's. No free doughnuts, no powerpoint, no projected sales figures.  Again, sorry to burst your bubble).

In all fairness, though, our little monthly discussions about where the money goes have changed drastically in the last 10 years. 

For the first few years, when we were intent on paying down our monstrous load of debt, I dreaded  budget time.  I came up with every excuse in the book for why I couldn't sit down with Mike  and take a look at the upcoming month.  By the last night of the month I was out of excuses and we'd sit down and look at too much month, too many needs, and not enough money.  We'd fill out our categories with hopeful estimates, only to get down to our "Projected Spending" and find that it was $500 more than our "Projected Income."  Had I known of Twitter and my favorite hashtag, this is what I would have twittered:

Dave Ramsey and his monthly spending plan can #suckit.

I look back now and I wonder where Mike ever came up with the patience to deal with me on those evenings.  Inevitably the meeting would disintegrate into me whining and blubbering about how there was never any money to have fun, or to make the house nice, or to go on a vacation. And then I'd get all accusatory, as if the gaping difference between what we had and what we wanted was all Mike's fault.  It was his idea to get us out of debt, we were working so hard and denying ourselves so much.  Our peers were buying houses, furniture, cars, going to Mexico.  "When will it get better?" I would shout.  And then this good man, who normally unleashes a torrent of swear words for people who take 5 seconds more than they should to make a right turn, would summon the patience of Job and talk me down from the ledge. 

It will get better.  Just because it looks like so and so has nicer things, it doesn't mean they aren't in debt up to their eyeballs.  We're doing the right thing. It won't be like this forever.

And then we'd do it all over again 30 days later.  Good times.

He was right, though, and it did get better.  As your debt goes down, you loosen up more of your income to spend as you desire.  You get better at determining what is an actual need versus something you just want really bad.  You learn where to pinch pennies so you have more to spend on things you'd rather not scrimp on.  You learn how to talk to each other about money with respect, so a budget meeting turns into a conversation instead of an argument.

When we moved from Nashville to Indy 3 years ago, we found ourselves in an unfamiliar place financially.  For the first time in 9 years, we were debt-free except for our mortgage.  The move was good for us financially.  Between being debt-free, a promotion for Mike, and the extra money he was bringing in from playing online poker, things were very good.  Suddenly, the budget meetings seemed like a joke (see above concerning champagne and witty banter).  Who needs a budget when you don't have tons of bills? We thought we could have a little fun for the first time, let loose a little.  For the next 2 years we might have attempted to do a written budget a handful of times. 

We didn't go crazy with our spending, but we definitely got spend-happy.  We went to Disney and New York City.  We put new floors in the house and bought some real furniture.  We ate out at nice restaurants a lot.  We bought a new shirt if we saw it and liked it.  Nothing exorbitant, but little by little we'd gotten into the habit of spending freely.  If you continue to make more than you spend, then in theory there's no problem.  But what happens when circumstances change? Mike took a drastic cut in pay last year, and then in December he lost his job.  Uh oh.  

In hindsight, we were lucky.  We've always operated on the belief that you have an emergency fund, so we had that cushion.  It's cutting back on the spending that's hard.  It's losing the discipline of knowing how much you have every month and telling it where to go that's hard to regain.

A few months into Mike's attempt to support us on his poker income alone, we realized that unless we got back into the habit of the monthly budget meeting, we were headed for disaster.  Sitting down together again, we realized that we could make his dream work if we just regained some of the discipline we'd had when we were working so hard to make another dream a possibility: the dream of being debt-free. 

And so for a few months now we've been back on track with budgeting.  It was hard at first.  Not hard like those early years of budgeting, but there was still some whining.  I won't name any names.  We hadn't realized how out-of-control some of our categories had become.  Unless you keep track of your money and where it's going, you won't know, either. 

My purpose in laying this all out there for you isn't to discourage you from making a budget a priority in you life, if it isn't already.  For me it's about honesty.  I think Mike and I have made a name for ourselves in our circle of friends for being those crazy Dave Ramsey people.  We are, and we're proud of that, but that doesn't mean that we don't stumble along the way. 

Also, I think if you're going to really devote yourself to changing the way you handle your personal finances, you need to know the truth.  Just because you aren't making payments on student loans, credit cards, or cars anymore doesn't mean the budget is optional.  You have more disposable income. Yay!  Now tell it where to go.  Had Mike and I been doing that all along, we may have made better choices.  We may have seen that spending that extra $200 in eating out or on clothing should have really gone towards beefing up our emergency fund.  It doesn't mean that you will never, ever have fun with your money again.  Just be in charge of your own party, before the party gets the better of you.