How We Finally Learned to Budget

Thursday, October 24, 2024

It's not that we didn't try. There were many attempts along the way (to have a budget), but they always seemed to falter when it came to communication. The usual pattern being that after a month of two of blown budgets (because they were incomplete), I would stop tracking spending, things would spiral, and only when there were no alternatives remaining, nothing left to borrow, would we come to terms and try again. It was my fault for not communicating because it was unpleasant to look at the state of our finances when things were so out of control.

I have listened to Dave Ramsey, and I like a lot of what he says, but I can never seem to follow his plan exactly. I used to think I was too smart, but I have disproved that thesis, so many times now, that I have to admit it's untrue. I can't deny that Dave's plan is good, it would definitely work, but I am not willing to make my family suffer for years while we dig ourselves out of debt because of my failure. I am sharing what we are doing now because, so far, it's working for us, and maybe it can save you from making similar mistakes. I hope it's clear that I am not saying I have a better plan than what Dave Ramsey offers. It's more that I can't take the pain of the severe discipline required during the getting out of debt step of his plan.

Having a budget is the start. Staying on top of the budget, and communicating where things stand is necessary if it's going to work for more than a month or two. I honestly don't remember all the winding paths we took to get to where we are now, but in short, our requirements for a budgeting tool came down to for me, manually journaling so I would have to examine and classify each transaction, flexible categories so I could classify the expenses in a way that made sense to us, and for my wife, a way to report where budgets stood during the month, and a way to capture most of things that crop up over the course of the year that aren't reflected in the regular monthly expenses (so we were not constantly blowing budgets because we forgot that ________ renewed in November).

As is typical of me, I decided on a do-it-youself solution. I decided to use Google Sheets because we both use gmail and have Google accounts, I could share the document I used for tracking with my wife, and she could access it whenever and wherever with her phone. This turned out to be a really good choice because I later found I could write extensions with JavaScript to send text/email reports, so that now she doesn't have to open the spreadsheet at all to know where budgets stand. She just looks at the latest text message to see what is left in the budget for each of the categories she needs to track.

All of these features together cracked the communication problem for us. The fact that I look at transactions nearly everyday to keep up the journal means I am updating multiple times per week and I ask questions if I don't recognize a transaction or what expense it should be charged to. This keeps communication going. Also, we have worked together to try and think of every single thing that will come up in the year that is not reflected in our monthly bills. That is then summed up into another monthly 'bill' that is transferred to a savings account for each of those future expenses (and we can just continually add to the list as things occur to us). Now we can see where we are going to be at the end of the year and beyond with some clarity and with some provision for unforeseen contingencies.

Up next: The Spreadsheet