29 Years of Budgeting Successfully..Some Thoughts

I thought I would pass on some things I have learned thru years of budgeting with my wife for our entire relationship;

1) One of the best things was to have personal money for each of us budgeted per month so we felt some financial freedom to buy stuff for whatever we wanted without having to feel like we were asking for permission or being nickled and dimed which avoided a lot of conflict  We are both fairly independent people and this worked for us.

2) We also agreed that we would also put the equivalent dollars in #1 in our savings so if we had a good income year, we would have a more savings and more personal money to allocate and likewise for the bad income years.  Ex: Say each of us had $250 per month personal $ then we would also put $500 in savings that month.

3) Realize that not everyone likes budgeting and that may be your partner perspective for whatever reason. Don't use the budget as a whipping tool if you are the budget person but also have your budget plan discussion to get their thoughts and buy-in. Let them know that you are the one managing the joint budget plan for both of you and some trade-offs will need to be made if we are over budget that month and ask them if they would like to discuss that or shall I just make the decision on where we are going to spend less so we can stick to the budget and save for our future (kids college, retirement etc).  Then you know how to handle those overspent/roll with the punches situations.  My wife later wanted to know the trade-offs so I ask her where we want to cut back, takes 5 mins and I change the budget in YNAB accordingly.

4) I budget each paycheck in YNAB by what I call life's priorities. These are the category groups from top to bottom ;  Taxes, Charitable Gifts, Taxable Savings, Retirement Savings, Rainy Day Savings, Housing, Utilities, Transportation, Food, Clothing, Medical, Insurance, Personal, Leisure.  I budget the items in each group for that paycheck starting at the top (Taxes) and continue allocating budget $ until I get to zero on the To Be Budgeted.  If I don't have any funds allocated for Personal or Leisure then I try to find ways to cut spending starting at Rainy Day Savings and back down the list until I have everything funded.  The first few months were a struggle with wanting more $ in Leisure and Travel groups but we were motivated to reduce spending else where to do that.  When ya think about it, this is really a good way to understand your goals between you and your spouse.  For example, if ya wanna forgo some Travel funds to payoff debt or fund your Rainy Day Savings then that's a short term goal.

5) Early on we set up a short term savings category for those "roll with the punches" situations such as dishwasher stops working and we need $ to get a new one but we have no $ in the budget for that and we are not going to run up a CC bill we can't pay off each month.  You can use the Rainy Day Savings category for that or develop a Short Term Savings category.  This will also help you pay off your credit card each month which fortunately we have always paid our balance due each month for 29 years.

6) Start your college savings plan for your kids the week they are born or soon after.  We put $5k in their educational investment account the week they were born and funded it monthly until we had their savings. We did that with our 2 girls and had their college funds fully funded before they graduated from high school.  Yes..we had to do without some frills but we just thought the girls education was more important than  other things.

7) Save at least 15% of your gross income each month so you have a retirement savings plan.  There will be times you may have to rachet that back a bit when times are tough  but this is one of the most important things to do to attain your financial freedom.  Also, if you need to understand what you are investing in and if you don't understand it, don't invest in it.  You'll sleep better.

I am retiring @ 60 this month and my wife has been a stay at home mom 3 yrs after we were married after we had our first child.

That's all for now.  I hope you find these ideas helpful and if you have any questions feel free to drop a note.

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  • Thank you very much for typing this all out- you've definitely given me some food for thought!

  • Thanks for sharing! I definitely agree regarding having personal money -- that's helped give my wife and I some sense of independence and overall be a little less critical about what the other purchases and how that does (or doesn't) fit into our budget. It's nice knowing that we have some money set aside that we can spend, guilt free, without necessarily feeling like we're going to be judged for it.

    Our monthly personal money is a bit smaller that your sample numbers, and our savings is a bit higher currently, but I do like the idea of making sure that personal spending and savings is matched up. If things get tight again I'll have to keep that in mind.

  • Great that I could help both of you out a bit....

  • I needed to hear this 10 years ago! 

    Especially the nudge to save not only for myself (retirement), but for my kids. It's been on the backburner for too long. You just ignited that fire!

    Thanks so much  Larry Colwell . This is one of the reasons why I love this YNAB community!

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  • Great thank you so much, gives me some ideas of areas to tweak. Happy to say we have the retirement one sussed though, come out of his wages before the paycheck gets to us so we don't even notice it leaving each week.
    I'm the at home one, I homeschool and do the odd bit of part time work. I'm also the budget runner though. I try to get him more involved but it doesn't really work, he has no idea how much he even gets paid, he's terrible. Anyway might just try what you say about asking him how much input he wants and if he's happy to let me just make decisions. 

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