Wednesday, June 24, 2009

FPU Week 3---Dreaded B-Word

Last Sunday was our 3rd class in Financial Peace University, and we talked about the the dreaded B-word, Budget. Since I read Total Money Makeover months ago, we have been doing the budget and have posted several times about it. Therefore, I am not going to go over every detail of this past Sunday's class, but will discuss some of the issues I have with budgeting so far.

I believe if I keep honestly critiquing us and our money management, it will help us in the long run to win with money. Having a lot of money is not the desired result of this process, the results we are looking for are Financial Peace, retire with dignity, and pursue some of our dreams later in life. Below are just some of the things and habits that gets in our way of achieving our goals.

One of the things that I do that absolutely does not work is create the budget and never look at it again. I work hard to make a zero based budget and making sure every dollar has a name, but never pull out the game plan to make sure that I am following it. Of course, when something is out of sight, it is out of mind. So needless to say, the budget is no good unless you are committed to following it.

The other big No-No for me is instead of using the food budget for all our food, in practice we differentiate between Groceries and Eating Out, but not in the budget. I budget a certain amount for all of our food and spend it at the grocery store and keep spending on Eating Out even though that envelope is empty. I stick strictly to grocery shopping funds, but if I don't want to cook, I grab the debit card to eat out and it throws off the budget. Felicia and I need to stick to it but also allow for some Eating Out. For example, we eat out after Anthony's class on Monday, since we do not get home until late, but we never budget for it. The solution here may be to add another envelope for eating out.

A realistic budget is important. I make this budget and try to make it perfect, but not realistic. For example, I never budget for my energy drinks or Felicia's Starbucks, but we buy them and it throws off the budget. This time around it will be in the budget, and we will see how this works.

Recently, I have been making the budget and Felicia agrees to it. Basically, I make this perfect budget and Felicia looks over it quickly and we agree on it. But since we never looked at it line for line, we approve this budget that does not fit our lifestyle. I think she knows how hard I work on it, and does not want to change or get into an argument over it. So this time around, we will be following Dave's Ramsey budget committee rules. Dave has made rules for the nerd (me) and the free spirit (Felicia) and below are the rules we will be following.

The rules for me at this meeting are:
  1. Write up the budget before the meeting, then bring it to the meeting, have my say, and SHUT UP!!!
  2. To remember this is a meeting, "not a weekend summit."
  3. I have to let Felicia "mess up" my budget
Felicia has some rules to follow also:
  1. She has to come to the meeting
  2. She has to talk in the meeting
  3. She has to change something in the budget
  4. She can never say, "Whatever you want to do, Babe!"
The rules for me seem a little harsh, but I am willing to give it try because our way has not been working.

***A few post back, I wrote about how we kept putting off the budget and we never did it and we tapped into our savings. I just wanted to update that we had $600.00 in our savings before that but as a result of poor money management, we dropped that to $313.00. Thankfully due to getting back on track and a garage sale this past weekend, we are back to $583.00 and on Friday we will be at $683.00.

1 comment:

the Dad said...

I cringed while reading this post. You were describing exactly who we were 6 months ago.

Today we stick to the budget PERIOD. We know what lies down the *other* road; we've been there. :)

If we need to derail the current month's plan we come together for a meeting about why and invariably we find another way to make it work.

It gets easier! Today, after doing this for nearly 6 months, it's getting quite easy. I did July's budget last night in about 30 minutes and The Wife had one little change.

Keep up the good work.

the Dad