Finances, Part Six

I guarantee if you put this one post into practice in your household you will never have a fight about money ever again.  PERIOD.  How do I know this?  Well, Courtney and I have never once had a fight about money in our marriage.  Not one.

You might be saying, “Well, you have only been married for almost a year…give it time and you fight about money.”  I beg to differ on that assessment.  The reason that Courtney and I will never fight about money is because each of us know exactly where every penny of our money is going every month.

Around the 15th of each month (that’s when the bulk of our income is deposited) we sit down together and work on our budget for the month.  No matter how much money we have we spend EVERY PENNY of it on paper (or in our case we use Mvelopes) before we ever spend a penny of it for real.

Here is how it goes:

1. We set aside a percentage for our tithe.
2. We set aside another percentage for retirement.
3. We set aside a third percentage for cash savings.
4. We then allocate funds for all of our necessities:
   1. Rent, Gas, Utilities, Cell Phones, Food, Medicine, Health Insurance, Car Insurance, Renters Insurance, etc.
5. Finally we allocate the “fun” money:
   1. Vacations, Entertainment, Gifts for Birthdays/Weddings/Graduations, etc.

Then all of the money is allocated.  So every penny of our income has a specific place to go.  This leads to no fights.  Each of us agrees at that time to how we will spend our money.  In months where our income is lower we back off of the “fun” expenditures.  Since we have both agreed to the budget it leaves no room for argument.

We may be disappointed that our friends have a last minute adventure planned and we cannot afford to go, but we never get into an argument about it.  I promise if you will make an agreement with your spouse to do this each month you can eliminate money arguments forever.  (The key is to agree 100% on the budget each month.  This means there will be give and take.  Both parties will have to pledge their full support to sticking to the budget)

An easy way to start this process is to start collecting receipts for all of your purchases for 1 month.  (I don’t care if you put $.25 in a gumball machine…write it down.)  Then at the end of 30 days come together with all of your receipts and paid bills written down and write broad categories of where your money went:

• Groceries
• Eating Out
• Gas
• Utilities
  • Water
  • Telephone (incl. Cell Phones)
  • Natural Gas
  • Electric
  • Cable
  • Internet
• Insurance
  • Health
  • Life
  • Car
  • Home/Renters
• Mortgage/Rent
• Tithe
• Savings
• Retirement
• Home Repairs
• Pet Expenses
• Vehicle Maintenance
• Credit Card Bills
• Tuition
  • Pre-School
  • Private School
  • Tuition

I think you get the picture.  Be specific enough that you do not have a Miscellaneous category, but broad enough that you aren’t sticking a $1 candy bar in its own category.

Once this is done you will be able to see where your money goes each month.  (If you give your kids $20 on a Friday night…make them bring you receipts.  If they complain then tell them they can either bring you a receipt or not go.)  Then instead of looking backward you can start to look forward.  Before spending your next paycheck; decide as a couple to spend it on paper first.

In the end you will start to control your money and where it goes and this will invariably lead to less stress which will lead to less fighting.  I GUARANTEE IT!