Family Budgeting for Your Sanity

Even with all the little things I do to save money and reduce costs, I felt like I just wasn’t making any head-way. Someone once told me that you could define insanity by doing the same things over and over again but expecting a different result.  While I’m not sure that it defines insanity, it certainly tells us a lot about human behavior.  We tend to wait for our ship to come in, when we really need to go out and find it.

I had been out on the internet looking for an answer to the question, “How do I save and make more money?”.  The real question should have been, “How do I spend money properly?”.  It took me a while to figure this out.  Ok, it took me a really long time to figure this out!  The turning point came when I ran across the website of financial guru, Dave Ramsey.  Dave was selling a product (his book and financial system), but he was also sharing his philosophy on family budgeting and finances. That information was free. I signed up for his newsletter and started reading it whenever I had a chance.

Bad Habits are Tough to Break

His philosophy started to sink in, but it still wasn’t enough to stop my bad habits. People are finicky little creatures. We like repetition.  We despise change.  If we learn to do something self-destructive, it’s generally easier for us to keep doing it than to handle the stress we feel from changing the behavior.  The same was true for me.  I started to see the writing on the wall, but it wasn’t enough to make me stop.  I was always spending money that I should have been using for something else.  I found myself robbing Peter to pay Paul.  Every month I seemed to go further behind.  I would try to write up a family budget, but something would always pop up that I hadn’t thought of and throw the whole thing off. And even when I did manage to get everything into a budget, I ended up feeling restricted.  I was like a dieter wishing for cheesecake.

You Need a Budget

About a year and a half ago, I was trying to balance my checkbook and figure out how to pay for Christmas.  For once, I decided that I needed to try to get a head start on it.  It felt like I was always spending way too much money at the last minute and stressing about whether or not I could come up with it in the first place.  Once again, I started looking online for a budgeting solution.  That’s when I found (YNAB). sells an amazing budgeting software. It’s lightweight, easy to use, and best of all, it subscribes to a lot of the same theories that Dave Ramsey was sharing. I downloaded the 30 day trial and gave it a try.  I had everything entered into the software and was up and going in under an hour. I liked the software so much that I found myself spending lots of time opening it up and looking at everything and assessing my choices.  It was actually addictive to feel in control of what was happening to my financial health.

What Makes This Different from All the Other Budgets?

YNAB is easy to use and well thought out, but that’s not what ended up selling me.  It was the concept.  YNAB believes very firmly that you should always be able to live off last month’s earnings.  Now let that sink in for a moment…   You can pay all your bills for this month with money that you made last month. You can save money. And best of all, you can be prepared for irregular bills like new tires for the car or Christmas & birthday gifts later in the year.  Sounds nice huh?

The software doesn’t do all this for you automatically (though almost).  You also need to understand how to make these things happen and that’s where the other major benefit of this software shines. does FREE live webinars almost daily.  These webinars cover software usage and the philosophy to  help you get up and going quickly. You don’t even need to own the software to take part.

The Philosophy

So we already know that we want to stop living pay check to pay check.  This technique wants us to be able to pay all our bills using last month’s income.  How do we do this?  We have to try to take EVERYTHING into account.  When you start budgeting, you have to go the extra mile.  Put in all your recurring monthly bills.  Those are easy.  Next, think about any bills that you pay a few times a year, like insurance and enter those.  We have to treat these differently.  Here’s an example:  It’s currently March 20th.  You have a 6 month car insurance payment of $200 due on August 1st.  That gives you 4 months to save up for it.  In the column for “Insurance” you budget $50 each month for the next 4 months.  When August 1st comes, you’ll have the $200 all ready to go.  How nice is that!?  Starting in August, you can reduce that amount to $33.33 ($200/6 months).  When the next 6 month bill comes due, you’ll be ready.  You can do the same thing by estimating other expenses.  How often do you change the oil in your car and what does that cost?  Average it.  How much do you spend on clothes in a year?  Average it and put it in the budget.

Stop Making Spending Decisions Based on Your Account Balance

I think a lot of us make our spending decisions haphazardly. We get a call from a friend that’s passing through town and wants to go out to eat.  We check our bank account balance and see that there’s enough to manage the meal.  We know that part of that money probably needed to go to a bill, but we decide to go anyway.

If you can budget for everything, you will always have the money to do what you want.  I budget a certain amount of money every month for “going out”.  If I don’t use it, I either let it stock pile for next month, or reallocate that money to something else.  Many times, I push extra money into my savings account.

Breaking our bad habits with money and getting financially healthy takes some commitment, but I promise that it pays off in the end.  Instead of feeling like you’re being restricted, you end up feeling like you have the world by the tail!  That is especially true when you look at your account balance and see a higher number than you’ve ever had before.  Give it a try. You won’t be sorry.


Disclaimer:  I do not represent either of the companies listed above and have not received any compensation.  All statements in this post are solely my own and reflect my personal opinion and experiences.

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