Today I decided to tackle the dreaded B-word.
Last fall, when Eric and I went through Dave Ramsey’s Financial Peace University, one of our assignments was to create a budget. It was a strange time for us to do so. Eric was on the verge of being hired full-time at the job in which he was working as a contracted employee. We knew that not only would his salary be changing soon, but he would also be getting full benefits, including much better health insurance (our current health insurance was, quite frankly, a joke) along with 401K contributions.
But, our assignment was to create a budget using the current state of financial situation. So we dutifully worked the numbers and did our best to follow that budget for the first month.
Not too long afterward, Eric was indeed hired full-time. He received a raise, and he (eventually) received his full benefits. Sadly, we never bothered redoing our budget, and what’s more, after that first month we didn’t bother writing anything down again.
I kind of kept that budget in my head whenever I shopped for groceries or any kind of miscellany, but I was less than thrilled with it. I am terrible at holding things in my head. When I keep things in my head, rather than writing them down (either on paper, my laptop, or my cell phone, which I’ve nicknamed Grayback), all it does is make me more anxious. I know full well I have a terrible memory, and I know that things will slide right out of my head if I attempt to cram it all in there.
I had, however, become fairly good at keeping our checking account register up to date. Before we went through FPU, I never bothered keeping it updated. Eric and I had just gotten in the habit of checking our account balance online rather than keeping our own records. You may know where I’m going with this: it didn’t work because I had our balance in my head when I went shopping. It also didn’t work because it wasn’t like Eric and I told each other whenever we spent money, so I wouldn’t necessarily know that he had gone out to lunch with his coworkers on the same day I had bought groceries. And, of course, it didn’t work because sometimes you write checks for things that aren’t cashed in for a while. For instance, I could write a check for a book fair purchase or to cover field trip expenses, and either of those might not be cashed for a day or two, or even a few weeks.
The result of all this carelessness was a multitude of overdraft fees and dips into our savings to cover the lack of funds in our checking account. I am here to tell you (if you don’t already know) that accruing overdraft fees is one of the worst feelings in the world. When every in-the-red transaction hits you with $45, that hurts. And before I started keeping the account register up-to-date, that happened at least every other month, if not every month! Yikes.
But last month, I got more lazy and careless than usual. No overdraft fees, thank God. However, when I finally gritted my teeth and said “I AM UPDATING OUR REGISTER” (after having ignored it for about 3 weeks, yikes), I was not greeted with a pleasant sight. All those smidgens of shopping and going out to eat a few times more than we should have resulted in just under $300 remaining in checking. And I hadn’t paid all our bills, or tithed, or put any money into savings. I was so upset with myself.
So today, I resolved to do better. Not only did I get our checkbook register nice and up to date once Eric received his paycheck (it came a few days early, HURRAY!), not only did I make sure all our bills got paid, but I also said, “I’m sitting down and I’m working out a budget.”
Although I could have done a good old-fashioned paper budget, I decided to find someplace online to get ‘er done. Paper budgets are fine, but I’ve tended to get confused with them in the past. It’s not so much the creation — that I can do. But when it comes to actually using the budget, keeping track of what you’ve spent in which category and how much you have left… I’m hopeless.
I did some research online, trying to find a resource that was free and easy. Maybe if we were making a little more money, I would be okay with paying a small amount every month for budgeting software. But we’re in savings and debt-payoff mode right now (we have just one debt left, our student loan, but it’s a doozy!), and I didn’t want to use any of our precious extra money for budget software. I would have figured out a paper method before I went that route.
I considered Mint.com after reading a comment left on one of the many lifestyle blogs I read. But the fact that you’re expected to actually share all your financial information — your account numbers and whatnot — gave me pause. I didn’t feel the need to be reminded to pay bills, nor did I want to schedule bills to be paid through the website. I’ve gotten pretty good about getting all my unpaid bills in one place so they’re ready to be paid once the paycheck comes in, and I can schedule bills to be paid through my bank’s website. All I wanted was an easy way to plug in my budget numbers and keep track of what I was spending in each category.
And then I found BudgetSimple. The moment I found this website, I knew it was exactly what I was looking for. It couldn’t be easier. All you need to give them is your e-mail address and a password. Then they ask you for your monthly income (which you can divide into various categories, helpful when a household has freelance income in addition to regular monthly income, like we do), your monthly expenses, and bada bing bada boom, you have your budget set up.
Then, on a separate page, you have “transactions.” This is the part I’m really excited about. You enter amounts that you have spent into the proper category, and it will tell you how much you have to spend in each category. That’s it. No trying to work the math yourself, no convoluted “deposit money into separate categories,” no trying to figure out how to divide your paychecks between the categories or how to subtract according to categories. The website does all the math for you. Once you’re done, you can see right there, in black and white, when you need to quit spending in such-and-such a category.
You can also run reports and receive e-mail reminders to update your budget. I did sign up for the latter, because it’s an easy way to remind myself to keep my financial house in order, so to speak. I requested weekly e-mails.
I know there are other budget websites out there as well. I know of BudgetTracker.com, BudgetPulse.com, PearBudget.com, and the aforementioned Mint.com (which has many happy users despite my personal misgivings). Of course, you can also just set up a spreadsheet in Microsoft Excel. I’m not a huge fan of Excel, but that’s just me. My husband uses Excel all the time and loves it, so if you want to use Excel, don’t let my anti-Excel biases stop you. 😉
So there we go. I have my register updated, and I have a budget in place. I’m ready to take on the world! Well… at least my own family’s life. Hey, it’s a start.