This is a guest post I wrote for my favorite Marriage Counselor Marie McKinney-Oates. She blogs on the regular (Unlike some people) and has some great content. Check her out.
When asked most people can easily list a few goals they have for this year. (Run a ½ marathon, Start a blog, Visit the beach. These are my actual goals.) However, most couples don’t sit down together and set goals together. It’s difficult because you automatically have someone who holds you accountable. Being a little biased, I think all couple should set at least one financial goal per year. Whether that is buying a house, putting an emergency plan in place, or planning for Christmas gifts, all good financial plans start with a budget.
The word Budget to most couples is like asking a man about his mother during you know what. It is a total mood killer. I will do my best to add a little life to this subject.
Create a Budget
S (specific) – Your mission if you’re willing to accept it is to begin tracking your expenses (i.e. Budget) and having a committee meeting by Jan 31st.
Having a budget doesn’t mean that you are saving 40% of your income and contributing to your Roth IRA. It simply means that you are keeping track of how much you are spending. I tell couples that the first month is to track your expenses. Don’t worry about making changes to your spending habits in the first month. Once you find out how much you spend at a certain eatery with golden arches you’ll change your behavior on your own. Isn’t that right, Marie! (Totally called out. I heart McDonald’s.)
M (measurable) – Having a budget and committee meeting for one month is the first step in a marathon. It is simple and very measurable however if you don’t make it a habit it’s going to be a long 26.2 miles.
A (agreement) – The purpose of having the Budget Committee Meeting is to allow both parties to have a voice and be in agreement. Budgets don’t work if one person is creating them and enforcing it on the other. Hint: Everyone has to agree on each line item. Everyone has to agree to spending 20% of your income on shoes/beer.
R (realistic) – Let’s be honest not everyone gets turned on by budgets and Excel spreadsheets (like I do). Talking financials and living on a budget may be the greatest turn on to one of you, but excruciating pain to the other.
My feelings were hurt by my wife when in the beginning she wasn’t as excited about budgeting as I was. I couldn’t understand why she was as elated to run the growth projection on our savings account with me. I had to be realistic. Although talking about finances doesn’t rev her engine, she is involved every month and that is more important.
T (time) – Most financial coaches will tell you “If you don’t start a budget today… Fire and brimstone to your first-born and you’ll have to eat cat food during retirement.” Yeah I think it’s a little too much also.
I like to put it this way. One of my goals for 2011 is to run the Music City ½ Marathon which is April 30th. Now I haven’t started training for it, which doesn’t mean I won’t be able to run it. It just means the difference between actually running it or heavily breathing and getting passed by senior citizens. If you want to you can wait to get you finances in control (or to start training for a ½ marathon). Its just the sooner you start the easier it will be down the road.
Practicing what I preach: For most of 2010 the Whyte household’s budgetary skills were on par with the US government. We were spending wildly and hadn’t had much plan for the future. In Q4 we regrouped and got back on track. We ended 2010 on a positive note hitting our savings goals and on a monthly budget. Continuing our momentum into 2011, one budget committee meeting down and just 11 more to go.
