I have tried a few different budgeting programs and tools over the years to help us stay on track.  I started with Quicken and used it for a couple of years.  It is so exhaustive as a tracking tool and has so many functions and reports.  While I did like it and it worked great, it could get complicated.  I got so caught up in all the options and learning every function, that budgeting started to feel too overwhelming.

Then I tried Mvelopes from Crown.  Crown’s Money Map was one of the first resources that made me really think about having a true goal and direction in our money management.  Mvelopes uses a cash envelope spending principle as the basis for its budget tracking program. This online program is now offered free.  I liked how it incorporated online tracking with an envelope spending system.  You can still use your debit card and track the transactions by assigning them to the different categories in your budget.  I moved away from this system for two reasons.  At that time, it was a paid for service and we were trying to cut out everything that wasn’t absolutely necessary.  Also, we were not doing a good job tracking every transaction, assigning them into categories, and truly staying on budget.  Using our debit card was leading to overspending frequently.  We had a good plan but terrible implementation.

After getting some of Dave Ramsey’s resources in our hands, we really started talking about going to a total cash spending system.  So I pulled out an old Budgeting Spreadsheet that I had never really used.  It’s just an Excel spreadsheet (that can easily be used online with Google docs) that has a pretty good list of possible budget categories already listed and the formulas are already there to do all the math.

Just put your budget amounts into the Projected column, then put in the amounts you actually pay in the Actual column after you pay a bill or spend in that category.  (I only use a handful of the categories provided.  Most of my sheet is blank.)  So, now, my simple budgeting steps are:

1. Paycheck is automatically deposited into account with Direct Deposit. Enter amount into Actual column.
2. Bills are automatically paid with Online Bill Pay from my bank immediately after payday.  Enter amounts into Actual column.
3. Withdraw cash for spending categories on the first day of the month and put in envelopes.  Enter amounts into Actual column.
4. Transfer money into savings for any categories used for planning/saving.  Enter amounts into Actual column.
5. Then paycheck goes in again later in the month and our second set of bills go out.
6. At the end of the month, I just make sure all the budget categories have amounts in the Actual column so that everything is paid and handle any extra financial matters.  Then I go to the next sheet (tabs at the bottom) for the next month.

Mint.com - I have a few friends that use Mint and love it.  I’ve only heard good things about it.
Financial Notebook - This is a great guide to creating a Financial Notebook of your own to track expenses, set and maintain financial goals with Free Printable Downloads.


PAID Resources
Quicken - from $49.95 for basic software package. $9.95/month for Bill Pay add-on
Dave Ramsey’s Online Gazelle Budget - 7-Day Free Trial, then $9.95/month or $89.95/year
Dave Ramsey’s Total Money Makeover ($16.49) and Workbook ($12.89) – Everyone I know that has read this book has said their perspective and practice in money management has been drastically changed.

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This is a part of a week long series on budgeting.  Check out the other posts.
Budgeting Part 1 – Why Have a Budget?
Budgeting Part 2 – How to Set Up a Monthly Financial Budget
Budgeting Part 3 – What Do I Do With My Debt?

I also want to say that I am in no way trying to represent myself as an expert of any type in this area.  I have had to work hard with this because, while I am a natural planner and detail-oriented person, I have not always exercised discipline or wisdom with my money.  While I am not a big spender or much of a shopper, I have made impulse purchases that I really didn’t have the money for.  Dee and I both came into marriage with lots of debt.  With credit cards and school loans combined, it was over $45,000.  And I am embarrassed to admit that while we were paying down some of that debt, we were also adding to our debt by continuing to use credit cards.  It was never frivolous purchases, new cars, or big vacations.  Most of the time, it was things we really thought we needed that we hadn’t planned for.  I was consistently pushing us to use credit cards more to get bonus points or frequent flyer miles, always intending on paying off those purchases immediately, but never really doing it.  We invested about $8,000 into a business that failed within the first six months that left us with nothing but some good lessons learned and that debt to pay off.
We have changed a lot of our financial habits.  It has taken a lot of communication and a lot of mistakes.  We have evaluated our financial state so many times, planning and adjusting to new bills, different income, or different needs with our growing family.  So, we are still right in the middle of this journey, still learning.  So far, here are the things that have helped us the most.

1.  Stop using credit cards.  I really thought I was disciplined enough all those years to use my credit card wisely, paying off purchases to not rack up interest while getting rewarded to use it with cash back or frequent flyer miles.  It took me way too long to see that it would have cost me far less to just save over time to buy those plane tickets.  I used to think I really needed a credit card on me at all times in case of emergencies.  All of it just led me down a path of racking up more and more debt.

2.  Use a cash spending system.  I have tried a few different online budgeting systems that I really liked and worked for us for some aspects. (I will be listing various resources and ways of budgeting tomorrow.) But above all, the system that has worked for us and kept us actually living within our budget is operating on a cash envelope system.  Every month after our first payday, I go to the bank and get out enough cash to cover all our monthly amounts for groceries, eating out, personal care items, and gas. Each category gets its own envelope and that’s what we use for all spending the entire month. The key with this is going to the bank at the very beginning of the month and to put away our debit cards. We don’t always do this as faithfully every month, but the times we do get away from it and start using our debit card here and there is usually when overspending starts.

3.  Pare down.  Interestingly enough, as our family has grown and our needs have increased, we have had more unexpected hits to our checkbook and cuts in our income. We have had to trim off any and all fat from our budget. Some of the cuts have been obvious and simple and other cuts have been painful. We don’t have cable TV or a landline. We share a car now after our second car died and we knew a car payment was out of the question if we were truly trying to get out of debt. We have small budgets for groceries and eating out.  We don’t buy each other gifts on holidays (except our kids). We have gone back and forth with technology decisions, whether we have internet or smartphones. We have used alternative health insurance for me and the kids with less coverage. We use Google Voice for free text messaging.
These decisions look different for everyone and I am not saying paying for any of these items is a bad thing. It’s just some examples of decisions we have had to make.

4.  Follow Dave Ramsey’s The Seven Baby Steps.  We haven’t taken Dave Ramsey’s Financial Peace University course, but a friend gave us their course material and Dee listened to the CD’s while I browsed the workbook.  Even that little exposure was super helpful to get us on the right track.  The Seven Baby Steps are so helpful when your debt can feel so overwhelming you don’t know where to start.  Following a budget with a cash system and using these steps has made all the difference.
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What’s the hardest part of paying down debt for you?  What have you done to help along the way?


Come back tomorrow for resources and programs to manage your budget.
This is a part of a week long series on budgeting.  Check out the other posts.
Budgeting Part 1 – Why Have a Budget?
Budgeting Part 2 – How to Set Up a Monthly Financial Budget

Here are the main goals, in my opinion, of using a monthly financial budget:

• Spend less than what you make. I know this sounds obvious, but this is a basic principle that we violate too often.  And we need to make a plan to ensure we live within our limits.
• Pay all bills and necessary expenses in full and on time.
• Be able to allot money for specific funds like:
• Things you want to purchase (paying cash for a a piece of furniture, a car, a trip, etc.)
• Irregular expenses (vehicle registration, gift giving, HOA fees)
• Unexpected expenses (home/car repairs, medical needs)
• Giving to causes you believe in (ministries, social justice organizations, or individuals in need)

1. Start with your monthly income.  This is your first number from which all expenses will be deducted.  If you get paid on a different interval (weekly or bi-weekly), figure out a monthly amount just to set up your budget.  Later in the week, we will look at more details in setting up the timing of when different deductions should be taken out.

2. List your monthly bills and deduct from your income amount.  These are just your regular, mostly set amount bills that you pay every month.  Here are mine:

• church giving/tithe
• mortgage
• gas
• water
• electric
• cell phone
• internet
• school loans
• car insurance
• life insurance
• credit card (due to be completely paid off in April, the first time in our 8 years of marriage!!)

3. List your monthly necessary spending needs and deduct from your income amount.  You need to determine an amount for each category.  This can be challenging if you’ve never lived on a budget before.  The best way to determine these amounts is 2-3 months of tracking every expense.  You can always go back in your account online and designate your transactions into each category to get an idea of how much you have typically been spending.  Here are mine:

• gas
• groceries
• eating out
• personal care

4. List your irregular bills/expenses, divide them into monthly amounts, and deduct from your income amount.  We usually have bills and expenses that aren’t due every month or just pop up periodically.  I would recommend dividing what’s needed to pay for these things into monthly amounts where you can put back a little each month.  This really helps to not get caught off guard with a big bill due and no way to squeeze it in that month.  Here are a few categories that I have had through the years:

• Gift giving, including Christmas
• Vehicle registration and taxes
• HOA dues

5.  List the things you need to put back for/plan for and deduct from your income amount.  These can be things that happen unexpectedly like car repairs or medical bills, but it can also be purchases you are planning for in order to not go into debt.  You may be planning to buy a car or another big item or just something you want to buy that you don’t have the money for right now.  You’ll need to designate a monthly amount for each of these items.

• Car maintenance
• Medical expenses
• Home maintenance
• Making a purchase you need to save up for (like furniture, appliances, moving expenses, a car)

Dave Ramsey has a helpful online tool that gives recommended percentages for each budget category here.  You enter your budget amounts and it quickly gives an assessment if you are allocating too much for any category.

This is not always an appealing topic for lots of reasons.  Have you heard or said any of these for why you may nothave a budget?

• Budgeting is too limiting. What if I don’t have enough in one category & I see something I need or want?
• It’s just too much work to keep up with every expense.
• I don’t want that much accountability.
• I do just fine checking my balance at the ATM or online to spend what I need.
• I’m not mathematically oriented.  It’s just not my thing.

I have heard these reasons and I have said some of them myself.  I have not always been diligent in keeping up with my expenses and I have paid for it, literally.  My practice in budgeting really began about 12 or 13 years ago when I was working for a college campus ministry.  We raised all of our salary and I was very aware of every dollar.  I felt very accountable about the money I made and how I spent it since it was directly given to me by others.  I had to fill out a budget in order to set a support goal.  While there was freedom in being able to raise what I needed, there was also a great awareness that in order to get that pay, I had to actually raise it all.  And this was not a goal that was easy or quick to attain.  Even with all this, I was more aware of how the money came in than how it went out.  I wasn’t as faithful as I should have been in watching where and how I spent my money.

Years later, living in a different season of marriage, working non-ministry jobs, owning a home, and having kids, a budget continues to be necessary to make sure we have enough to pay the essentials – tithe, mortgage, utilities, food, and gas.  We’ve had months of being able to budget and put some money back for irregular expenses like home repairs, car repairs and taxes.  But we’ve also had months of only being able to pay the essential bills and then looking at what we have left over to make it through the month for gas and food.

Currently, I feel such freedom and security in having and regularly using a budget.

• I can be faithful in paying my bills.  I don’t feel caught off guard when my bills come in because I’ve already thought about how they are going to be taken care of.
• I can pay off debt.  Living on a budget has been the number one thing, outside of God’s daily help, to help us on the road to getting out of debt.  We are really close to paying off a huge chunk of debt that has lingered over us for years and it so exciting!  There is so much more to say about this area and I will share more details later on how we’re doing this.
• I know what I have to spend.  I can make an informed decision about a possible purchase because I know exactly what I have and how long it has to last for a specific category.  My perspective has shifted over the last few years from “How can I get by with only this much?”  to “We get this much to use for what we need?”
• I can prepare for the future and for the unexpected.  We haven’t always been in a place to be able to set aside money for unknown expenses or future investments, but it’s nice when we can.
• I am free to give to others in need and to causes I believe in.  I know how much is there to give and when I can possibly give more or to different needs.  There have been times when we have “extra” money come in and I feel so excited to figure out who to give it to.  These are times when we haven’t had any unexpected expenses and I know all our needs are covered, so we can joyfully just give it away.
• I know where my money is going.  I hate that feeling of “Where has all my money gone?”.  Then going back to look at it and seeing that it was in small purchases over and over again that I didn’t think would really make a difference.  This also really helps to catch merchant or bank mistakes if they should ever happen.

I want to add sort of a footnote here to say one huge thing I have learned over the years is I am not in control of my money no matter how meticulously I count and allocate every penny.  We have had times when something huge breaks that we have to repair or replace and all that “extra” money is gone again.  We’ve also had times where jobs or paychecks change drastically without notice and I honestly don’t know how we’re going to make it through.  My real security is not in diligently implementing a spending plan, but in God who gives and takes away for reasons that I don’t always know.  He is the provider of all our income and I am called to just be faithful with what He gives me.

This entire week is dedicated to posts about budgeting, so come back every day for more tips and let us know how you do it!
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