Making Cents of It: 5 Ways to Simplify Budgeting

Several years ago I did a series on saving money entitled “Making Cents of It”.  Several years down the road, a mortgage, and a couple of kids later, I’ve learned and grown a lot in this area.  In an effort to share some of these lessons with everyone, “Making Cents of It” is making a comeback.  Look for a new post in the series every couple of weeks!

I’m going to be really honest…in our four years of marriage, Andy and I haven’t been the greatest at making and sticking to budgets.  If you knew my cheapskate nature, you’d probably find this surprising.  Before we were married, I had my measly income budgeted down to how many Starbucks drinks I could buy in a month.  Budgeting is a lot harder, however, when there are two people involved who don’t always see eye-to-eye.  Add in the myriad of unexpected expenses that spring up, fluctuating incomes, and little time to even balance the checkbook, and it can all become very overwhelming very quickly.  There have definitely been a few months that I’ve given up on balancing the checkbook and just find myself hoping that we don’t overdraw. 

The good news is, we’ve finally found a system that works for us.  Our checkbook is clean, neat, and balanced, and we are able to stick to our set budget the majority of the time.  What’s the secret?  Simplify, simplify, SIMPLIFY!  Here are some tricks I’ve learned to help us keep on top of things:

1.) Use cash.  For the majority of our marriage, I felt like debit cards were the way to go.  They made it easier to track where the money went, are accepted most anywhere, and get rid of the need for carrying around cash.  One day, however, while on vacation with my dad, I asked him why he insisted on carrying around and mostly spending cash.  His answer?  It made things easier. 
Easier?  I was a bit baffled.  If you know anything about my dad, you know that he is one of the most frugal and good-with-money people anywhere.  I would have thought he would have wanted to keep detailed track of where every cent of his money was going, but he didn’t.  He used cash for the majority of his spending, and he had no problem keeping up with checkbooks and budgeting.

In an ideal world, debit cards would be the way to go.  The problem they create in my world, however, is that every time I swipe that little card I have to enter the transaction into my checkbook (which I forget to do a lot).  Then I have to go back and go through all of the receipts and split them up into the different categories we budget for.  It takes a ton of time and it’s a pain in the neck.

We’ve since switched to a cash envelope system for most of our spending.  Twice a month I withdraw the cash I need and fill up all of our little envelopes.  I only have two transactions to log in the checkbook.  I don’t have to keep track of where I spend what, and when the money’s gone, spending simply stops.  It’s simple and easy and SO much more manageable.

2.) Have More Than One Bank Account. This one may seem counterproductive to simplifying things, but it’s honestly been one of the things that has helped us the most.  One day not too long ago, a friend of mine shared that she and her husband had two checking accounts.  One was exclusively for bills, the other for spending.  Every time they got paid, they deposited the money they needed for bills into the first account, and the leftovers went into the second account.  One quick check on her banking app and she knew exactly how much money she had left to spend without trying to figure out how much was needed for bills.

My husband and I have more than two bank accounts now, but they each have a specific purpose and they’re very easy to keep up with.  If nothing else, I recommend keeping two checking accounts and a savings account.  Save first, tithe and pay bills second, and then know that whatever is left is for spending.  It will revolutionize your budget.

3.) Have a personal spending allowance.  In a marriage where one spouse is a saver and one is a spender (which I’d venture to guess is where most marriages fall), this can be a marriage saver.  We both set a high priority on saving and getting out of debt, but in our marriage my husband is definitely the spender and I’m the saver.  For a long time, I tried to keep up with our different spending habits and budget it all.  Our clothes were all lumped together in one category…but then I found myself feeling bitter when my husband used the majority of the budget for the month on a new shirt.  I found myself getting angry every time I checked the bank account and saw my husband had made a fast food run.  Keeping up with the checkbook was frustrating because I was almost always missing receipts.  

Then one day I implemented a trick I learned from another friend.  She and her husband each got a set amount each month to spend however they chose.  At the beginning of the month, I withdrew cash for myself and cash for my husband.  We could use the money however we saw fit, whether that be for clothes, a snack, or haircuts.  The money was ours to spend, no questions asked. 

Now, I get frustrated far less.  I don’t have a clue where my husband spends his spending money, and I don’t really care.  I don’t have to ask him about a charge on our bank account, and I feel free to spend money as well.  It’s a win-win situation.  Give yourselves a personal spending allowance…it dispels SO much marital discord.

4.) Use Broad Budgeting Groups.  If you have time to split every purchase down into a small little subcategory, more power to you.  I don’t.  If you feel overwhelmed by keeping track of where the budget goes, my suggestion would be to group as many things together as you can.  Include stamps in your grocery budget instead of giving it its own group.  Same goes for toiletries or household goods.  Make one budget for entertainment or dates, and include everything that would be applicable (aka, movie tickets, snacks, food, bowling shoes).  If you really, really find yourself overwhelmed, just have one big budget for spending (using two bank accounts makes this work great).  Some day when you’re retired and have the time to figure out how much you spent on produce and how much on meat, go for it.  Until then, don’t make things more complicated than they need to be.

5.) Use (or something similar).  While I try to use cash for most of our spending now, there are still many purchases that show up on our bank statement.  For a couple of years, Andy and I have been using to keep track of our money.  It’s completely free and safe, and you can link all of your bank accounts, credit cards, and bills into it.  You can set budgets and goals, and track where your money goes.  I keep the Mint app on my phone so that I can quickly update things every day or so.  You can even choose to have them notify you by text or email when a bank account balance is low, a bill is due soon, or you go over budget in a certain area. 

In the technology age we live in, there are tons of free tools at our disposal like  USE THEM!  They will make your life SO much easier.

What are some of your favorite ways to simplify budgeting and stay on top of things?

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