Would you like to make the whole “money management” process easier for your family? Is this a stress point for you (like it was for me)?
We hope you’ll love this interview with Rachel Cruze, daughter of finance expert Dave Ramsey and author of Love Your Life, Not Theirs. We’ll discuss instant ideas that you can apply to your budget–and all the conversations and decisions that go with creating it! (See below how she inspired me to reorganize our budget categories!)
Our basic story is this:
For the first 17 years of our marriage, budgeting gave me a headache.
It wasn’t because I wanted to spend too much. And it wasn’t because I didn’t care. It’s just that budgeting dozens of random categories felt overwhelming–like I needed to be a fortune teller or something. And when the unexpected happened (pretty much always) and my numbers didn’t match up PERFECTLY, I felt like I had failed.
If I could go back to the night Eric and I got engaged (pictured here!), I would say, “April, listen to this recording and look over these screen shots from your future family budget. It’s not that hard. You’ll get better at it. But managing finances is an essential part of family life, and God has important things for you to do within your stewardship.”
Here’s what Rachel, Eric , and I will cover in the podcast:
- Rachel’s best advice for couples working together to establish a budget. She’ll share the key routines that will help you stay on target (she and her husband have been following this exact process for six years, and it works!).
- Eric’s perspective on “The 3 E’s” which explain the WHY behind his money-spending philosophy.
- Why we, as parents, can feel great about teaching our children about money–even if we haven’t done it perfectly in the past.
- How we can give ourselves some grace and time as we work to unify this process and system.
- How avoiding the “compare snare” is possible within our families.
- Why “giving” is an experience we want our children to have–and how to help them do this.
Would you like a peek into the current Perry Family Budget?
You may go through this process differently, but when I realized that the number of budgeting categories is what overwhelmed me, I re-positioned them into these four groups (using the YNAB software that we already had in place):
Things like paying tithing, helping those in need, and setting aside money for taxes happens right at the beginning.
(2) Expenses Already Decided
There are mostly utilities, insurances, and regular payments Eric and I feel good about for the time being and don’t need to reassess on a monthly basis. For irregular payments that happen once, twice, or four times a year, we add up the total, divide by 12, and set aside that amount each month.
(3) Expenses I Can Influence “A Little Bit”
I actually keep this section at the top of my budgeting software because I mostly only spend from this category. It includes food, household supplies, clothing, gifts, fun, and three different “discretionary” funds (Eric’s, April’s, and the Family’s). Not all of these are utilized every month, and money can easily be transferred between them. But this feels totally manageable to me, and it gives me a simple way to discuss purchasing choices with our children.
I realize that the topic of budgeting can feel painful. Unemployment, health challenges, debt, and heavy financial issues can weigh us down, and it might seem easier to ignore financial planning altogether.
But what I know is that when you face the situation, identify even one way you could move things in the right direction, and get your family on the same page, it brings relief, peace, and a knowledge that you are truly doing all you can.
I also believe that God wants us to be financially stable, and when we turn to our Higher Power for help, strength, and wisdom, it absolutely comes.
LearnDoBecome Challenge:
Take a moment to think about your current budget and identify just one way you could make the process easier for your family.
Show Notes:
YNAB.COM (The budget software April and Eric have been using–click here for your free trial!)
I adore YNAB! Without YNAB, I could point to literal thousands of dollars I simply would not have. I’ve successfully made YNABers out of two friends, my boyfriend, and someone I haven’t figured out yet. I am still using YNAB 4, but I’m keeping tabs on the newer version as it gains functionality.
Wonderful!!! Yes, we just recently upgraded but both versions are awesome. 🙂 Thanks so much!
What does YNAB stand for?
Hi Narda! It’s “You Need a Budget.” http://www.ynab.com 🙂
Wow I prayed on this & I go into my email & here this is totally relatable & on point ! We’ve been married for 14 years & been winging it . This relatable guidance is exactly what we need to get us on the right track! God is good thanks Eric & April I know this is our window of opportunity to finally stop making excuses & get this right for our family of 6 actually 8 if we include our moms who lean on us financially as well. I’m so fired up.
Irene, you inspire me! So happy this is helpful. You can absolutely do this!
This is a God-send…I am so excited to 1. actually do a budget!! and 2. organize it as you have. I think I was way too overwhelmed…this helps so much. Quick question – do you have a separate one, similarly organized, for your business? My husband and I also own our business together and finances have become such a weight on our shoulders. Thanks!
Hi Jessica! I’m so glad this was helpful to you. Eric and I have a separate budget for our business that we keep REALLY streamlined. We know what our monthly “burn rate” is for our business (what our basic costs are that we have to cover first each month), and then we invest additional revenue on marketing, education, training, etc., with a budget for things like travel, supplies, etc. We work really hard to keep costs low, but to also invest in resources that will help us to grow. Eric is awesome at this and has helped me so much. I still have a lot to learn. 🙂 I think setting up a separate YNAB budget within the account for business could be super helpful. Working on that side of things!
This was great! I am going to be applying the cash envelopes where we tend to over spend.
I like how you have been giving updates on how it is working in your own life. Thanks for sharing.
Great podcast! I am a personal finance coach (Dave Ramsey trained) and I teach people all the time how to use YNAB or EveryDollar (I personally like YNAB better, but ED is good too). I like how you have thought about how you set up your budget, April. The one thing I shivered at was that you have Giving and Taxes in the same overarching category! I like to keep things in similar categories and, while taxes are important, I don’t give them the same prominence in my budget! Giving is something I GET to do. Taxes are something I HAVE to do. I put the giving category at the top of my budget so as to emphasize the priority, but relegate taxes to a lower space. But I certainly wouldn’t want the categorizing to hang anyone up! The important thing is that you have a budget, you are following it and you are giving! (and paying your taxes.)
Thanks, Andrea! And what a fantastic way to think about giving! It’s so true that the way we structure our budget can speak symbolically about how we feel about the category. I’m going to make that change now. 🙂 So glad you are part of our community at Learn Do Become!
Hi Eric &April ,we have been married for 28 years and never had a budget, I wouldn’t know where to begin!!!!!is it to late we are both retired? We are paying for our sons collage.let me know what you think. God bless
Hi Lynn! So glad to have you with us at Learn Do Become! I personally think it’s NEVER too late to make improvements in our lives. 🙂 One way that might be easy to get started would be to simply start recording what you spend and looking at it with your spouse once or twice a month. You Need a Budget (ynab.com) has some great free trainings on budgeting, and there are TONS of great resources on the web for people starting out! Wishing you the best!!
I used YNAB for a few months and it just didn’t seem to work for us. I felt really burdened by entering in every single dollar we spent spending hours on it tracking down obscurely named vendors that show up on my card (oh wait, that was the farmers market vendor! Ugh). Then we went on vacation and I just rebelled against entering in every cent we spent on vacation!! I haven’t gotten back into it yet. But I know the system and it seems to work well for others. Just some questions- do you enter in every single purchase? Do you do this all day long as you make purchases or once a week at a specific time? Maybe too many categories is also overwhelming? I entered in many categories but maybe I need to generalize them more? Did that one step really help make the system more functional for you? Thanks!
You are hitting on some really important questions!
Big picture—that is generally how we budgeted when we were trying to get out of debt and hit our financial goals. At this point, with most of our children raised, fewer expenses, and a more solid financial situation, we review our accounts regularly and spend wisely, but we don’t have to micromanage every dollar.
However, back when I wrote that post, I did write down everything as I spent it (just took a second as soon as I checked out at the grocery store, etc.), but I only had to track the things that required decision making.
Generalizing the categories and getting all the regular purchases off my mind (because they were consistent and already decided on) helped me a ton because it reduced what I had to mentally process.
I think if you can look at your overall budget and shrink your “focus areas” to as few as possible, then tracking won’t feel so hard. And that information is super helpful.
I would also add that being creative and focusing on earning more (while being careful with your spending) alleviates the pressure faster. Sending lots of love!
thanks so much for your reply! I appreciate your help and all. you do.
When the discussion about how this isn’t taught in schools, yet it is used on a daily basis as young adults and all through life came up – I was like Yes! Why have we not included this in the curriculum?! (Like addressing an envelope! An important skill everyone should learn.)
I have the finance degree in my family and my husband struggled with credit card debt when I met him. We budgeted and planned as best we could back then, but so glad to see there are tools and discussions that will help our kids’ generation! Love to be able to share your podcasts with my children to put them on the path to success as I hear them. Great tips in here.