It seems like a simple question, but it must be answered in order to show the value of a budget. To properly explain the answer to this question I want to go back and share our brief experience of living without a budget.

The setup

Smalls and I were a newly married couple. We had a fully paid for honeymoon and I had a few thousand dollars to my name. Smalls had about five thousand dollars that she saved over the course of the previous year. We combined our finances into a single bank account and we each had a separate credit card.

We moved to Texas and I didn’t have a job, just a few teaching interviews and a prayer. I didn’t get any of the jobs I applied for and was without work for about a month and a half. I finally got a job at a call center doing technical support for a cellular company. Finally, with two incomes it seemed like we could spend a little money. My pay was hourly but worked out to about 22K a year and Smalls was making 15K a year while getting her master’s degree. Our rent was $535 for a single bedroom, fully furnished apartment. We also adopted a puppy which we named Maggie after a week or so of indecisiveness.

The problem

Our first credit card bills as a married couple started coming in soon after moving down to Texas and all was well. We kept our spending down and knew that they would be a little high because of the honeymoon. We already have wedding money set aside for those bills and were not concerned with them.

The next month came around and we were shocked to see a $600 bill. $600 was more than my first paycheck and we honestly thought that the credit card company had made a mistake. We went through each item on the bill and added it all up and the credit card was right, we were wrong. And lazy.

The solution

After that first shock, we realized how easy it was to spend money and not understand how much we actually spent. We created a basic budget inside of Excel. All of our needs were put into one column and our wants in another. Our income was also put into the sheet so that we could see what our money coming into the house was compared to money going out.

Our Excel sheet was printed out and placed on the refrigerator. Every time one of us spent money, it had to be written down into the proper place on the budget. By and large, we discussed every purchase we made to make sure it was okay with the other person. Smalls was usually a little bit more tight on the budget than I was (and it’s still that way), but we were able to compromise and find something that worked for us.

Some thoughts

We make substantially more money than what we did when we were first starting out but our budgeting process has remained the same. We talk about the budget on a weekly, if not daily, basis and have adjusted things to make our life comfortable and well within our means. Having a partner that holds you accountable is an enormous blessing and the main reason that we are able to make a budget and stick to it. If you are just getting started with a budget, stick with it. There are going to be frustrating times, but it will pay off.