by Sarah Adams -

How To Have A Balanced Household Budget Every Month

Trace regularly refers to me as our family’s Chief Financial Officer, and that I “control” the finances. Actually, we do our overall budgeting and planning together; I simply take care of the day-to-day bills as well as maintain our financial spreadsheets (aka all the work).

For various reasons we both came to the relationship with more debt than either of us liked. However, early on in our marriage we agreed that a mutual goal was to be debt-free. I wanted the peace of mind of not constantly playing catch-up and Trace felt like getting out of debt should be a primary goal for any prepper. In the beginning we tried to save, tried to pay down debt, but we struggled without a concrete strategy and plan. Then, about 18 months ago, a good friend of mine introduced me to Dave Ramsey and his “Seven Baby Steps”. I really liked his “debt snowball”; it inherently made sense to me. In addition, his concept of spending money “on paper and on purpose” helped give me some focus on how we could move forward. From there I read more about zero-based budgeting.

Since December 2010 we have created a zero-based budget every month. I start with our joint income and assign each dollar a “job”. Before the month even starts we have “pre-spent” every dollar we are going to make. It sounds a bit scary, even a bit controlling, to budget this way but to tell you the truth it is completely freeing. When we go to the grocery store we know exactly how much is available for the month; we can spend it all the first week or spread it out over a couple of trips. There’s no worrying about whether the funds are available or not – they ARE, this is their job!

Even better, you can plan for fun too. Last year, when we had a family trip scheduled, I started budgeting a couple of hundred dollars into a vacation fund each month. By the time we took our trip we had plenty of money set aside, allowing us to play while not worrying whether we’d be able to pay the bills when we got home. It was one of the most relaxing trips, money-wise, that I’ve ever taken.

Instead of feeling restrictive, budgeting this way has allowed us to do and buy things that otherwise might not have been possible. We’re building a greenhouse this spring. Last month we assigned some money for it; turns out that didn’t quite cover the full cost so this month we’ve assigned a bit more. Trace wants to build a rabbit hutch; I’ve got it on the list to add to the May budget. It may mean we allocate less to Costco or entertainment or somewhere else, but because we both review the plan each month and talk about our desired expenditures, it works out well.

The other strategy that we both like is to use cash as much as possible. I do pay most of our bills online, but other than those and buying gas, most of our expenses are paid with cash. Instead of the traditional envelope system, I use a receipt folder; each slot is for a different category (Haircuts, Groceries, Costco, etc.) and I put the total amount budgeted for each category in the proper slot at the beginning of the month. We’ve both found it’s a lot harder to hand over five $20s than it is to hand over a debit card. Each purchase is that much more deliberate. And, from a prepper point of view, this means we always have cash on us in case of a disaster (i.e. the power is out at the gas station, you can still pump gas, but they will only take cash, allowing us to fill up if necessary).

Money is a tough topic for many. When we don’t have enough it’s scary and when we have plenty, well, no one wants to hear about that! Trace and I have found that working as a team to plan, budget, and spend has made money simply another prepping resource.

(Friday: What We Did This Week To Prep)

My wife Sarah writes, from a prepper’s wife’s point of view, ‘Sarah’s View’ the second Wednesday of each month (see her bio, and the posts she’s written, on the Guest Contributors page).