February 6, 2012

Back to a Monthly Budget and Other Budget Changes

One of my most popular blog posts and the oldest one still currently in the top ten most read is No More Monthly Budget. I'm sure we scared a lot of people with that title. What? No budget? If you haven't read the post, what we did for 2011 was track our budget in periods based not on calendar months but on thirteen periods of four weeks. Since I'm paid weekly and Nathan is paid every two weeks, there can be quite a variation in income from month to month. With four week periods we would have consistent income (two of Nathan's paychecks, four of mine). It sounded good in theory, but it only took a few months to realize how inconsistent income really is. Although we kept with it for all of 2011, for 2012 we're going back to monthly budget periods. We've also made a few other changes to the way we budget that should work better for us.

A monthly allowance
A new budget category is an allowance for each of us. For the first year and a half of our marriage, we basically had to discuss every purchase with each other. And if one of us made a big purchase, that meant the other had to curb his/her spending for that budget period. To help eliminate some of this, we've now budgeted a small amount of money for each of us to spend each month however we choose. If Nathan wants to eat out for lunch, I can still buy shoes. We still have a "General Spending" category for purchases that we agree to make.

A dates category
Last year, we lumped all eating out (lunches during work and dates) into one category. We also had a separate entertainment category. We've now eliminated "Eating Out" as a separate budget category and made it a sub-category under our allowances and under a new "Dates" category. We've also made "Entertainment" a sub-category under "Dates."

Adding "rollover" money
What we did last year if we had money left over in different categories, was put the leftover money into paying off debt or our emergency fund. Now, if we have $7 left in the date category at the end of the month, for example, that's money we can still use for dates next month.

A new budget system
We track all of our spending, income, and bank accounts in an Excel program Nathan made. Last year we had a separate spreadsheet for each budget period, but this year Nathan made one Excel file that we can use for all our financial tracking for the entire year. If anyone would like to know more about our system and how Nathan programmed it, I'm sure he'd be happy to explain it.

Here's what the big picture looks like for February. That big chunk we're putting towards student loan payments still isn't enough to keep us on track with our goal of paying them off in two years, but it's close and there's not much else we can cut. I said it was an ambitous goal!

What changes have you made to your budget to make it work better for you?


  1. I really like how you've broken this down. Unfortunately, too, for us is the tuition payments. If we could just get that outta the way!

    1. Yeah, I wish Nathan would find a cheaper hobby. ;) But maybe someday we'll see a return on that investment...

  2. this year, i decided to go by pay periods rather than months. we haven't had any extra income yet, but if we do happen to get some sort of windfall, like a tax refund, it would most likely go to an emergency fund.

    budgeting can always be improved. there's a huge learning curve to get it right.

  3. I tagged you in my most recent blog post. check it out!


Let me know your thoughts on this. I love reading all my comments!