Budgeting the Jodie Way

Okay.  Budgeting. A word most people love as much as dieting because they both require some pre-planning and discipline.  I’m only really great at the pre-planning part. The discipline part hurts.  LOL

I want to start by saying again, I am no financial expert.  Seriously. I’ve had no training in this area other than some really tough OJT.  The school of hard knocks I suppose.  So, with that said if you are some financial wizard with a degree in finance this ain’t the blog post for you.  Also, for everyone else… please know this is not scientific (lol) so take any tips that help you.  If you need real help with finances, please consult someone who knows what they are doing. 

As many of you know James and I started life out together with pretty much less than $1.00 in our checking account that first week back from our honeymoon.  Neither of us had been taught a lot about budgeting.  My parents never budgeted (and it showed).  James parents did, but he relied heavily on them to take his check, pay for things, and give him spending money.  That worked really well for him as a young man, but after we married it was difficult to put all the pieces together, not to mention we were poor, so the pieces were limited.  This is also why I am very passionate about teaching Hannah.  She knows our income.  She knows our bills.  She knows how we budget and why we do it. 

Fast forward twenty years, a lot of unexpected catastrophes from illness to job loss and a lot of successes we have been able to learn the importance of budgeting and really what works for us. A few things in my budgeting is from Dave Ramsey’s plan.  However, zero balanced budget is very rigorous and hard to stay consistent with.  Again, it’s like being a strict diet.  You feel like if you mess up one time then to heck with it! So, I learned for us that slow and steady would win the race.  I will say that if we do make a credit purchase, which Dave’s plan frowns upon, I will go into a temporary “snowball” mode to pay if off as quickly as possible. Overall avoid credit, but it is a part of our society and most people do utilize it. So instead of just saying, “You suck if you have a credit balance” I say just be smart.  

James and I get paid biweekly on the same day.  I used to hate this because at one time we were paid opposite, and it felt like it was “easier” to pay the bills that way.  It really wasn’t.  It just helped me to be more disciplined with our spending because I didn’t have it in the account all at once to spend.  I know that sounds horrible, but it’s true.  Being paid all at once can lead you to have a big lump sum in your account and that makes you feel more comfortable splurging.  So, because of that behavior I had to really sit down and look at a bigger picture.  Again, with no experience that can be hard.  Like when someone tells you to “just push away from the table” when you voice a need to lose weight; one might say “just pay your bills”.  Well, it takes a little more planning and again discipline to do that in a way that will serve your family in the long run.

That is really what it is all about.  Serving your family.  I have horrible anxiety.  I think in a way that condition serves me well when it comes to money because I am always prepared for the worst.  Seriously, I think about loss of job, illness, and death on a daily.  So, when I go to purchase something, I factor in the anxiety that will accompany the monthly payments and that keeps me in check. James doesn’t share this with me.  LOL.  He is more of a big item spender.  I am more of a “piddler spender”. I will $5, $10, and $15 us to death.  Sometimes I wish I was more like him because at least he has some cool new gadget to show for the money he spends.  I have a room of old lamps.  Seriously.  It is important to assess your relationship with money.  What kind of spender are you? What are you okay doing without and what is something you are more impulsive about? For me, travel is huge.  Like I become a millionaire if the topic of planning a trip comes up.  Sure! Book the condo! Book the flight! Just do it! Lets see some place we’ve never seen before, I say while wearing my 10 year old jeans, Wal-Mart t-shirt, and off brand Toms I got at Target on clearance.  You see I could care less about name brand clothes.  I’ve come to understand these habits about myself, James, and Hannah.  They know mine.  This way we can all three keep each other in check. 

The last thing I will talk about before sharing the budget is the allowance.  This seems to intrigue most people who know we do this.  I must give credit where it is due.  Cornelius Hall is the person who started me on allowances probably 16 years ago.  I was working as a Case Manager, and I am sure I was complaining about my husband purchasing something I hadn’t budgeted for back in the days when a bottled drink purchase would have put us in the negative! LOL.  He turned around, in the most Cornelius way, and said, “Jodie a grown man who works shouldn’t have to call his wife for permission to buy a coke.  The same way you should have some money that is yours too”. He went on to explain how he and his wife would budget an allowance each week.  That money would be like a recurring bill they factored in up front.  They cash is withdrawn, given to that person, and they do as they choose with it.  It was genius! So, we started this, and it really made a huge difference.  I think only last year did I give us a cost of living raise.  Also, this helps to cut down on a crazy bank transaction register/ statement.  That log should be as clean as possible so you can really see where you are spending your money outside of bills.  I promise when you start the allowance, you will quickly see where you are bleeding money… it’s the small purchases that add up.  

Okay the budget (Jodie’s kinda made up method):

• Add up ALL your expenses. Note I didn’t say bills.  You need to sit down and do an honest calculation of every single penny you spend.  Include your recurring bills, utilities, living expenses, right down to the toilet paper.  This may hard as you’ve always just bought these things without really considering the cost.  I mean everyone must have TP, so why stress over it.  Well, you need to know how much it cost you to live… ALL of it.
• Determine your bring home.  So, this can be hard as well.  If you are salaried you pretty much know your bring home.  If you are hourly and have the option to work overtime, it can vary.  James works a lot of overtime.  My method here is that we only use base salary.  I never project a budget with overtime factored in. More about projected budget soon.
• The next step when you first start is a little scary.  What is the difference?  Are you bringing home more than you are spending?  Seems like a crazy question, but if you’ve factored in everything you will notice that the number you thought were your bills is a lot less than your actual expenses.  If you then go back and add up all the small charges you aren’t accounting for on top of that your difference in bring home and spending may look bleak.  Don’t worry… slow and steady wins the race.  If that number is not what you want it to be you need to go look at everything that is not essential, all the unaccounted for spending, and anything else you can remove from the equation and do just that.  Stop it.  Stop the cable, stop the Netflix, stop the in-app purchases and movie rentals.  Stop the fast food.  Just stop it all.  It sucks and your family will hate you.  Welcome to budgeting. LOL.  It is only temporary as you get your hands around things. 
• Once you have your numbers and you’ve eliminated the unnecessary spending you need to come up with an allowance for each family member.  That number is up to you according to the amount of money you have to work with.  You may start small then give raises for financial milestones met.  Make it fun (as fun as possible).  The allowance will give some freedom back to your family members and will make budgeting easier for you in the long run as you run your numbers with each session.  This is so important.  IF YOU SPEND YOUR ALLOWANCE YOU GET NO MORE UNTIL THE ALLOTED TIME.  PERIOD. So brown bag that lunch and drink from the water fountain.  Eventually you will learn to make it last. 
• Set up a schedule that you will budget.  I do this bi-weekly on payday.  
• For this process I do the following. I have a mutli-tab spreadsheet.

• Tab 1 is all our expenses and their due day each month; if it credit I have a pay off amount and projected pay off date with it. This lets me know where I am at with paying things like our house and cars off completely.  It helps me to determine where I want to put extra money for fast pay off.  DR will always encourage you to choose the smallest amount to pay off first regardless of interest.  In most cases I agree with that. I gray out any loan/ credit line I’ve paid off, but keep it visible as a reminder to not partake in credit… It reminds me of the hard work I put in to eliminate that bill which encourages me to keep my money in my account😊

• Tab 2 is a ledger that I have formulas set up on.  I basically have formatted this sheet to currency and can easily add my + and – amounts to easily balance my funds each session.  At this point I am aware of what I have in my checking and when I can make an extra payment towards a credit line and/or move money to savings.  I like to keep a certain amount in the checking account for easy access

• Tip: If you suffer from poor self-control, as most of us do, do NOT link your savings to your checking.  Make it really hard to get to your savings.

• I also project two weeks in advance on this tab.  I keep it at two weeks because moving out past that the numbers start to be a little off and you don’t want to give yourself a false sense of security; especially until you adjust to budgeting. You will not meet budget at first, folks.  It will take some adjustments so be patient. 

• Tab 3 long term projections/ goals.  This tab is a little more removed from reality.  But it gives me a goal to shoot for.  So, if I follow a strict budget, I could be here in 6 months to a year.  It can help with long term debt pay off plans and also helps you to see where you need to be if you are saving for something like a family vacation (please budget this in… yes add it up, and break it down to a monthly payment so you have cash to pay for it- If possible. If not just plan for any credit you use in your long-term plans).

• Tab 4 overages- more to come on that

• Each budget session you will:
• Review your projections for the period
• Input the actual currency amounts- bring home and expenses for the period
• Pay all the required expenses for the period
• Make a determination of any extras you want to pay (if you can) and/or move money to savings
• Update your projections for the following two weeks
• VERY IMPORTANT- calculate any overages or unplanned expenses for the budgeting period
• Input those into your overages tab line by line and label them (food, entertainment,
• Sort and group them to determine how much you went over your projected budget and on what
• This allows you to start seeing where 
• UNPLANNED money is going so you can hold yourself accountable and stop.

That is it.  I think.  I hope this helps.  Remember that it will get easier with time.  As you get disciplined and pay things off you will have more room to wiggle.  You will start really appreciating being proactive and not reactive to things.  When you get comfortable then consider investments and such.  

Also when you can…use your 401K, HSA, and GIFT plans if those are options for you.  These really help put money away pre-tax and keeps it earmarked for important things that you need in life. It may take a little time, but those should be “next steps” before investments and such. 

Expenses/ pay off plan tab

Item	Due Day	Payment Amt	Type	Pay off Balance	Payoff Plan
House	1	$x.00	Mortgage	$x.00	15 years
Car	10	$x.00	Vehicle	$x.00	2 years
Entergy	15	$x.00	Utility	NA	Recurring

Ledger

Date	Item	Amount	Balance
10-Dec	Income	($x.00)	($x.00)
12-Dec	Expense	($x.00)	($x.00)
14-Dec	Expense	($x.00)	($x.00)
16-Dec	Expense	($x.00)	($x.00)

The goal sheet is a combination of the two with associated goals. 

Overages- this may be a movie rental, grocery budget overage, or fast food, etc. 

Amount	Type
5.38	Entertainment
2.99	Entertainment
15.38	Food
16.11	Food

So here you can group and see trends in your unplanned spending. You can do by period, month, quarterly, etc.

I do charts, but Im a bit of a nerd. Sooo… I’ll skip that part. LOL

Happy budgeting. 

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