Budget Update
I wanted to check back in about how our new budget monitoring is going. Here's the good, the bad, and the downright ugly.
- I am loving Mint.com. The app is particularly helpful because it is super easy to use on a daily basis to stay on top of our expenses. It doesn't always categorize things the way we want to categorize them (for example, it says P.Terry's is "fast food" and we just want to lump it under our general "Restaurant" expenses). Getting everything into the right category is integral to monitoring our budgets in the right way.
- In addition to categorizing certain expenses, I like to look at the bar graphs of where our spending is in relation to our budget for the month. It shows us whether we are over-spending based on where we should be or under-spending.
- Closely monitoring our finances is introducing stress into our lives. For example, Matt likes to eat out a lot (and we keep forgetting to turn on our crockpot in the morning), so our "Restaurant" budget is almost blown for the month. So I got frustrated when Matt generously paid for two other people's meals. His response was that budget monitoring was making me a "worse person". Ouch. I tried explaining that I was completely fine with being more generous in our lives, but that we couldn't be generous with money we don't have. Generosity without money to back it up = credit card debt. If we want to be more generous, then we need to allocate more money to particular categories where we want to be more generous (such as "Restaurants" if we want to pay for people's meals or "Miscellaneous" if we want to buy more gifts). I said I was fine being more generous but that we needed to sit down together and decide which category we wanted to take money from in order to be more generous. Do we want to travel less? Save less for retirement? Save less for our children's college educations? This conversation did not go well. It is yet another example of when my hyper-logic is too much for a given situation. Being an INTJ is the source of many strengths and many areas for growth....
- Now that I'm really getting to a good place with Mint.com, I think I want to go back in and upload our entire budget (right now it just has the pieces that we have the most control over). On second thought, that might create more work for me in terms of needing to correctly code every single expense. I think I'll just leave it as it is for now, since it keeps us focused on the purchases that can easily get out of control: restaurants, trips to Target, groceries at Whole Foods, etc.
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You know you can teach Mint.com to correctly categorize purchases, right? You can check a box to make P.Terry's always be "Restaurants." It learns your habits and after a while, there are way less corrections.
I do suggest you just make a blanket "Target" or "Whole Foods" budget. If you try to break down what you buy there by smaller category, it is too much work. Since you can buy food, clothing, pharmacy/health products at those stores, just lump it all as "Target" or "Whole Foods". Even though Mint lets you split up your purchases, it's a hassle.
Final tip, give Matt his own food budget. I do this for my husband, whose office is on top of his favorite salad place. We have a Sweetgreen budget per month. It works well!
My husband and I are going through a similar process. We started using Mint.com a few months ago, and it is great for paying bills, etc. but we've found that it really only looks backwards at what you've already spent. From the recommendations in the comments to your previous post, we've been taking a look at You Need a Budget, and I have to say that I'm quite impressed at how it is set up. Most relevant to your comments, though, is the fifth of the nine days of set-up emails. It basically says that in a marriage, before you set up a budget, you need to agree (and negotiate and compromise) on common short- and long-term goals that you are working towards together, and that sometimes you need to budget a small amount of "play money" to feel less restricted when meeting larger goals. The emails are part of the free trial, if you are interested.
Thanks, prettylittlemess! I'll look into it!
To those recommending YNAB: I'm having trouble understanding why you think it's better than Mint! A) It costs money. B) It looks like you have to manually input all transactions? That sounds awful!
Sorry, I should clarify. Mint is definitely useful, but we are finding that it works best if you also have a budget to predict where you need and want to spend your money. Sounds like you have this set up with a spreadsheet, but if it is something you need help putting together (as my husband and I do), YNAB is pretty helpful.
The manual input thing sounds scary, but they encourage the habit of writing down (anywhere, doesn't have to be their software) transactions immediately after spending the money. At the end of the month, it shouldn't take too long to tally things up.
Just a thought on Matt's generosity: My grandfather and grandmother owned a small business. They never made a lot of money (certainly not what you and Matt are making). They put there kids (and grandkids!) through college and grad school and owned their home. They didn't travel much. They wanted to, but they didn't. And they never bought much for themselves ever. Really, my grandfather would wait years to buy himself a pair of socks. BUT they always paid when they went out with friends to dinner. They loaned just about every person who ever worked for them money at some point or another. Sometimes they got paid back; sometimes they didn't. They never really made a fuss either way. This all hurt them financially. My grandmother's final illness (when she was only 60) didn't help either. But even after she was gone, my grandfather continued the way they always had: giving probably more than they had. Taking it from himself to give to others.
My grandfather died at the age of 84 in October. He had only $300 in the bank and a few life insurance policies. However, there were over 800 people at his funeral. I think he died a wealthy, wealthy man.
Thank you for sharing, Katie!
I realize how my story about Matt came off. I didn't mean to make it sound like I think we should spend all our money on ourselves or that we don't have enough money to share. We have a certain amount budgeted to charity per month. Beyond that, if we want to be generous with friends and family (which I totally support), we have to decide what we are going to pull it from. It might be that we don't travel as often. It might be that we don't buy things for our house. I'm fine with any of those answers, but my point was that we have to pick an answer. We can be generous with our money AND go on several vacations a year. Matt wants it both ways. He wants us to buy friends' dinners AND travel multiple times a year. He wants us to be generous with our money AND he wants new running shoes every other month. My point is that we can't do everything. If we allocate more money toward sharing (which I totally support), then we simply need to pull it out of another category. If we don't, we'll end up spending more than we have and that will lead to credit card debt.
Thanks for the clarification, Sarah! We create our budget categories in Mint (based on our spreadsheet). I used to do the manual input thing (years ago I used an index card to record every purchase), but I love that Mint tracks it all automatically. I just have to be diligent about logging in and making sure everything is coded correctly, but that seems easier than manually inputting everything. I would never be able to keep up with that!
Thank you for the clarification, Sara. I didn't mean to imply that I thought you wanted to spend all your money on yourselves! I just wanted to share a story about how there might be benefits from pulling some of that money from other categories. I mean, it's pretty unlikely that your old running shoes will come visit you when you are sick, but those you are kind to very well may. :)
I guess another thing to think about is the extreme examples you gave when talking with Matt about allocating your money differently. "Do we want to travel less? Save less for retirement? Save less for our children's college educations?" Of course you want to save for those things! So I could see how your partner would feel being bombarded with those examples rather than, "Well, what category should we put less in so we have money for treating friends?" Notice you didn't say (or at least, you didn't mention that you said) any less extreme categories like spending less on groceries or on clothes/shoes/etc. Anyway, something to think about...and something that I definitely have to work on myself--thinking about how to say something more diplomatically rather than jumping to extremes (which tends to not go over well with my husband).
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