The Monthly Budget and Me

Once again I will be coordinating Dave Ramsey’s Financial Peace University at our church. This course and many others recommend that the student prepare and live within a formal monthly budget. The only time in my life I have actually used a formal budget was during the time I was teaching this course. I am not going to tell someone else to do something and then not do it myself. I have wondered how I managed to do OK without this structure in my life. A formal budget is really the way to go particularly if your family is experiencing financial problems.

First, for some reason I seem to be able to carry more facts and numbers around in my head than most people. Back in the day, when car insurance was a big deal, I knew that I was going to be hit in January and July. I knew how much I was going to need and I socked away a little extra every month so it would be there when I needed it. I also could pretty well guess what the utilities were going to do to my pocketbook. Summer in South Carolina could really run up the air conditioning bills.

Secondly, I was raised with a pathological fear of debt. When I was a child my mother would give me unsolicited credit cards my parents had received to cut up into little pieces. She told me they were evil and dangerous. I heard the tale about how my grandmother nagged my grandfather into paying off the mortgage on the farm when all his neighbors were borrowing to expand their operations. My family was one of only two in that part of the county that held on their farm all the way through the depression. When the time came to buy cars or go back to school, the idea of borrowing money simply did not enter my head. It was just something people in my family didn’t do.

Years later when reading about sociological studies of successful people, I learned that such people focus relentlessly on the bottom line. They are intently interested in whether their net worth is headed up or down. They check it every month. If it is headed down they take action. I did that even when I didn’t have enough money to bother tracking. Rule 4 from my Basic Financial Rules for Young Couples states, “When your money stash is declining (and it will) find out where your money is going. Keep detailed records (every penny) of your expenditures if necessary. My wife and I did this twice during the early years of our marriage. It proved a very enlightening exercise.”

Finally, I think it was the Grace of God that at the beginning of our marriage I insisted on no your money and my money, only our money. We only had one check book and until I was 35 no credit card. By that time living without a credit card had become ridiculously inconvenient. Rule 6 states, “No secrets. If you or your spouse spends more than the cost of a CD or a paperback book on something, decide on that expense together, as a couple. There are exceptions. My wife does not want to know about the power bill, tires on her car, or specialized tools she does not understand. Set your own rules and limits for your own marriage and stick to them.”

This approach has worked very well for a long time. However, there is a new challenge on my horizon. A year from now I hope to be retired. Instead of a regular paycheck, I will be living on Social Security, a small pension, and my investments. I think until I am comfortable with that new life, I might should better, prepare a monthly budget.