{Budgeting your family’s money, part I}

Budget, noun: an estimate of income and expenditure for a set period of time.

No, don’t run away. Come back here — budgets are actually incredibly awesome and not that hard. Honest! Remember how I quit my day job 3 months ago to sew on Gussy exclusively? Yeah, that was because Zack and I made a family budget and stuck with it!!! When you create a budget you KNOW where your money is going and you TELL your money where to go. It’s a super awesome, powerful feeling.

Yay, budgets :]

Besides, I don’t want to be slave to a paper bill. I want to be a princess. That sews all day long because she wants to. Amen.

It’s OK if you’re scared to write a budget — sometimes Zack and I are scared to write a new budget when we get off track or our income changes.

But guess what? Non-budgeted money is even scarier — it can take you on a wild roller coaster and it’s like a dirty pile of poo if you aren’t the boss. Zack and I have Dave Ramsey’s The Total Money Makeover, but I’ll be honest: it took some convincing to get me on board. Having read about the benefits of living as a cash-only family, I can now say that this book has changed our lives. It taught us many things, the main thing being no debt!

{woo hoo! quick skip around the apartment!}

Zack and I were 23 and 22 when we got married — we were young {we still are young :] } so we weren’t fully molded in any one way, especially when it came to money.

Money could have wedged itself between us and taken us on a wild roller coaster. Actually, if we had been open to debt I can’t imagine where we’d be right now, because shortly after getting married {ahem, 7 months later but I’m not counting} we BOTH lost our jobs. It was horrible but amazing, intertwined as one. Have you ever been suddenly unemployed? I have. Ewww. And I say “ewww” because not having a job can make you feel icky about yourself as your income is now dropped to 60% of what was and you wonder “How God..? Where God…? When God…?” And then the low self-esteem sinks in, and that’s icky.

But guess what {again}? God doesn’t want us to feel icky because He has great plans for us.

He also wants us to put our money to good use, to use it to do great things for others and for God. And I’d like to take a moment to say that I have had credit cards {sorry Mom!} but that was in college {Mom, don’t be mad} and they are now paid off. But… what did I buy with those credit cards?

I have no clue!!! Again, that’s icky.

I found this bible verse and it reminded me of how debt can easily multiply because it becomes something we hide/deny {from others or ourselves}:

Isaiah 29:15 (NIV)

Woe to those who go to great depths
to hide their plans from the LORD,
who do their work in darkness and think,
“Who sees us? Who will know?”

Back to my original point here…
Although Zack and I both had a little debt going into marriage, we joined our bank accounts blending our incomes as one, and committed to NO MORE DEBT.

I know I don’t fully understand how powerful NO DEBT is… I don’t, because we barely dipped our fingers into its poison. But we currently don’t experiencedit because we have chosen to never allow ourselves to experience it again.

We like to think of money as a tool that belongs beneath us — we are in control, not it.

I wrote the other day about updating our family budget {we are moving soon so we have some new numbers to play with} and starting a budget for the business. Some of you asked to share some tips and I’m happy to help :]

{photo credit}

A few months ago I wrote a post explaining how I quit my day job to work on Gussy exclusively, but this time around I want to elaborate more on the financial side of it.

How to save money, fast!

Zack and I spent a few months leading up to my quit date saving money for a “Gussy Quit” fund. We worked up a budget that allowed us to take every single non-critical dollar and put it towards a savings account. I also put the majority of all Gussy sales into this savings account. This method allowed us to save money fast.

We knew exactly how much money Zack and I made each month, and we had a really good estimate of what Gussy brought in each month. We also new what all of our monthly expenses were.

To save the most, this is what we did:

Each pay period we mapped out every bill that needed to be paid before the next pay period came. If we had ANY money left over it went to the “Gussy Quit” fund. By repeating this method every 2 weeks we were able to map out the next few months. We had a very good handle on what our expenses would be, which was key to settling on an end date. This method also allowed us to make a chart, which we called the Count Up/Family Goal, and it was so encouraging! We could see that in two weeks we’d have ____ saved, in a month we’d have ____, and so on. I made a little box in my sidebar and kept track of this “secret” Count Up/Family Goal. Every time we added to our savings we increased the number in the box.
To further encourage this “Gussy Quit” fund I would challenge myself to increase my Gussy sales. All money brought in that was in addition to what I needed Gussy to bring in was like a little bonus to our savings account.
…And you can imagine I did a double skip around the apartment when that happened :]

We were very, very tight with our entertainment/fun spending {we did allow a little to be spent…}. Once all bills were paid and we had tithed, the rest went towards building up the “Gussy Quit” fund.

*Tip: If you don’t have a financial goal that your saving for, but simply love to save your money, this plan of only spending what’s absolutely necessary is a great way to get started on a generic savings account.

So…

How much did we save? About 3 months of my salary.

How long did that take? About 8 weeks.

And you know what kinda drives me nuts? For nearly 6 months prior to this decision we had frivolously spent all of our money on… on… I have no clue! We didn’t have a budget, even though we knew how to write one.

So, I write these things to encourage you to set some amazing goals for your family’s budget. I want you to think of some financial goals that you’re excited to start working towards. I want you to have something in mind that will motivate you to follow through with your new budget. Deal?

Up next: part II, how to write your budget.

Got questions?

Leave them in the comments section and I’ll answer them!

future posts:
{Budgeting your business’ money, part I}

{Budgeting your business’ money, part II}