Our Budget Process

Budgeting for a Family

Money is a topic that never scared me when I was working and didn’t have kids. If you’ve been reading here since the beginning, you may remember I quit my job in April 2014 because I wanted to try something new. Fast forward 5 years and I’ve been a stay at home mom ever since.

The first year was filled with pregnancy bliss and hardly a care in the world other than growing our little baby boy. But after that, any discussions about money made me anxious. I honestly tried to block it out.

Last year I was listening to one of the early Bad on Paper podcast episodes. They were talking about self care and one of the hosts (pretty sure it was Becca) mentioned self care can, and should, include areas of your life that you need to address as an adult. She specifically mentioned finances. It stuck with me as I had been trying to avoid our finances for the better part of 3 years.

I think the main reason the topic scares me so much is because I don’t want to know how much money we’ve spent the past 3 years while I’ve been home with our kids. We went without income for 18 months while Jim was in school and I couldn’t stand the thought of leaving Lawson and Sybil with someone else.

I feel the need to pause here and add that I know how fortunate we are that we could make that choice. I know most people aren’t in the position to do so. But I also want to add that we both worked really hard for years before we had kids. We saved a lot of money and were able to live off of it during that period in our lives.

Discussions about our finances inevitably leave me feeling like I need to go back to work. In the past, I’ve immediately put up a wall and gotten very defensive. Not because Jim says I need to go back to work (in fact he’s supportive of me staying home with the kids), but because I know the long-term impact of watching my savings account decrease the past 5 years.

We typically rotate which one of us is in charge of our monthly budget. 2019 was my year to take charge. And instead of it leaving me an anxious mess, I’ve actually embraced it.

We use Mint to automatically download and categorize our expenses. Jim and I didn’t love the budgeting and review capabilities of Mint. So this year Jim built a budget file in Excel where we review our budget. This requires an extra step of manually downloading our data from Mint and inputting it in the Excel file, but it’s worth it for us.

In the Excel budget file, we review monthly and year to date expenses as compared to our original budget for the year.

I genuinely enjoy reviewing our expenses and categorizing them into the appropriate buckets we’ve set up. I try to categorize expenses every week, typically on Wednesday. There’s no rhyme or reason to Wednesday, I just picked one day a week to put it on my to do list. We then review the Excel file 2-3 times a month.

Being responsible for our monthly budget has helped me feel more in control of our expenses. If I see we’re close to our monthly allotment for a certain category, I try to cut back in that area. It doesn’t always work and there are months we exceed our budget, but overall we have a much better understanding of the money we’re spending and where we’re spending it.

Separately Jim maintains an Excel file of our net worth. We update and review our net worth quarterly. The division of responsibility for our finances works well for us. Jim takes a higher level review of our finances, while I look at our day to day expenses and monthly budget.

If you’ve been struggling with finances or trying to completely block out any mention of money, I hope you’ll find this helpful. Feel free to leave any questions in the comments or email me at erica.kartak@gmail.com!

photo by Lauren Mancke on Unsplash

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