Budget Your Money

Unresolved money issues are why most couples break up. Setting a weekly budget will solidify your relationship and answer your question, “How to save my relationship?”

STEP ONE:
Determine your weekly budget with your partner or on your own. Some couples don’t co-mingle their funds. If you can’t decide with your partner, set a budget and implement the following system on your own.Often when one partner starts doing something that works, the other partner will jump on the bandwagon.

What is your gross annual income? Salary, commissions or tips, stock dividends, rental income, etc. Take a guesstimate if you don’t know for sure. Divide this figure by 52 weeks in a year.

What are your fixed annual expenses? Rent or mortgage, car payments, health and house insurances, utilities, property or income taxes, tuitions, etc. Only include what is absolutely necessary. Take a guesstimate if you don’t know for sure. Divide this figure by 52 weeks in a year.

Subtract your gross weekly expenses from your fixed weekly income, and you’ll arrive at your weekly variable expenses which will be the money you have to spend on gas, auto repairs, entertainment, classes/workshops, food – groceries and dining out, medicines, cosmetics, doctor’s appointments, gifts, travel, clothing, haircuts, massages, etc.

Let’s say the amount is $200 per week.

The beauty of this system is two fold: No need to keep receipts and no need to keep track of any expense categories.

STEP TWO:
Take 2 envelopes and write in bold letters: WEEK on one and RESERVE on the other. Put $200 cash in $20 bills in the WEEK envelope and put the 2 envelopes along with 2 folded blank pieces of paper, one in each envelope, in a safe place.

You can only spend what is in your WEEK envelope. It has been proven that if you pay cash you will spend at least 30% less.

But what do you do about credit card charges, check payments, ATMS and even PayPal?
Treat them as cash.

1. If there’s enough cash in the WEEK envelope, take that charge card payment out of the WEEK envelope and put the cash into the envelope marked RESERVE.
2. If there’s no cash in the WEEK envelope, mark down that payment on the piece of paper that is in the envelope marked RESERVE.

At the end of the week, add up the cash in your and your partner’s wallets. Then add all cash left in the WEEK envelope (if any). And finally, subtract any payments that you listed.

For example: Let’s say you have a total of $100 left in your wallets, nothing in the WEEK envelope, and a $50 payment on the piece of paper in your RESERVE envelope. You add $100 + $0 – $50. You have saved $50!

On the piece of paper in the envelope marked RESERVE, keep a running total of your surpluses and deficits. As the year rolls along, if you’re in the minus zone, try to get back to zero or better yet into the plus side.

Now start your week over again.

You’ll need another $200 for this new week. You already have $100 in your wallets. So go to the bank and get another $100 and put it in the WEEK envelope and repeat the process. My husband and I do our additions and subtractions to determine what we need to get from the bank on the piece of paper in the envelope marked WEEK. The system keeps running nonstop year after year. Don’t forgive your debt at the end of the year. Keep trying to pay it back.

My husband and I have been using this system and have cut our expenses by thousands of dollars a year. We have still been able to go out, have fun, and travel. What’s more, it is satisfying because we now easily understand the value of our money. We do not feel constrained or deprived. Actually, it’s become our budget game that we enjoy playing. And we don’t cheat!

The money anxiety in our marriage is much lower and yours can be, too.

Check out the marriage cartoon – never stop laughing at yourself!