Tip 3. Ways To Budget
2 Ways to Manage Money
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My wife and I do the budget together, but we have different ways to manage money...
I am a Budget Nerd.
My wife is a Free Spirit.
I, the Budget Nerd:
- handle the online banking
- balance our checkbook
- create the preliminary budget spreadsheet
She, the Free Spirit:
- doublechecks the budget
- corrects mistakes
- offers creative solutions to any problems
The truth is, the one who wants to live on love wants more than beans to eat, and the bean counter needs more than a spreadsheet to have a life!
We need each other. Like my mother-in-law says, we can't live on "lettuce alone" (say it aloud).
That's why God created people with different ways to manage money.
What's your financial personality?
A Budget Nerd is...
- Precise
- Organized
- Detailed
- Feels like they are caring for the Free Spirit
- Thinks the Free Spirit is irresponsible
A Free Spirit...
- Has a life
- Doesn't get high from doing a spreadsheet
- Truly wants to be part of the financial decision making
- Often doesn't feel cared for by the Budget Nerd
- Thinks the Budget Nerd is too controlling
Working Together
Here is what Dave Ramsey says are the money management rules for the 2 ways to manage money when it comes to budgeting together:
The Budget Nerd and the Free Spirit work together making decisions.
The Budget Nerd...
- Prepares a first-draft budget, gives it to the Free Spirit, and shuts up
- Remembers the Free Spirit's attention span for money lasts only 17 minutes, so this cannot be a weekend summit
- Allows the Free Spirit to change the budget
The Free Spirit...
- Shows up to review the budget
- Changes something on the budget (that is, fix what the Budget Nerd missed)
- Never says, "Whatever you want to do."
An Example From My Life
How the 2 ways to manage money work in our home
By myself, I open our budget spreadsheet in Excel, log in to our online banking website, and then open our checking account register in Quicken.
Then I download my online bank statements into Quicken and reconcile my checking and savings accounts.
Then I go to the spreadsheet. First, I create a new budget by copying and pasting last time's budget. (I have all of our budgets running vertically down a spreadsheet.)
I delete the old amounts and change the date.
I fill it in with our new income and write in the amounts we usually spend on expenses like gas and groceries.
Then I'll find which bills are due before our next paycheck and list those amounts by due date.
If I can remember, I'll also add in special items like birthday gifts.
At this point, I've done all the things a Budget Nerd loves to do. It's my way to manage money. I've downloaded and updated and copied and pasted and formatted and coded every dollar!
Now it's time for a reality check...
I go get my wife. She's the Free Spirit.
We glance at the time because I have only 15-20 minutes before her eyes glaze over.
We pray, asking God to give us wisdom, chase away our fear, build unity between us, stretch our dollars, and make us prosperous and generous.
Then, I briefly explain to her what I've done and show her how much money we have and what I've accounted for on the budget spreadsheet.
She looks it over. She tells me I've done a good job and that she appreciates my taking care of all the details.
Then she points out that we need a little more for groceries because we are having friends over for dinner Sunday night. And our neice's birthday is next Saturday, so add in extra gift money.
That reminds me I have a doctor appointment, so I add in a copay amount.
We figure out what to do with any money left over (like save it or carry it over to next month).
Then we add up how much money we need to get out as cash. She writes that down as a cash budget because she withdrawals it from the ATM and then buys groceries.
And we"re done!
We thank God for helping us, and off my wife goes. That's her preferred way to manage money.
Next I pay the bills and take care of anything else online, and I'm done.
My Free Spirit wife has helped me immensely. She has participated and given valuable input into the budgeting process. Without her help, I"d still be making pie charts and would have forgotten all about my neice's birthday.
What about you?
What can your budgeting partner expect from you regarding ways to manage money?A rough-draft budget or 15 minutes of your undivided attention?
What's your spouse's personality? Your roommate's? Your mom's? Your kid's? What can you expect from them regarding ways to manage money?
How can you learn to work together on your home budget using these ways to manage money?
