We are not the poster-couple on budgeting. I've said before, we don't really budget. This is not the way for everyone, and I am NOT saying I am too good for a budget. This is my philosophy on budgeting.
Background: I did weight watchers off and on from 6th grade through 10th grade. I was a chunky kid, so I needed it. I don't count points anymore. Why? Because I KNOW what is good for me, what is bad for me, and the points are basically ingrained in my head. I know if I started it again, and watched it carefully I would probably lose weight. But its part of my lifestyle now, and I'm not as chunky as I was growing up because its part of my life.
If Kevin and I had a strict written budget, we would probably put a little more towards our loans every month. However, that extra $25 or so we would end up putting towards our loans by having strict budget would (1) drive us crazy (2) hurt our relationship (3) not be worth the time/effort that I would spend tracking every penny. I'm not saying budgets are bad!! I'm saying there are alternatives, but only once you have the TOOLS to make wise financial decisions. You have to have the financial tools (or in my example, the weight watcher point) already ingrained in your head, as part of your lifestyle.
We have an unwritten budget. We plan on about $200 for groceries, $725 in rent, and make a goal of a min of $2,500 (most months closer to $3,000) towards our loans every month. That eats up probably 80% of our income. We have very little to work off of after that, because we PAY OURSELVES FIRST. We pay loans first out of every paycheck.
The rest, we can use our "comparison" method to determine what is the most important (see below). We compare our purchases, rather than budget ahead of time. It requires us to be diligent, and honest in what we actually want. We know the "rules" like in weight watchers, we know what is bad for us and what is good. Sometimes we exchange going out to eat (or in weight watchers that piece of cake) for being able to pay $25 more on our loans that month. But you have to have a few things like that, or you're going to go absolutely crazy and throw the whole process down the toilet.
Kevin and I have been trying to work on a way to compare costly things in terms each of us can understand. Let me explain-- For the last year we've been looking at things the way I comprehend them, that is, in terms of clothes and camera equipment.
So for example if Kevin wants to go to a $50 sit down dinner--- I would ask if he'd rather have that or a pair of new shoes. That's the way I think! Shoes, Clothes and Camera gear are the most important items to me. So its easy for me to balance what I REALLY want when I think of it in terms of "I could buy a new lens/flash for the amount we would be spending on dinner"
Kevin is a little different, and I'm realizing he doesn't care about shoes like I do (shocker!) So instead we've been looking at things like "Would you rather have a new desktop mac, or a flight to London?" It really gets him thinking (London is his favorite place in the world, and he would never get tired of visiting!).
Not all of our comparing is that drastic. But once we pay ourselves first, we can look at things that way. We also realize what REALLY matters. Its not a budget telling us what we can spend our money on, its the two of us. So often the conversation comes down to "Do we really need it right now, or can we pay more on loans." Its not always comparing one unnecessary item to another. Some days its "What if we put this more towards our loans, and after 2 years we can take that trip to Disney World."
Kiplinger magazine said it like this: "Rather than view a budget as a straight jacket on your spending, think of it as a way to set priorities. 'Is having HBO now more important than being able to retire with the standard of living you'd like?.'" -Kiplinger (I took a photo of the quote, without citing the article---sorry no site with this one!) If you need a budget, DO IT! I think budgets are great. Don't be afraid of them. Think of them as priorities and setting them, in writing, and sticking to it for the greater good!
But if you are able to pay yourself first (or pay your student loan gorilla that is) and the other life expenses, and cut out the extra fluff....the terrible awful thing called a "budget" where you categorize every penny...may not be for you! Its like a traditional budget, but we evaluate our wants/needs on a regular basis, rather than at the beginning/ending of the month!
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"Pay Yourself First" to me means pay all the basic minimum items that need to be paid. Food, shelter, and for us, our debt. We have automatic withholding for our retirement, so I often forget to mention that item. Also, we have already stored up our safety savings so we just set that aside and don't mess with it. We take nothing out, so we don't need to put any in at this time.