A few weeks ago, my husband and I went out to dinner and had the most in-depth conversation about our budget that we’ve had in a LONG time.
Now don’t get me wrong, we have money conversations a lot. But they are usually more surface-level conversations that focus on paying bills and tracking our spending. We don’t talk every month about our budget in-depth like we did that night.
We knew we had to make some changes because our budget wasn’t working for us anymore.
Yep. You read that right. We’re the couple that has been writing budgets together for years on end. And we couldn’t seem to make our budget work.
For months we came up short. For months we weren’t hitting our goals. And as someone who loves to set (and reach!) goals, every month I was left frustrated.
Why were we struggling with sticking to our budget so much?
What were we doing wrong?
That’s what we had to figure out.
Revisiting Our Goals
That night we sat at our dinner table and started by talking about our goals. We discussed how much we wanted to save for retirement, how much we wanted to give to organizations we believe in, and how we still wanted to live a little.
You see, we started budgeting back when we were paying off debt. We lived on a lot less than we made so that we could pay off a ton of debt. I’d never change that experience. It taught us patience and discipline. But after we became debt free, our budget changed very little. We increased our lifestyle some, but not by much.
However, over the years our dreams have changed. And with that, our budget needed to change too.
What Changed (And Why)
Giving
If I’m being completely honest, we weren’t prioritizing giving like we wanted because so much of our money was being automatically drafted out of our account and going to savings.
Now don’t get me wrong, I believe that saving money is extremely important, but I also believe that giving back is important too. In the past, we weren’t able to give as much money because we were working on digging ourselves out of debt. But now that we’ve paid off all those student loans and car loans? We have some extra wiggle room to give back.
That night at dinner we talked in depth about how we want to give our money. Not only do we want to give money to support our church, but we also want to give money to organizations that we believe in.
Talking about the charities we were passionate about made us excited about giving! It made us eager to revamp our budget so that giving could be a priority each month.
Family Fun Money
The other thing that changed in our budget? We added Family Fun Money into our monthly budget. This amount will fluctuate based on our other numbers at times, but it was important for us to have this in our budget so that we can prioritize experiences with our kids before they grow up and leave us.
Now don’t get me wrong, you can totally make amazing memories with your kids without spending a dime! But my husband and I wanted to take more family campouts and small trips with our kids. This Family Fun Money allows us to do that every now and then.
Before this budget meeting, we didn’t prioritize family fun money. And as our kids get older, this category might likely turn into “extracurricular activities” for our kids. While we have them at this age, we are willing to set aside $200 – $300 each month for family fun.
Where Did The Money Come From?
You might be reading this thinking “Allison, where did you find all the extra money in your budget to do this?” In the end, we made some big changes to our budget. And you might be shocked to learn…
We are saving a LOT less money than we used to.
I know…shocking, right? My husband loves to save money, so this was hard for him. And admittedly, it was difficult for me too. But ultimately, every month we were coming up short. We weren’t able to give as much and we weren’t able to live as much.
You see, when we first started budgeting, we were throwing any extra penny to debt. We lived on less and sent about 30% – 40% of our take-home pay to debt! That’s a LOT of your income to send to debt. We did it because we wanted to be debt free.
Even though we were sending so much money to debt, it still took us 4.5 years to pay off $111,000 on two teacher salaries. And during that time we became accustomed to the lifestyle we had. Once we were debt free, our lifestyle stayed almost the same.
We were still sending almost 40% of our take-home pay to savings instead of debt. And while that’s amazing…it didn’t allow us to give back and create experiences like we wanted.
What Our Budget Looks Like Now
Now that we’ve completely overhauled our budget, I’m excited to share our percentages! Remember, this is for a family who has no consumer debt (we still have a mortgage). That means no car loans, personal loans, or student loans.
Monthly Bills and Discretionary Spending: 68%
Right now, we are sending 68% of our take home pay to all of our monthly bills and discretionary spending. This includes:
- Mortgage and Utilities
- Insurance (health insurance, car insurance, life insurance)
- Food
- Gas
- Phones
- Netflix & Hulu
- Clothing
- Spending Money (Personal & Family Fun Money)
- Christmas Sinking Fund
- Car Maintenance Sinking Fund
- Birthday Sinking Fund
If it’s a bill or something that we will be spending money on eventually (such as Christmas or car maintenance), then it’s added to this main category.
Savings: 22%
This was a big adjustment for us! We are sending 22% of our take home pay to savings. Currently we are saving for:
- Kid’s College Accounts
- Emergency Fund
- Retirement
Giving: 10%
This is the category of our budget that I’m most excited about! I’m happy that we are able to send money to others in need each month. We are breaking our giving up between 4 different places/organizations:
- Our Church
- Compassion International: we sponsor a little girl from Haiti so she can have access to food, fresh water, and school.
- The Bail Project: This is the charity that I’m passionate about and decided to give to. It helps pay bail for people who are legally presumed innocent (and who a judge has deemed eligible for release) before trial. This allows people to go home to their families while they wait for their trial. Plus, they have a chapter in Houston, so I’m helping people in my community!
- Boys and Girls Country: My husband picked this charity to give to because he works directly with some of the children that live at this orphanage at his school.
I’ve learned that when you find an organization that you’re passionate about, giving money isn’t difficult. In fact, I look forward to giving money to these 4 places each month because I know that we are doing our part to make a difference in these organizations.
How To Know If It’s Time To Change Your Budget
As your life and circumstances change, your budget might change too. What I’ve learned is that it’s okay to make these changes in your budget.
If you’re continuing to come up short each month on your bills (or if you have money leftover!) then it might be time to change your budget. Start by sitting down and writing about your goals. Then, make a budget that aligns with the goals you want to meet.
The Bottom Line
Ultimately, every budget is unique and should not be set in stone. A budget is a fluid document that will change from month to month and year to year. There will be times that you’re sending every extra penny to debt and there will be times when you’re able to give money as well.
As your goals and life changes, your budget will too. Embrace the change!
Want to get started with budgeting but don’t know where to begin? I’m here to help! Join my FREE 6-Day Budgeting Basics Email Course. You’ll get access to my step-by-step budget program that will help you write a budget you can stick to!
