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Budgeting together isn’t always easy. Jessi Fearon, author of Real Life on a Budget, shares her story and tips for how to successfully budget as a couple!
Couples and Budgets
Budgets, spending plans…whatever you call them, people don't seem to like or use them.
A recent survey conducted by Experian found that nearly half – 42% to be exact – don't use one.
The top two reason given why they don't? They're unnecessary and ineffective.
Which is bananas, consider some other survey findings:
- Nearly half (46%) have less money in their savings than they had expected; almost three-quarters of respondents say they are behind in their retirement savings.
- 82% of respondents hold some type of debt
- The most common type of debt—credit card debt—is primarily caused by this is the respondents own comments – lack of cash flow and overspending
A reasonable budget can fix most of these problems, but it takes a mindset shift.
First off a budget isn't about what you can't spend or have, it's about what you can.
Very loosely, a reasonable budget typically cover three areas:
- essentials & necessities – roof over your head, food in your belly, clothes on your back
- building wealth – saving for retirement, getting of debt, seed money for a business
- fun – quality of life options
When the two of you can focus your money and energy, you can build wealth and reduce a lot of stress.
When Jessi and her husband Pat started out, spending plans weren't a part of her routine.
Now, though, she's not only developed a habit of budgeting, but she helping others build better budgets.
In this episode we get into:
- why and how Jessi and her husband Pat had a $500 wedding
- the changes she and Pat paid off over $55,000 of debt in 17 months
- why you shouldn't obsess on finding the ‘best' or ‘perfect' budget
Do you want to hear about an easy way to budget? Listen to my episode on budgets for couples who hate budgets.
Resources to Budget Together
Do you two want to get on the same page with budgets? Here are some helpful resources mentioned in the episode and more.
- Best Budget and Money Apps: Personal Capital, Tiller, Mint
- Jumpstart Your Marriage and Your Money
- Real Life on a Budget
- The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness
- Real Life on a Budget: 17 Practical Challenges to Live and Thrive on a Budget
- Why We have Joint AND Separate Accounts
- Six Tips for Newlyweds to Manage Finances
Jessi and Pat's $500 Wedding
Elle: You heard me right. They paid five hundred dollars for their wedding!
It wasn't the original plan but Jesse felt it was the right choice for them.
Jessi: Well that is a that is a very funny story in my in my mind anyways.
When my husband and I when we were getting married my husband was actually an atheist and I'm Catholic and so I really wanted to have the Catholic wedding and all of that because they would not have cost very much to get married in the church even if we had like a bazillion people there. It just would have cost a lot to have a huge reception.
And I didn't feel right about getting married to someone who does not yet believe in God in my church. I just didn't feel right about that. I felt like that was a little disrespectful to my own faith.
So I was like OK well we won't do the church wedding because I don't really think that my soon to be husband feels comfortable with it. And I was like we can't afford the reception anyway so. So what do we do?
We kept going back and forth back and forth back and forth. And finally one day I was so frustrated because it was like literally one of those days where both my mother and my soon to be mother-in-law were telling me that we had to invite this person and that person and all these people that neither one of us even knew.
And I was just like I'm done.
We can't afford this we cannot afford this. Like I'm living in la la land thinking that I can pay for this huge wedding I don't have enough money.
I literally went online and found a place in Helen, Georgia and we could get married with 15 people in attendance for five hundred dollars. And so that is what I went with.
Elle: Since this podcast is about and for married couples you probably understand the insanity that comes with planning a wedding even a small intimate one.
The people around you are really passionate about that guest list. My own mother who is usually the voice of reason and keeping things simple was not immune.
And there are certainly ways you can listen to and incorporate some of your family's requests into your wedding but your budget. That's something you should stick to.
Jessi knew what was the best option for them in their circumstances. So she had to put her foot down.
Jessi: Well a lot of people were not happy at all. Oh my goodness gracious.
You know they were upset because they felt they felt like they had been cut out of it.
I kept trying to explain to them that it wasn't that it was you know it was simply I was very honest. I just it's simply a matter of pride that we could not afford a huge wedding.
My parents were not paying for this. My husband's parents were paying for this it was. And I was a broke college kid. And my husband had just started his business. And so we had no real money set aside to pay for our wedding.
That's why I was like Well this is what we have. I can't really make money grow on trees.
A lot of people were really really upset about it. But overall I think in the end. It went really well because it was super low key. You know we just we went.
We got married and then we all went to a restaurant. We ate then we went back to the hotel and just had sort of an impromptu little party.
My husband and I then got on the plane and went on our honeymoon because that's where all of our money that we did have ended up going with to our honeymoon. We went to St. Lucia in the Caribbean.
Learning to Dig Out of Debt and Budget Together
Elle: With the wedding over in their new life beginning the happy couple was making changes working together the two created a budget that allowed them to pay off the credit card debt Jessie accumulated.
It was a huge win for sure but they were still using credit cards and debt as a part of their financial system. And when she ran the numbers Jessie saw they weren't making much progress on their overall debt.
She was about to have a mindset change that would give her laser focus on budgets and spending.
Jessi: We knew we had to pay off the debt that I had but we were still using debt. We still saw it as something that we were to use because everybody else was using it.
So I had credit cards so why don't we at least have one credit card apiece. I mean that just made sense to us at the time. And then we had had our first son in 2012 and I literally started 2012 pregnant and I ended up pregnant. And so yeah it's a little crazy.
But we found out that we were pregnant with our second son we had just paid off all of that debt from when I was 21. Like all that was completely gone and you're feeling a little bit like we could breathe again.
I read the Total Money Makeover. It clicked in my brain. I was like oh my gosh this is true why are we still using debt.
Like I was like I didn't have an answer to that question like why am I using these credit cards like this that makes any sense.
Why are we still living this way? And then once I actually sat down and did the math they kind of hit me in the face.
That's when I just literally showed this all to him and said We're never going to have the life that we really want to have if we keep doing this.
Our ultimate goal in life is to one day own a homestead and actually live and work on our property.
And obviously, if we don't have a job outside of the home that's going to be a little difficult to do. If we're trying to just live off of our land and earn money through our land if that makes sense.
And so my husband literally handed me his credit card and he said you told me what we have to do and we'll do it. And so here's where it started from there. The hard part was that I had to give up my car. So I did not like that part at all.
I find that part and now I didn't know when to give up my Tahoe at all. I mean my husband was like I thought you wanted to be there. I do.
Elle: Here is where having a goal or why it's important it forces you team to prioritize how you want to spend your money.
Yes, I laughed a bit about Jesse sacrifice with her Tahoe but that's a great example about what you have to do.
One phrase Dave Ramsey uses is ‘Live Like no one else now. So later you can live like no one else'.
And that's what Jesse impacted they buckle down and after almost a year and a half they paid off over fifty-five thousand dollars of debt. This wasn't by accident or a little bit here and a little bit there. Jesse and Pat developed a well-oiled budget and financial system.
Jessi: It's all through one checking account. We don't have we have separate funds but we are both on all of those funds and that makes sense that we don't have any accounts just for each other or spend money is just cash like we create our budget and then we budget whatever the spending money that each one of us is allowed to spend. However, we want to spend it.
We can spend it on whatever we want. Does it matter? We don't have to tell you of a war or bank. But we set that as a cash budget and we pull that money out and then it's our cash is spent. However, we want to win the cash has gone down it's gone. There's no more.
We live in a society where it's faster and let's be honest easier to use a card whether it's debit or credit.
If you're struggling with staying on a budget you may want to consider switching up on how you pay for some things.
Yes it's really hard to get into the habit of going to the A.T.M. to get the cash out its funding is actually this week was the first week and gosh a month that I actually used the debit card to buy groceries plays and I usually just bring cash and that's how I pay for groceries.
I'm very like you know very methodical when I go to the grocery store and I make sure I have all you know I have the exact cash to pay for my groceries because obviously I don't be standing there and I have enough money to pay for my groceries right.
It's funny how when I had the debit card with me I wasn't as concerned and I actually ended up going over budget. It was only like five dollars but still, it's five dollars over my budget.
So I had to go back to my budget and figure out where it could take five dollars from because I went five dollars over my grocery budget which I normally don't do because with my cash I can't go five dollars over budget.
I don't have that leeway so I don't have an extra five dollars on me as you know and I've always said that on a debit card.
Forty dollars and forty-three dollars are the same but with that cash, if you don't have the extra three dollars and you can't pay for it.
And so they just hold you accountable more so than anything else and it makes you think twice about what it is that you're actually purchasing.
And it's not always easy.
Real Life on a Budget
Elle: Jessie has come a long way. Not only is her family doing well with their finances but she's helping others with their own debt. Free journeys she runs the budget Mama and is the author of Real Life on a Budget.
Jessi: There's always personal finance gurus like to talk about you know the recommended percentages.
You know your budget needs to be between this percent and this percentage for groceries and this percent and this percent for your debt to income ratio and all of that.
I don't like following that because I feel like there's not a one size fits all to budgeting. I feel like you need to be very real with your money and figure out where it is that you want your money to take you.
In Real Life on a Budget that's what I attempt to do – I attempt to kind of hold your hand and show you the process on creating a budget that is actually for your real life.
It's not going to be the one for your neighbor. It's going to be the one for your best friend is the one for you and for your household.
Elle: If you're listening right now and you know it's time to create or fix your budget Jessie has some advice.
Jessi: The first step if you're not already doing this is to sit down and create a budget for a lot of people this is a really scary step and for me.
Way back when I was 21 that was the very first scary step I took because it makes you take ownership over your money and when you sit down and you do it together something magical happens.
Because when my husband I were first married we actually did a budget together. I sort of told him what it was and he either followed it or didn't follow it. There was no real accountability there.
And so but once we decide that we going to become debt free it became more of a habit of us talking about the budget together.
You know I still create the budget because he doesn't like that part of it but he actually now looks at it and tells me well no we actually need to you know change the oil on the cars this month.
So you're gonna have to adjust the budget somewhere in there so we can pay for that. Or you know we got to fix the dryer or whatever the case may be.
So we actually are communicating more now on our money versus before when we weren't doing that.
And so sit down and create a budget together and figure out where you want your money to take you wherever that may be.
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This post was originally released in November 2016. Show notes have been updated April 2019.