I’ll set the stage for you. Every Friday, the credit card balance email would arrive, and I would be physically sick and terrified to open it. It was like the Russian roulette of email, wondering how horrible of a job we did this week at following our “budget.”
Oh my god, how did we spend this much money?
*Insert the throwing up emoji.*
I felt like a complete failure.
How did we do this again? Didn’t we figure this out finally?
Having a clear budget—and a clear process for where the income goes—is essential. My wife and I have worked together on our budget for years now. But it’s also easy for the lifestyle creep to begin, to get shiny object syndrome. We’d had the blessing of our income steadily increasing for a number of years, but for a time, our skills and diligence with saving, budgeting, and knowing what to do with the money had not grown with it.
You may be thinking, “Tough life.” The trolls of the internet are literally digging their way through the interwebs towards this post as we speak. “The guy’s complaining about having all these bucks to blow on whatever.”
Let me suggest instead we put the focus on this adage: It’s not what you make, it’s what you keep.
For multiple months in a row, my wife and I would have these weekly conversations about “sticking to our budget.” We would then take turns arguing back and worth about what we had or hadn’t done. Where we spent the money and whose fault it was. There were lots of great reasons why we had made the decisions we had—and how it would be totally different the following week or month.
The problem is, these were all excuses. This dinner. These things for the kids. Some hunting crap. The thing on the counter. That lunch. These toys for the kids. That tractor part I had to have. That little flight across the country. Fancy new shades. These Lululemon pants.
Anyway, you know what all of that really is, right? Excuses. No ownership of the problem.
Related: 4 Steps to Buy the Car You Want Within the Budget You Can Afford
At the end of the game of your favorite sports team, it’s easy to see the score, right? There is a winner and a loser. Back then, our budget, savings, and investments were the big fat losers. And our credit card, the stupid crap we were buying, and our bad behavior and habits were winning.
Although we were making awesome money on a regular basis, I was feeling literally broke. Our system and our budget wasn’t working. We were literally paying these credit card bills in increments and could blow more than five figures on a monthly basis. So embarrassing.
Something had to change.
My wife and I were texting back and forth. I believe that conversation went something like:
Me: “Hi love, hope you are having a great day… [adorable kiss emoji]!”
Mrs.: “Thanks love, you too. Awesome day with the kids here. I’m sure you’re out there crushing it, you amazing man you. What an adorable beard you have, too. I’ll have a whiskey waiting for you on the counter with one of those cool round ice cubes as soon as you get home tonight.” [Some embellishment here may be possible.]
Me: “Oh yeah, thanks love. Crushing it ALL. DAY.”
Me: “BTW, have you happened to look at the credit card today?”
Mrs.: “No, been busy with the kids at the library and the grocery store, then taking care of your stuff, then cleaning, and then school with the kids, and then…”
Me: “Yeah, it’s like… $4k. THIS WEEK! How in the world did we do this, AGAIN!”
Me: “What in the world are we going to do? This is such a nightmare.”
Mrs.: “It’s time. We need to go back to the envelope system.”
Me: “Holy cow, why didn’t I think of that?”
The Transition to the Envelope System
I’ll point out, it’s not an easy transition after you are used to doing whatever you want. And believe me, I was at least 50% if not more like 70% at fault for the spending in the household. It’s fun to get whatever you want. But it also has its downsides. Like blowing all your money, leaving you feeling broke and stuck.
If you aren’t familiar with this, Dave Ramsey and many others have spoken at length on the envelope system. The premise is, you write out your budget for how you will spend your money monthly. Anything that is paid directly, like a car payment or a mortgage, is accounted for, which would then be paid via bill pay. Then, everything else budget-wise, such as eating out, clothes, groceries, fun money, kids sports, toys, whatever, is paid out by cash from the envelopes. No exceptions.
Usually, I have a monthly draw from our business around the first. So, after having my draw completed, I walked into the branch of the bank and walked up to the teller I knew by name. I handed her my check and then asked, “I’d like to deposit this check, and I’d also like to withdraw $4,000 in cash please.”
I had this feeling she was thinking to herself, “Is this dude really taking that much to the… strip club? Wow.”
I got a pretty good chuckle at that thought. I let the pause go for another few seconds, and then said, “We are doing the envelope system at home now. Have you heard of it?”
Related: The Foolproof Monthly Budget: How to Save Up Money to Buy Investment Properties
It fun to share what we were doing as she gathered everything together.
She stepped back over to the teller station with this giant stack of cash. I was thinking, did she do the math wrong here? It’s like 2+ inches think, made up of $20s and $100s. She counted it once (with a machine in that quantity) and then walked over to me to count it out. I swear it felt like five minutes counting these bills out. Every few minutes, I would look around to see if there were other people around wondering what in the world I had gotten myself into.
I was thinking, “I wonder if this is what the drug dealers feel like?” And now I have to walk out of the bank with this. The cash doesn’t fit in the bank envelope. Or two. So I just carried the stack out and walked directly to my truck.
When I got home, I showed my wife this same stack of cash and said something funny like, “Giddy up, momma.” I’m sure she was impressed. And I was seriously hopeful this would finally get us back on track.
The previous time we used the envelope system, maybe four or five years ago, we used them for well over a year, with great success. We have now been doing the envelopes for two or three weeks. And just like the last time, I have felt an immediate sense of calmness in our decision. If we want to eat out, we do. If my wife needs something for the kids, she gets it. But we know that the money in the envelope is what is budgeted, and we have to work together within the categories to make sure we are on the same page. It’s a lot harder to spend a $100 bill out of your wallet than it is to pull out your credit card and swipe it.
So, I will do a follow-up on this in another six to nine months and give examples of what we have run into, what was working, what we had to tweak, and some of the results from savings and spending.
It’s my goal with this post to tell the truth. Making money is actually the easy part. Keeping it, investing it, and not raising your lifestyle every time you make more money is hard.
No matter if you make $2k a month or $100k a month, you need a budget. You need to tell your money where it’s going and to hold it and yourself accountable for the outcome. No more excuses. No more email roulette with the credit card statement. Own the outcome, and let’s get after it.
How do you budget in your household—what has worked, and what have the challenges been?