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Life Lessons of a Military Wife (overseas in Europe!): Budgeting is a Bad Word

Life Lessons of a Military Wife (overseas in Europe!)

My goal here is to make your life easier, especially those who are in the unique situation of being a military spouse. Yes...I've been around...but in a good way...and hopefully can share those tips, tricks and shortcuts with you too. I've been on this military bus for over 40 years now. My goals in life are to have a well-run home, few money worries, well adjusted children, money socked away and whatever happiness I can scoop out of life.

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After life as an Army brat, being in the Army myself and marrying a soldier, I can honestly say I have a bucket full of life lessons I can share to help you make your everyday life easier and enlightening. Don't waste your time making unnecessary mistakes and benefit from others who have come before you on your journey through life.

Tuesday, February 12, 2008

Budgeting is a Bad Word

I finally finished the online Dave Ramsey's Financial Peace University and Total Money Makeover. Although the only debt we have is our slew of mortgages, and financially, we are doing fine, I couldn't pass up the free offer on the normally $100 course. Honestly, Dave has a lot of good tools and, he's funny. I've even downloaded the MP3 files of the course to my Zune in case I need a refresher or "pick me up" somewhere down the road. Dave covers the gamut of financial topics from buying things, selling things, paying off debt, saving, housing and even giving...great advice. Taking the course forced me to sit down and actually do a budget among other things. A budget should not be a set-in-stone strict "all or nothing" approach. It is a GUIDELINE that will give you limits on your spending...for your own financial situation. So what if you don't want to spend money on the course but still want to see how you're doing financially?

Take the time to download this Excel spreadsheet. One of the people taking the course, a self-proclaimed Excel freak, put it up on the internet for everyone to use. The spreadsheet will do all your monthly calculations for you..and on two sheets of paper. You can easily customize it to add categories that fit your particular financial situation. I also like how it portions out your pieces of the financial pie, meaning, you should only be spending a portion of your income on each slice of your pie. As an example, you should only be spending about 35% of your net income on housing. Here is the recommended breakdown in round figures.

  • Housing - 30 to 35%
  • Food (Groceries and Dining Out) - 12%
  • Transportation (car payments, gas and maintenance) - 12%
  • Savings & Retirement - 10 to 15%
  • Insurance - 5%
  • Recreation/Entertainment - 5%
  • Clothing - 5%
  • Medical/Dental - 5%
  • Charity - 5 to 10%
  • Misc - the rest
Here's a little calculator where you can figure out your target percentages, according to your income, for each slice of the pie. Granted, this is a faith-based website, so it takes tithing into account, but even if you are not a Christian, you should be striving to give something back to society. It's amazing how much one can get out of feel good when you give...look at Bill Gates and Warren Buffet among others. They may or may not be Christian, but to them, it makes them feel even more powerful when they give. You can too on a smaller scale.

Here is another calculator below, where you actually put in your detailed amounts of spending. If you have no idea, take a month to write everything down in a little notebook. Assign everything a category (food, housing, recreation, etc) and then total it up at the end of the month. The hardest is keeping track of cash expenditures and what you do with money you get out of the ATM! If the total added up is below what you earn, then you are living well within your means and can start thinking of setting some aside. If not, you need to really take a look at your situation and look at more options than just sticking your finger in the dike.

With the Excel budget worksheet, I realized we were spending a tad too much on food. We do have three growing boys in the house (one being our teenage exchange student), but I refuse to accept that as an, I will look and see how I can cut corners there. I also see that we are a bit too generous in our gift-giving every year. I think I give every relative, friend and neighbor, something on their birthday, Christmas and whatever other fun holiday falls in between. That has to least on our income right now! Time to break out the cookie recipes and some other more creative ideas, and gift those instead. I think I can be a little more frugal here!

What do YOU do to track your spending and to keep it in check? Do you follow a budget? Do you set aside money for savings, retirement and kids' college?



Blogger Jacki Hollywood Brown said...

We started using Quicken to track our spending. We buy almost everything with direct debit or credit cards. Then, when we download our bank statements into Quicken we can see how much we have spent and on what.

The first few months were very enlightening. We were able to pinpoint what we were over spending on and get it under control quickly.

At year-end, we were able to see exactly how much we spent on groceries vs. restaurants, on clothes for us vs. the kids, etc.

We no longer do a budget as we are able to keep our spending under control using this method.

Quicken is a great program but there are also others that are available that will serve the purpose.

February 12, 2008 at 2:49 PM  
Blogger Yazmin said...

I really wish I hadn't of missed that post of yours mentioning the free class for vets. We could sorely use it.

I ended up buying the book, but since my husband says that he doesn't retain much unless he reads and he wants to read it together, it has to be read on his time. I would have been way done with it and started with the program by now. *sigh*

Regardless, we use Quicken to track our spending, but have never really setup a budget for our income. That's something we need to like we have no responsibilities is just not cutting it, especially when we want to save for kids, future, parents, etc...

February 12, 2008 at 3:48 PM  
Blogger ****Veteran Military Wife**** said...

Yazmin, if you haven't already gotten my me please:-))

February 12, 2008 at 4:01 PM  
Blogger ****Veteran Military Wife**** said...

Thanks for the tips Jackie! I neglected to mention that I got my budget worksheet figures from Microsoft Money (and then just tracked cash spending in a notebook). I like too how it automatically downloads the data from our bank accounts online. It does make tracking things much easier.

February 12, 2008 at 4:03 PM  
Blogger Jacki Hollywood Brown said...

I used to use MS Money (which is a great program) but then we switched to Mac and ended up having to go with Quicken because it was the only software that worked on a Mac and tracked Canadian tax info.

February 12, 2008 at 6:46 PM  
Blogger Carrie said...

You should check out as a place to keep track of your spending. I think it is great. I heard of it from Clark Howard.


February 12, 2008 at 9:10 PM  
Anonymous Anonymous said...

i liked the mint site too until I started getting all these email offers at my new email address and I don't like the way they clutter up your screen, trying to get you to change the accounts you have becaues another bank might have a better offer!

Plus, how do I know all my bank stuff is safe at their site? I went back to Quicken.

February 13, 2008 at 4:35 PM  

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