It’s no secret that one of the most fought about topics in marriage is money. How will we make money? How will we spend money? How will we save money? And more. Recognizing this, we are firm believers in budgeting as you begin your lifelong journey with your spouse.
In 2010 as Jaimee and I prepared for our wedding we had to be frank with one another. I was still in college and working on-campus for next to nothing. Like literally next to nothing (under minimum wage). She had just finished school but with a degree that she didn’t want to use. Being the entrepreneur that she is Jaimee wanted to start a business. So, while she dreamed and worked to pursue that, she worked as a nanny full-time.
Needless to say, our income wasn’t going to result in us buying any luxuries. In fact, with tuition and everything else that college demands we weren’t going to have a lot of wiggle room when it came to our finances. And that was fine. We just had to be honest with one another, and plan based on that honesty. Now, before I go any further, please recognize, this isn’t rocket science. The information that I’m going to share is really quite simple. What I’ve found though when it comes to finances though is that it’s not whether or not information is easy to chew, it’s whether or not we spit it out once we’ve chewed on it or swallow it and let it digest. Okay, enough with the weak analogies. Here’s what we did.
Tip 1: Determine Your Dual Income
Even before our wedding we sat down and sketched out exactly what we thought we would be bringing in on a daily, weekly, monthly, and yearly basis. Based on our information we determined that our income for the first year of our marriage would be approximately $26,400. That’s right, college, dual income family, $26,400. It’s still amazes me to look back at our first tax return and just be blown away by how little our happiness had to do with money… but that’s a post for a different time. Back to the numbers. We determined that if $26,400 was our yearly projection we would have approximately $2,200/month to budget > or $550/week > or $78/day.
That meant we had $78 that we had to find a home for every single day. When you’re living on that amount it means you don’t have the luxury of being flippant with where that money will go; every dollar needs a home. And so we set out to figure out where each dollar would go. (Some couples choose to keep their finances separate. If that works for you, great, but for our family we’ve chosen to go into everything together and take a team approach so everything you see here assumes you’re working on reaching your goals together).
Tip 2: Determine Your Combined Expenses
After determining our dual income it was natural that the next step should be to determine our expenses. Having just come out of college we literally had no data to go by so we started to just list every possible thing in our life starting with what was the most expensive. Rent, utilities, phones, gas, insurance, on and on and on. When doing this it’s important that you don’t leave anything else just because “it’s small” or “it’s infrequent.” We found that the more we could list the more realistic a picture it gave us as to where our money would most likely end up going.
We determined that our monthly expenses were approximately $2,100/month. At this point our college loans were in forbearance status and so we weren’t having to pay on the $40,000 we owed in loans. We also didn’t have any other debt so that was helpful. In that first year we were incredibly blessed to be renting a nice apartment from a family friend for only $525/month. Obviously not everyone gets this luxury and that helped us a lot.
What this taught us was that, while money was tight, we could make it. And I hope that encourages you wherever you’re at today. Not always, but sometimes just taking a good long look at your income and expenses can give you some measure of confidence and for us it certainly did!
Tip 3: Save the Surplus
At this point we reached one of the hardest decisions resulting from our budget: What should we do with that extra $100/month? We decided that the best thing for us would be to start building an emergency fund. I’m a big believer that you should try and have an emergency fund, even if it only is enough to last you a few weeks. So even though it was hard, we committed to saving that $100/month. At the end of the year this surplus resulted in $1,200.00 and a little bit of peace of mind that we would be able to whether a very minor storm like an automobile issue or a rent increase.
Tip 4: Divide Your Gifts
This was something that we did quite regularly early on (whether consciously or unconsciously). What do I mean by this? Well, whenever we would receive a gift (money for a birthday or holiday) we would divide it into savings and spending. We’ve never been big on denying yourself nice things just for the sake of saving, but we’ve also found that even taking just a small percentage of the gifts you receive can result in a great savings over extended periods of time.
There was no time that this tip was quite as helpful as when we received our wedding gifts. Jaimee and I got married at 20 years old and while it would have been fun to trek around the world we are so thankful we decided to split our wedding gifts between recreation and savings. We had around 175 guests and received nearly $9,000 in monetary gifts (this includes money we got when we returned duplicate things from our registry). Obviously this was an absurdly beautiful blessing but it was also an important fork in the road. Should we spend this money or save it?
We determined that we would save $8,000 of it and use $1,000 on our honeymoon. To this day I believe that this decision was one of the most important for our family. At a time when we knew money would be very tight this allowed us enough flexibility to start preparing early on for our future. It also helped us to pay off our highest interest loan as soon as I finished school.
Most gifts aren’t going to be this big, but even if you split every $50 gift in half your savings will add up quickly, so I recommend, determine a percentage split and commit to it.
Tip 5: Find A Side Hustle
Knowing that money would be tight I knew I needed to do something to try and earn extra cash. It wasn’t long before I recognized one that I might be able to do while still working and going to college.
Buying and reselling cars on Craigslist. At some point I’ll have to write a blog post about how I pulled this off, but in one year I sold six cars and profited on all but one… a little red truck that I bought for the sole purpose of buying and hauling a Christmas tree (true story). This car I broke even on.
Before long we were making some extra income and paying for some unexpected expenses that came as well as saving a little bit.
After all was said and done by following these very basic budgeting tips we were able to put away $10,000 in our first year of marriage. Even if you disregard the large lump we saved that was gifted we put away $2,000. All in all we saved $10,000 of the roughly $37,000 we brought in over a 12 month period– about 27%.
What would you need to do in order to save 27%? I sincerely hope that just these simple reminders could make a difference in your life and marriage as you work to manage your finances well and reach your goals together.
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