Counseling Austin Blog


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Finances are not the number one reason for suffering . . . it’s attachment to financial or material gain that is the root of suffering.

Money is the number 1 reason for relationship stress (I cover an effective method for how to bank in a relationship further down). And even for people that are single, money is one of the primary reasons that they experience stress. Learning to manage it effectively reduces concern about meeting budget needs, and it also provides funds that get us much needed down time.

Learn your income and spending patterns

Start with what is most natural: Either pen and paper, or a computer. Some people prefer to keep a small spiral notebook in their pocket or bag. Very often, these people report feeling like they have a better “connection” with their patterns when they write things using a pen. People that have grown up primarily typing often prefer to track spending using a computer, tablet or laptop, sometimes all 3. There are wonderful apps and websites for this purpose, but pen and paper work just fine for our purposes: Cultivating financial mindfulness via tracking income and expenses.

Get everything documented. Revisit your list regularly

The most helpful method for tracking expenses is documenting every single penny spent for one month, from chewing gum to car payments. This gives a true snapshot of your money decisions. There have been people who have saved over $150/month once they realized that their daily snack machine runs truly added up. Alcohol and cigarettes often add hundreds of dollars to expenses. Teens tend to see just how much junk food and gaming upgrades cost them each month.

A less cumbersome way to track expenses is to write down all of your monthly bills. It is important to read through bank and credit card statements so you don’t miss anything. Some expenses to begin with include:

  • Rent/mortgage
  • Renter’s/Homeowner’s insurance
  • Homeowners Association dues
  • Retirement contributions
  • Taxes withheld from paycheck (many use 20-30% as a starting point of taxes)
  • Utilities (water, gas, electric, trash, etc.)
  • Phone/fax bill
  • Internet/cable TV
  • Car Payment
  • Car Insurance
  • Fuel for car
  • Health insurance
  • Groceries
  • Credit card bills, lines of credit, etc.
  • Student loans
  • Socializing
  • Entertainment
  • Misc. expenses, unexpected expenses

Less common, but still recurring expenses also include:

  • Car repair
  • Car registration and inspection
  • Car washes
  • Holiday and birthday gifts
  • Airfare and hotel expenses
  • Hobby expenses
  • Clothing
  • Furniture
  • Appliances
  • Other larger unexpected expenses

Typically, people start with a list like the above, then fill in the gaps by writing down expenses as they come across them. The more thorough you are with this, the better you will be able to plan your budget.

Round expenses up and income down

Because there are inevitable surprises, we want to build in some cushion. There are 2 main ways that I’ll mention here:

  1. Include line items like Misc., Fun, Unexpected, etc., or even a few of them, with $50-100 budgeted for each. Even at only one $50 line-item, you will be creating a $600/yr cushion.
  2. Round your after-tax income DOWN, and round your expenses UP. This creates 2 more layers of cushion that can make those emergency room visits more manageable. For example, if your Rent is $830/month, round it up to $850; if you net paycheck (after-tax take home pay) is $2200/month, round it down to $2100/month, or even $2000/month.

Some people like to keep a footnote that shows the actual, non-rounded numbers. This is fine, just be sure you are using the rounded numbers for planning your spending so that those pesky unplanned expenses don’t break the bank!

How to split and share dual-income family funds

I see so many couples that battle over this: How to share funds and still have some independence to spend money that each person worked so hard to earn. There are power and control dynamics at play, as well as different ideas about what needs to be budgeted for and how much to budget.

There are 3 main ways that I see people try to accomplish this . . . the hybrid method being the most effective in my experience:

  1. Separate accounts: Keep money completely separate. Pay bills by each person paying 1/2. There are several ways to accomplish this that I won’t get into here just yet (but stop back, I’ll add a section on this later).
  2. Single joint account: Put all money into 1 joint account that each person has access to.
  3. Hybrid: Each person has a private account, and there is a joint account that household bills are paid out of.

Hybrid method

The hybrid method seems to bridge both individual needs and household needs, so I’ll start with this one.

In this setup, each person deposits their paychecks into their private account, then transfers either a specific dollar amount or a % of their income to the joint account. Whether you use a set dollar amount of % is a discussion for you to have with each other.

The way this works is you write out your budget to determine how much money is needed to make ends meet each month (including having a cushion built in). Then determine how much each person transfers to the joint account (either the set dollar amount or the percentage amount). Whatever is left in each person’s private account is theirs to do with as they please; although agreeing on an amount that triggers a discussion first is a good idea — some folks say any purchases over $1000 need to be discussed first, not as a ‘getting permission’ thing, but more of an FYI . . . although if somebody wants to buy a boat, the other person may point out the amount of monthly upkeep may preclude the purchase . . . in this case, the one wanting the boat will be glad they bounced the idea off their spouse before making the purchase!).

Obvious exceptions to the discussed larger purchases would be gifts like diamond rings for an anniversary, etc. Just be sure you are covering your obligation to the joint account first.

It is important to re-visit this setup quarterly to adjust for changing incomes and changing expenses.

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