Alison and I have been married for 26 months. That means that our Budget Committee has assembled 26 times to write 26 different budgets. There have been some fun meetings when we were flush with cash and there have been meetings where things were really tight. We’ve had Budget Committee meetings that planned for the arrival of Benedict, and planned for gift giving to those we love most. Our Budget Committee has planned for everything from trips to toothbrushes. Over time, we’ve refined how we operate our Budget Committee and I’d like to share our process with you.
All couples who have a Budget Committee should enter into the process with two general assumptions: 1) the process will change and evolve over time and 2) the use of veto power should be done with intentionality.
As the end of the month draws near, I clean up our monthly budget in YNAB (You Need A Budget), our budgeting software. I also prepare next month’s budget in broad strokes for categories that we already know what the expense will be, i.e. Rent. With the budget cleaned up, I print off 2 copies of the current month and 2 copies of the upcoming month.
Alison and I put Benedict to bed, though we plan on inviting him to some meetings when he’s old enough, and sit down at our breakfast nook.
We first do a post-mortem of the current month’s budget. Line by line we look at what we spent our money on. This is incredibly helpful in two respects. First, it highlights areas where we either over budgeted or under budgeted. Second, it gives us accountability. We’re not perfect people, so we do overspend in some categories each month. Although we may overspend a category, we never overspend the budget, meaning the money just comes from another line item.
The post-mortem is almost like a report card. We have the goal (Get out of debt) and we can compare how we spent with that goal. Sometimes we do really well and other times we don’t. After doing the post-mortem, we decide which categories to empty to $0 into a line we call “Gazelle Debt Reduction.” This line is for any “found” money that comes in during the month. So any income that’s above and beyond our paychecks goes into this line and at the end of the month, we decide how to spend it. Spoiler: it almost exclusively goes to debt. So, for example, if we don’t drive as much as we expected, we typically take the Gas budget down to $0 and move the leftover money to the Gazelle Debt Reduction. We don’t do this for all categories. Car Repairs, for example, we always leave funded because we want to keep building up that budget line in anticipation of future repairs.
After the post-mortem, we look at the upcoming month’s budget. We plan for birthdays and anniversaries, we look ahead to upcoming expenses (Christmas, travel, etc.), and we always budget incrementally for big annual bills (taxes, antivirus software subscription, membership dues, etc.). Once we’ve decided on an amount for all of the categories, we look at what’s left to budget.
We do a 0-based budget, the format that Dave Ramsey teaches in Financial Peace University, so that means that all money is allocated somewhere. For us, we “sweep” any remaining money into a line called “Salary Debt Reduction.” That’s simply money that we have from our paychecks that we’ve assigned to debt.
Once we’ve finished the first draft of the upcoming month’s budget, we discuss things that we’d like to buy in the upcoming month. I keep a running list on my phone in the Clear app so I have a pretty good idea of what we need to discuss. For example, in a recent Budget Committee meeting, I asked for money to buy antivirus software for our computers. We also budgeted for Benedict’s birthday party and discussed our Christmas budget.
After all budgets have been finalized and approved, we pull out the checkbook. We get a number of charitable solicitations during the month in the mail. I hold on to all of them and then Alison and I review them in the Budget Committee meeting. Alison and I each have lines in the budget called “Ministry Support” from which we can contribute to causes. As we review each solicitation, we consider if either wants to make a donation. If we do, we fill out the form and write the check. It really is the most fun part of the whole meeting. Finally, we write checks for any paper bills that we’ve received, usually just our utility bill that charges a fee for paying with a debit card.
Alison and I both have veto power in the Budget Committee. We don’t use it as a weapon or a negotiation tactic, just as a check and balance. There have been things that I’ve asked for that she’s said no to and there are things that she’s asked for that I’ve said no to. The veto is more of a tool than a weapon. It keeps us both in check and allows us to feel comfortable saying no to things that we feel are out of bounds. Even better a "no" often leads to a discussion that might help to clarify the initial request.
We’ve been on the whole spectrum when it comes to how we operate our Budget Committee meetings. We’ve been incredibly lax and hasty and we’ve been really intense. We’ve discussed our formulas for certain things, such as how to deal with our tithe, and it usually takes a few months for us to figure those questions out.
The best part of the whole Budget Committee is the clarity and communication that it brings. We both know exactly where we stand, what we have to spend, and where out of bounds is. We’ve found a system and a process that works for us and, as a result, we’re able to allocate more money to debt reduction than we ever have before.
This is the process we use for our monthly Budget Committee meetings. It’s really actually quite a pleasant experience and we seldom fight over it. It’s just two people discussing and agreeing how to spend our money. In the end, we’re stronger as a couple and as a family because we do the Budget Committee.