Budgetize

Since I work in the financial field, money is a fun topic for me.  I wouldn't say I'm an expert in personal finances, but I've always been aware of how important budgeting is to my sanity and my mood in general.  The part of money that I don't enjoy is worrying about it, and I feel extremely lucky to be married to someone that completely agrees with me on the topic.  Obviously nobody wants to worry about money, but we've found some ways that really have decreased our stress as it relates to finances.

From the outside looking in, some people would say we are cheap, but I totally disagree.  As an accountant, I've met A LOT of cheap people, and I know we are not in that category.  Adam and I both have hobbies and interests that are not inexpensive, whether it be fly fishing, our house, traveling, wine, food, camping or skiing, they all require a good chunk of money and we don't skimp on those activities. The way we are able to afford these hobbies as well as our daily lives, is by keeping a budget.  As a couple, we sit down together at the beginning of every year and discuss our retirement and long-term savings goals as well as anticipate what the next year holds- a new kitchen, car repairs, 3 or 4 out of state weddings, trips, new skis, etc.

Below are five things that help with keeping our budget and make finances less of a worry to us on a daily basis:

Individual Allowances
We setup an allowance at the beginning of each year and transfer this money into our individual accounts at each pay period.  This money can be spent however we each want to spend it- lunches out, personal hobbies, clothes, gifts, etc.  The reason this works so well is it's almost impossible to overspend.  Since we limit ourselves with this one transfer per pay period, we can't take out more and we learn to save for a big fun purchase we have coming up.

Auto Transfers
Direct deposit and automatic transfers make life so much easier.  Having a percentage of your money transferred to a savings account every pay period makes you completely unaware that you are even missing it in your daily life.  If you don't setup auto transfers, you have an easier time talking yourself out of putting it into savings.  A new thing Adam and I are trying this year is mini-savings accounts for four of the major expense categories we have- travel, home improvements, home repairs and maintenance and miscellaneous.  We have an auto transfer to each of these accounts at each pay period, and when we need to spend this money, we simply transfer it into one of our regular checking accounts.  It makes overspending really difficult.  Plus, most banks have a product like this that is free and can be setup online.

Free Money
Honestly, who doesn't like free money?  If you are lucky enough to have a 401(k), 403(b) or any similar long-term savings option at your work, in which the employer makes contributions, it's absolutely crazy not to personally contribute the maximum that they will match.  A quick number to throw out...if you make $35,000 a year, and your employer offers a 3% match, that's $1,050 of free money to you every year.  This adds up quickly, as it's likely your salary will continue to grow until retirement and your investment will gain value over the many years it stays in the market.

Why pay interest?
Pay off credit cards every month.  They carry extremely large interest rates, and there is no need to throw that money away.  The only time I'd suggest purchasing with a credit card is if there is an emergency and you don't have direct access to funds or if you have the money to cover the costs, but want to gain some frequent flyer miles or points on your card.  These cards are so tiny and light, which makes them so easy to use, but before you know it, you've spent more than you can afford, and this little piece of plastic ends up causing a large burden to your mental health.  Buy what you NEED and save for the big purchases you really WANT.

Emergency funds
Always keep an account with emergency money.  I'd suggest enough to cover at least two months of your living expenses.  Having this as a backup should the unexpected happen, will make that event so much easier on you- whether it be a lost job, a new roof, a big car repair or expensive hospital bills.

Overall, I think the most important thing to maintaining financial sanity is to live within your means and prioritize.  It's very important to treat yourself to something you really love once in a while, else you're more likely to go on an extreme binge- just like eating- and those are tough to get past. But, make sure to save money on items that are not so important to you in the grand scheme of things.