Q&A Answers Round #1

A big "THANK YOU" goes out to my friends, Lindsey and Janna, for deterring me from hitting the frig to eat some chocolate chip cookie dough 'cause they asked me a question on my Q&A post!  In fact, they asked me a combined total of five questions!  I was seriously jumping for joy!  

Chad, Lindsey & Gibson

I first met Lindsey nearly five years ago at a party for a mutual friend, and she and her husband, Chad, were so excited to invite me and Matt to their small group.  First of all, she was a huge example to me of how inclusive and welcoming she was to total strangers, genuinely wanting to include us in their small group.  We accepted their kind offer and have been involved in the same group for almost 5 years, with people who have become some of our closest friends.  A few years ago, Chad and Lindsey moved to El Paso, my home turf, and it gave us one more thing in common.  I still remember the look on Lindsey's face when she told me they were assigned to El Paso for one year for her pharmacy school program; it was not what they were expecting!  It was the same look of bewilderment and shock that I get when someone from Austin finds out they just met someone from El Paso, TX.  "El Paso?  That's in Texas, right?  Wow!", is the usual response with a look on their face that looks like they just met an alien.  I, on the other hand, was thrilled to know they were going to El Paso!  I couldn't wait to help them get situated, meet some of our friends, and introduce them to some of the finest Mexican food restaurants on earth.  They were only there a year before moving to Dallas, but fortunately, they have very fond memories of El Paso.  I have been so blessed to keep in touch with sweet Lindsey, and still learn a lot from her just like I did the first day I met her.

Lindsey's first question:  First, I would guess that like myself, you are the primary (ie: day-to-day) manager of finances in your family. It sounds like you have a very specific budget and are very organized in that area. I would like to know what tools you use to manage things (do you use Quicken, etc), and did it take you many trials and errors to determine your budget in each category?

You're right, Lindsey.  I am the primary, day-to-day manager, of our finances.  Scary!  Thankfully, our pre-marital counselors taught us how to create a budget, and as one of our assignments, we had to track our expenses for a month and then create our very first budget.  We were so busy with wedding planning, we spent over $400 eating out for the two of us in just one month; it was crazy!  Another huge thing that has helped us is that this is an area in our marriage that Matt and I see eye-to-eye on:  we both don't like debt, we both like saving, we both like numbers and our spreadsheets.  However, Matt is rather cheap and a lot more frugal than I am.  In fact, we were talking the other night about our budget and I teased him saying, "You know, sometimes you really are cheap."  He chided back to me with a chuckle, "Meg, I've never spent so much money in my entire life than I have since marrying you."  Touche, darling. So we have to sometimes balance each other out when it comes to day-to-day decisions on what to buy, when to buy it.  But as far as the big picture is concerned, we fortunately have the same end goal in mind.

In developing our budget 5 years ago, we used a form much like this.  After tracking our expenses for a month, we tried to estimate as best we could on budgeted amounts.  We also made the decision that we would only budget from Matt's income; my income would go towards savings, for our home or for Matt's masters program.  I recognize that as a huge blessing as I know not everyone is able to save income like we were.  We keep track of our expenses on a month-by-month basis.  Some months we go over-budget in a category, but are likely under-budget in another category.  So while we keep track of which categories we're over-budget and make sure our cash flow in the bank is positive each month, we really look at the bottom line in each category at the end of the year to see how we did on an annual basis.  The annual budget is the bottom-line marker for us. 

Figuring out our budget was definitely trial and error.  In fact, it was trial and error for the first 2 years of our marriage!  We're at the point now where, while we still have to make strides to fully staying within our budget, we only have to tweak the budget a little bit at the beginning of a new year because we generally have a pretty good idea of what we spend in our categories now.  We always have trouble though staying within budget in the following categories:  groceries, dining out, vacation...and sometimes, my allowance.  <grin>  Last year, my income offset some of those categories we were over-budget in, particularly vacation with all the family weddings, funerals, and extra trips we decided were important for us to take.  But since I'm no longer working, we are even tighter this year, and in many ways, we see this year as the first real test of our budget.  Vacation I tell ya, I gotta be good with that category 'cause I just want to go here, there and yonder everywhere!

In setting up our budget, we use Microsoft Money software.  It's worked well for us, although if we were to do it again, Matt may find that he likes Quicken better.  We also have set up a few Excel spreadsheets that we mostly use at the beginning of the year to compare last year's budget to the current year's to see how we need to tweak the budget, as well as to keep track of tithing and saving amounts.  One of the most formidable tools we've used is  Dave Ramsey's Financial Peace University class that is offered regularly by our church.  We took the class a couple of years ago and found it very helpful and practical.  We don't follow Ramsey by the book (i.e. we haven't destroyed our credit cards but pay them off in full each month), but we implemented his plan in saving and getting rid of debt (i.e. a college loan and a car payment).  Matt is a huge Ramsey fan and he listens to Ramsey's podcasts regularly.  Even for Christmas one year, Matt wanted to give our siblings the book Financial Peace Revisited as a stocking stuffer.  At least one of the siblings and one sibling-in-law appreciated it.  It may have been too serious, or too geeky, of a gift for the others.  Just as a little plug, we also use ING Direct for our savings account.  It has a much better interest rate (although it's gone down significantly in the past few months) than a normal bank.

We've made our fair share of mistakes as well, like buying a vacation package that we never used that was worth more than you want to know.  So we've regretted some financial decisions, but those mistakes have been useful in teaching us things to be aware of, and have given us a better idea of things we don't want to fall prey to again.

Our budget is always a work in progress, but those are the things that have been helpful tools we've used to set it up and keep track of it.  And we'll have to see how this year goes!  Feel free to ask any questions for clarification or more info.

Lindsey's second question is:  Second, if you could plan your ideal day in Austin, what would it look like?

Hands down, it would have to be something with Matt and Molly, and somehow, it would have to include Mexican food and chocolate.  I would buy a boat (only so I could do this whenever I pleased), and go with Matt, Molly and some friends to Lake Stillhouse, near Belton (hope this still counts as my ideal day in Austin!!), to go boating, swimming, tubing and water skiing for the day.  Actually, we did this a few years ago with our small group (with the exception of buying a boat...it was borrowed), and I think it was one of my most favorite days ever!  First off, we were with good friends.  Secondly, Molly came on the boat with us and LOVED IT!  LOVED IT!  Lake Stillhouse is a much more quiet and peaceful lake compared to the busyness of Lake Travis.  We found a secluded area on the shore where we set up camp.  Molly and I got to swim together, one of my most favorite things to do ever, and it was a gorgeous day!  To top the day off with some Mexican food at Chuy's and a hot fudge sundae or a concrete from Shakes, that is my ideal day in Austin.  Oh, I'd be a happy woman!

Below are a few pictures from one of my perfect days in Austin back in 2005.  Click on a picture to see an enlarged version.