Finances can be a difficult topic to address; not only are money-related matters very personal, they are also amazingly complex. And although money is, of course, quite neutral (after all, it’s just metal and paper), a discussion of how much we have and what we spend it on can quickly become an emotional minefield. No wonder many of us were taught as children that it’s not nice to “talk about money”.

Before I go any further, I want to stress a couple of things:

1) I’m no financial expert and will never claim to be. I’ve made my share of mistakes — some small, some not-so-small. Fortunately, I’ve learned quite a bit from those mistakes.

2) I certainly do not claim that the decisions I’ve made are the right ones for anyone other than myself.

Of course, there’s a huge backstory to my current financial situation, but I don’t want to get bogged down in that, and I believe what I’m going to share will make sense without it. If not, feel free to ask any questions via a comment or email, and I will respond as best I can.

I am ashamed to admit that for most of my adult life — single and then married — my idea of budgeting involved getting paid, paying the bills, and spending whatever was left. A single’s lifestyle and then married with two kids in school and active in Scouting and sports or other activities, meant spending what was left wasn’t a problem. To my credit (no pun intended), after I started my current job 3 years ago, I began contributing to a Roth retirement fund and put aside money every month in a savings account to cover non-monthly expenses such as personal property tax and gifts (Christmas, birthday, etc). Still, though, no budget.

While re-reading a favorite nonfiction book last week, something I had obviously skimmed right over on my previous reading caught my eye. The author challenged readers to pull out their checkbook and any credit card statements; tally how much money was spent on various “categories” such as housing, entertainment, charitable giving, etc; and then honestly assess whether or not their spending reflected the priorities they claim to have. 

Ouch. I didn’t have to pull out the checkbook to know the answer, but I decided I was going to meet his challenge and see how far off I was and make some changes. I logged on to my  online bank account and got to work. Using the electric bill pay part of my account, I quickly determined my average monthly payment for every bill I have (house payment, utilities, etc) for the past 12 months; using my online bank statement, I tallied and categorized all remaining spending for the past 6 months (because I had to do this manually, I could only force myself through 6 months worth of statements).

Using an online budgeting tool (at, I input my monthly income and each of my own average monthly payment by categories (housing, transportation, food, charitable giving, etc), broken down even further by bill, if applicable. For example, under food, I had “grocery store” and “eating out”. What made this such a valuable activity, to me at least, is that the online budgeting tool shows not only the dollar amount spent for each category but also translates that dollar amount into the percentage of total spending.

I quickly saw that my initial hunch was right — I wasn’t spending my money in a way that reflected the values and priorities I claim to hold. In some respects, I was on-target, but I was actually farthest from the mark in the very areas that are most important to me.

As time allowed for the next several evenings, I went back to the budget printout. I pencilled in changes, ran the numbers, erased and wrote in new numbers. Finally, I came up with a budget that reflected what’s important to me. In a perfect world, I’d be done. I’d begin implementing my new (aka “first”) budget beginning with my November paycheck.

Unfortunately, I can’t. Because of my current housing situation, the percentage of my income that *must* be allocated for housing and related expenses is too high and, as a result, throws the lower-end items out of whack.

As a result, I went from having no budget to having 2 budgets. The first is that budget I just described, which I now call my “Target Budget”. I also have a 2nd budget, which I call my “For Now Budget”, which is as close as I can get to my target budget at the current time. I also have action steps that will take me to a point where I can implement my target budget. The largest action step involves selling my current home; I had already put it on the market, and this budget-making process confirmed to me that I had done the right thing in doing so.

I have to admit that I am absolutely amazed at how great I feel after performing an activity that I have avoided like the proverbial plague and that involves my least-favorite (to put it mildly) subject — math. The financial experts are right — a budget is a wonderful thing!! I’m actually looking forward to payday and to implementing my new spending plan. I’ll keep you posted!