I am lucky. I married a man that has financial talent. It is what he does for a living. He has spent his career rescuing companies out of economic trouble. The company he now works for was on the brink of financial ruin until he stepped in on his white horse. The owner keeps a letter from the bank in his top desk drawer to remind him how close he came to losing it all. My husband is a hero!
When we were fairly newly married and learning how to merge two financial lives he set us up on the "bucket" system. Actually they were plastic stadium cups from Texas A&M. Each Aggie cup was labeled and in each cup a certain amount of money was placed. It really helped us understand where we spent our money. When the cup was empty that was it. Sometimes we had to "rob" money out of one cup and leave a note explaining why we "stole" the money. We no longer use that system but it taught us the lessons we needed to learn about money.
I admit I'm not good with money but I am lucky to be married to a smart smart man. He has helped me become a fiscally responsible adult and I am so grateful for his wisdom.
at Julie's request I'm writing....
More on the "Bucket" System....
Every time we got paid all the money was divided up. First, checks (or automatic deposits) were cut for "fixed operating" expenses. These are the things like rent or mortgage, electric and/or gas, phone and savings. More on the savings part later.
Credit cards were not to be used unless...
a.) it was a business expense and the company was reimbursing us.
b.) check or cash was not permitted. An example of this would be renting a car on a vacation.
c.) it was agreed upon in advance by both of us. An example of this maybe a new suit for work or something major for the car. Basically big purchases where it wasn't practical to pay by cash or check.
Each cup was labeled with the category of the weekly expense items:
"Gas for the car"
Any item we regularly spent money on had its own cup. Each pay period after all the fixed operating expenses were paid the rest of the money was withdrawn in cash and placed in the various cups.
I know what you are thinking. There is no way I'm doing that! That is far and away the most ANAL thing I have ever heard. And it is! I will be the first to admit it, but take my advice it works!
O.K. now to the savings part. Saving is like paying yourself. It is the VERY MOST IMPORTANT part. Do you hear me? I'll repeat it. SAVING is Paying yourself. It is the very most important part. Even if it is only $5.00. That $5.00 adds up. And don't forget your 401(k). Please tell me you are maxing out your contributions. At least contribute to the level your employer matches. Please do this. Skip the Starbucks and increase your pledge to your FUTURE self. PLEASE!
When my kids were toddlers I use to pay myself $.60 a day. Honestly I did! I took and put $.60 in a cup everyday. Then every so often I took that money to the bank and made a deposit. Sometimes I used that money to buy art supplies.
O.K. I'm hopping off my soap box now. If I helped just one person then... Yea for me! And a bigger YEA for you!