Budgeting

After three months of looking, my fiance and I finally had an offer accepted on a home.  Things are quickly getting real!  It was only a couple months ago that I got up the guts to tell my family and friends that I had found "the one," so signing up for over a half million in debt with that person is not only the most "adult" thing I've done to date, it's also one of the most terrifying.

Why so scary?  Having that kind of responsibility on your shoulders makes you realize that you can't just quit a job, put a vacation on the credit card, get drunk and cover rounds for all your new "friends," buy a chainsaw on EBay, etc, etc.  You have to consult the other person on things of the nature because she signed and initialed right next to you.  For me, it's this forfeiture of absolute control that is scary.  

The important aspects that I've quickly learned through this process are two fold:  transparency and planning.  It's uncomfortable to give someone access to your whole financial history, but it's also very important.  Having that slush fund on the side that you don't tell your significant other about doesn't inspire trust.

Furthermore, financial planning becomes very important.  We're spending more on a house that I wanted to in the beginning.  Because of this, our payment is a full $500/month more than I had hoped.  I'm used to having cheap rent and tons of extra cash every month with which to go forth and be awesome.  I fear we're cinching the belt on some of that awesomeness.  

This brings up an exercise that I admittedly did not go through until I was almost 30 years old... budgeting.  

First and foremost, save.  This allows you to make bold decisions, take risks, and enjoy life.  Being tied to a job because you're paycheck to paycheck isn't exactly a recipe for an inspired life.  Next, don't forget about all those fixed expenses that happen yearly, bi-yearly, quarterly, etc.  Car insurance, DMV registration fees, things of that nature.  These should not be surprise expenses that go on the credit card because you bought new skis the month before.  

Here's a sample that I put together for our recent budgeting exercise surrounding our housing purchase:  

Expenses

Mortgage/Rent (+Ins. + Taxes)

Utilities

Water

Trash

Internet

Cell

Groceries

Charity

Shopping_Clothes_Sports

Restaurants_Entertainment

Cars_Insurance_Gas

Life Insurance

Gym Memberships

Home Improvement

Savings

401k

Post tax investments

Emergency Savings

Travel

Total Expenses (Expenses plus savings)

Total Surplus (Expenses-Income)

If your "Total Surplus" isn't actually a surplus and is indeed "in the red," you'll obviously need to adjust things in some manner.  Figure out what is expendable and what is not.  Also, notice that I like to budget in things like travel and shopping.  I believe that the best way to stick with something is to cheat from time to time.  This is true for diets and I've found it true for budgeting.  However, please don't apply this principle to all things, i.e. marriage... that would be bad news.    

Disclaimer:  I'm definitely not an accountant, so the correct use of debit and credit will not be found in this budget.