Financial Figuring

Over the weekend SCL and I sat down with our calculators and computers to construct a rough monthly budget. Up until now, we've just been keeping track of our joint purchases with receipts, but now that we've opened up a joint account with ING Direct, we needed to figure out what our monthly contribution would be for joint expenses, which is practically everything for us.

I thought we might have some minor disagreements about how much to budget in certain areas. At times when one of us would suggest a budget item, we'd sit in silence for a bit. I'd be thinking of a figure but was hesitant to say it aloud, worried that it would sound unreasonably high or low. But in actuality, it took us very little time to come to a consensus and now I'm looking forward to seeing how accurate we were in our estimations.

Tips for budgeting together:
1. Use Excel, which not only adds up everything as you work on it, but also provides nifty graphs to analyze your budget break-down.
2. Start with fixed expenses, like rent, utilities, etc. from most expensive to least expensive and then do the same with discretionary spending, like going out to eat.
3. If needed, clarify what categories cover. For instance, I wanted to know if groceries covered paper products or if that was under household expenses. Also, I "needed" candy the other night, and I wanted to know if that was under groceries (because it's food) or under "fun" (since candy is totally fun). You can also decide these things along the way.
4. Decide what you will do if you have a balance at the end of the month. Will you roll it over into the next month? Will you put it into a savings account?
5. Determine how you will keep track of purchases, either using a checkbook, online banking, or an Excel sheet. I'm also considering signing us up for, which tracks spending by categories.

I hope this is helpful. I'll keep you updated on how we did during our first month!

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