Jerrie and Gail’s Budget — Family Contract, a 60-Year Process

A written agreement is not to make dishonest people honest, but to help honest people remember their agreement.

I’ll share what Gail and I learned since starting a budget 58 years ago. I’m including a spreadsheet of the budget items I’ll discuss: Budget—A Family Contract.

A written, mutually negotiated, and agreed-upon plan to spend our money reduces conflict. If we want to spend more money on any item, we have two choices:

1. Make more money.
2. Spend less on some items and spend more on other items.

Decide on the categories that need to be funded. List the cost for each category by week, month, and year. We do a monthly budget. However, we don’t wait until two weeks before the property taxes to budget that expense. We set aside the amount each month. When February comes, we’ll have the money to pay our taxes. We also pay insurance once a year. We fund those payments each month.

Categories and Comments

Contribution

Since our marriage, our weekly contribution is the first item we have budgeted for. Since we decided on a percentage to give each week, it’s easy to budget. It’s the amount we make times the percentage that we’ve chosen. We write a check for that amount. The four congregations where I preached in school progressively paid us less money with each change. We gave the same proportion but fewer dollars to each congregation.

Miscellaneous Contribution

In our first full-time work, there were wedding showers, baby showers, and graduation gifts. We added another category called Miscellaneous Contributions.

Emergency Fund

Having 3 to 6 months’ income in an interest-bearing savings account is good. That gives more freedom and reduces anxiety during job changes, sicknesses, and other unanticipated financial strains.

Investment

After accumulating an emergency fund, it’s time to invest for retirement. The younger one gets started, the more will be accumulated. Get basic knowledge about investments, and with wisdom and references, choose someone who knows more about the process than you to help.

Groceries

The most peaceful part of the process is deciding what fits in each category. There’s no correct answer except agreeing on it before you start. For instance, what’s included in groceries? Does that include house-cleaning supplies and personal items such as toothpaste and deodorant?

Medicine

We include medical insurance, doctor and hospital expenses, prescriptions, and over-the-counter medicine.

Rent or House Payment

The more one saves for a down payment, the less the house payment will be. The shorter the loan term, the quicker you’ll get a raise to spend on other items in your life. Pay-me-now or pay-me-later. Have more disposable income or pay other people interest.

House Expense

We include small items such as light bulbs and air conditioning filters.

House Repair

We save monthly to repair and replace heating and air conditioning systems, water heaters, and the roof. When you’ve saved for a few years and one of these can’t be repaired, it isn’t an emergency. I like the quote, “The only problems we get are things we can’t handle. If we could handle it, it wouldn’t be a problem.”

Utilities

This includes electricity, gas, water, garbage collection, cell phones, and internet. We bought an inside antenna and cut the cable a few years ago. We rent movies that we can’t get from a local station or smart TV services. Recently, we changed our cell phone provider and saved half.

Insurance and Property Taxes

I pay the first of each month into a money market fund that covers home, auto, umbrella, long-term care insurance, and property taxes. When the payments come due, it isn’t an emergency.

Furniture

We budget a few dollars each month for furniture. We don’t need any furniture now. However, refrigerators wear out, washing machines and dryers malfunction, and can’t be repaired. This is part of our philosophy. The more that can be anticipated, the fewer emergencies you have. Machines malfunctioning is not a surprise. No one has invented a perpetual motion machine.

Car Payment

We drew a line in the sand several years ago. We stopped making car payments to finance companies and started making car payments to ourselves. You can learn more about that on my podcast, Gleaning Mustard Seeds, Episode 36, Maintaining a car and casket fund.

Car Expense

This includes gasoline, oil changes, new brakes, and other minor service items. I’ll discuss this further under the Service Contract category.

Service Contract

Thirty-eight years ago, we started our own extended warranty company. When we buy a new item, a checkout person asks, “ Do you want to buy an extended warranty?” We ask, “How much is it?” We record the amount and add it to our Service Contract fund. You can learn more about that on my podcast, Gleaning Mustard Seeds, Episode 36, Maintaining a car and casket fund.

Entertainment

This pays for eating in restaurants, movies, ball games, and other fun things.

Gail’s Clothes, Jerrie’s Clothes

In our early married years, the amount in both those categories was zero. When we could afford a clothing category within our budget, I felt guilty when I bought a sports coat and slacks, then remembered that Gail hadn’t bought a new dress in a long time. In our agreement, our clothes category includes personal items, such as toothpaste, hairspray, deodorant, and other items. I often hear that money is the main topic of conflict in marriages. That hasn’t been my experience. One of our most significant early conflicts was the right place to squeeze the toothpaste tube. We settled that by Gail buying her toothpaste and me buying my toothpaste, and we each squeeze it anywhere we want.

Christmas

We forgot that people spend more money at Christmas in the first couple of years of our marriage. That was an emergency for us, but it was no longer an emergency once we started budgeting a few dollars each month. Gail is the chief present-buyer for Christmas. She has her budget and decides what to spend on each person, including decorations and other Christmas expenses.

Miscellaneous

This category includes what isn’t in any other category. The less we leave to miscellaneous, the better. We buy newspapers, greeting cards, and stamps. Most other items have been covered.

Tools (Books)

Beginning with our first budget, I had an amount I could spend on books. Other people will have tools they need for their business, so this category would be funded in that area.

Grandchildren

Early in our grandparenting, Gail spent most of her fun money on the grandchildren. She suggested budgeting a few dollars each month to spend on them, which has worked well.

Gail Spend and Jerrie Spend

This is a few dollars each month, and each of us can use it to buy items not included anywhere else in the budget.

Observations

• This budget won’t work for you and your family. It includes some things that you don’t need. You’ll need some categories that aren’t included. To have a perfect budget, eliminate the items you don’t need and add the ones you do.
• The key to this budget is to add your income in one column, your expenses in the next column, and the sum will be the same. Subtract your expenses from your income, and the sum is zero. This is a zero-based budget.
• Gail and I do our money each week. We balance our accounts, adjusting the monthly amount to add and subtract in categories so we don’t spend more than we make.
• I haven’t found a budgeting app that I like. I developed an Excel spreadsheet that works well for us. We use the envelope method. However, our envelopes are in a digital spreadsheet.

If this interests you, feel free to contact me. I’ll be glad to answer questions. If this seems complicated, don’t despair. It’s taken us 60 years to work it to this point. Try not to learn very much, find a “mustard seed,” and improve your stewardship.

What has worked well for you in using money wisely? Please comment below.

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