I just watched ‘Oprah’ today with Jason, and it was an episode about money troubles. This is going to be a pretty real, raw post. Several months back– probably, what? seven?– I was sitting at home, same position, watching ‘Oprah’. It dealt with credit card debt, and finances. And MAN– I felt these couples. We were making a lot, but it seemed to only barely be enough, and I knew that it was affecting J and I– our marriage. We rarely fought, but when we did it was money. Until you’ve lived poor with someone, you don’t know how dramatically it affects your mood. Never mind the big things like making sure all your bills are paid, which is a huge stressor– just take away all the simple pleasures that extra money brings. Going out for pizza with the family. Paying for the gas to visit relatives. Things that, once you’re on top of it, you take for granted– you can just DO them. Just imagine that you CAN’T do them, and you don’t ever get a break, and it makes you depressed and angry. And I was sitting there, seven months ago, watching people who were way worse than we were and way older than we were, and I had this epiphany: today. TODAY. I am getting control of this today. I am not going to be in this place in five years. I will not be in a worse situation. It is going to suck, but I am going to look at this in the face and make sure that we are debt-free as soon as possible, and that we never go down this road again.

Today we watched that show, and we are completely on the other side of this. Yeah, we could have a little more– we could always, everyone, have a little more– but we are comfortable. We are consistently making money, each month, versus just breaking even. We don’t live paycheck to paycheck. We can eat out a few times a week if we wanted, we can go on date nights– I don’t have to check our accounts with fingers crossed to make sure we can cover it. I know we can. I can tell the kids that they can have that toy, sure; throw it in the cart. It’s okay. We can afford it. I got almost as emotional watching ‘Oprah’ today as I did the first time, because I KNOW what a struggle it is, and I know what it feels like to have that security now, and I can only imagine in two years when our car is paid off and all our non-house debt is gone and THAT FREEDOM. I never for a moment take it for granted.

I also know there are a lot of you right now really struggling with this– Americans as a country have a hard time balancing a budget, and this year is the first time in my entire adult life that I knew exactly what we made and what we spent. Seriously. For a long time, I didn’t want to even know (sort of the little kid way of burying your head under the blankets so monsters won’t find you). I let J do it all. I didn’t want him to talk to me about it– I put the burden squarely on his shoulders. And you know what? That is NOT FAIR. To either of us. We made a deal to be in this together. It’s not fair for him to be solely responsible for our financial success or failure, and it’s not doing me any favors to remain ignorant. So, here is my advice– and most of this entry will be advice; it will be the flavor of THIS WORKED FOR ME– please, get both parties involved. Yes, it’s not going to be fun. Yes, you will probably find out one or both of you are spending something the other doesn’t know about. Guess what– it’s going to come out sometime. Better to happen when you’re both in a forgiving mood and can explain yourselves.

Next, make a budget. This is the most daunting part. It is really, really scary for most people to confront what they make and what they spend. Budgeting is the equivalent of stepping on a scale. You’d kind of rather not know about those 20 extra pounds. But– here’s the truth– not knowing doesn’t make you skinnier or richer, right?

Here’s some positive news: budgeting is not that hard. Really. Sucking it up and sticking to it is the hard part, but budgeting itself is simple math. I keep track of every purchase we make in an Excel spreadsheet, along with every source of income. At any given time, our bank account and my spreadsheet should be within $20 of each other (and I check about two or three times a week, just to make sure). A few notes about this–

Doing it day-by-day versus monthly. This has worked wonders for us. Have it so that on THIS day, you will have THIS much and be spending THIS. Before, we cut our annual income into 12 months and then subtracted all our expenses, and then looked at what was left over. That is NOT the way real life works. You don’t get all your money at once, and then take out all your bills at once. Not only is income and payment staggered, some months you get paid different amounts depending how the weekdays fall. This seems rudimentary, but it took me years to realize what I was doing wrong and why we were having trouble making ends meet when we were making enough on paper.

Record EVERYTHING. If you’re anything like me, you hardly ever make big purchases. You make a ton of little ones, though. Write down every time you get a snack at a gas station, stop at McDonald’s, rent a movie, buy coffee, get a toy or home good. Things really add up. Fast. If you go out for fast food three times a week, you could be spending around fifteen dollars (lowball estimate). Each time you’re only spending five bucks; which by itself, seems like nothing. In a month, though, you’re spending fifty dollars. Writing it down helps you recognize a pattern, and track how much you’ve already blown at Burger King.

Spend it on paper first. Always. This is another thing I had to train myself to do. I can almost promise you that 70% of your planned purchases will be nixed the minute you punch it into a spreadsheet and see your account balance drop. (Likewise, when you take out the hypothetical purchase and watch the numbers pop back up, you’ll feel like you actually made money.) It also lets you give yourself a limit before you hit the stores– maybe $100 on clothes won’t hurt you, but $200 will leave a much bigger dent. NOT TO MENTION when you know, really KNOW, that you can afford it, the shopping is that much sweeter.

Your goal is to have money left over at the end of each paycheck. This seems obvious, but I know we did this, and friends I’ve spoken to have too– if it’s in the bank, it’s there for the spending. If you have $100 after you paid all your bills, you just won a $100 dinner and movies weekend. NO. No, no, no. It’s okay to spend some, but really, putting it away for a rainy day is so important. Because, inevitably, your car will need $100 worth of repairs, and you will be flat broke. And if you have $100 at the end of each paycheck, then you have a few hundred extra dollars each month. Which is thousands a year going into your savings.

Cut out unnecessary things. Again, sounds obvious, but a lot of us don’t realize how much we spent on frivolities. $30 a month on Warcraft, $15 for Netflix– there’s our water bill. If you have a cell phone with an inflated plan, cut it back. We saved $100 a month calling Cingular and telling them to lower it to the basic cell deal. Maybe you don’t really need HBO and Showtime, or maybe you can drop down in your internet speed and still survive. Heh. Whatever it is, figure it out, whittle it down. This doesn’t have to be everything– you don’t want to kill yourself in a monastic lifestyle. Pick one or two things that you genuinely love and use constantly, and then get rid of the rest.

Sell stuff. Everyone has things lying around that they never use, but they’ve never thought to get rid of. I made $150 selling old Ikea chairs sitting in our garage. If you haven’t touched it in an entire year– all four seasons– consider getting rid of it. (Obviously there are a few exceptions to this, but it’s a good rule of thumb.) (This includes clothes. Females, especially, are notorious for holding onto Skinny Outfits for a decade or more. Guess what? Sell them now, and when you lose the weight, you can treat yourself to a new wardrobe will all the money you have.)

Shop around. Most of us are planning to save money tomorrow. We’ll eventually start making those calls to companies and get better rates. But think about how much you’re wasting right. this. second by not checking what else is out there. You could be savings THOUSANDS of dollars a year by switching credit cards, phone companies, auto coverage. Imagine you, living exactly as you are now, except there suddenly being an extra $500 in your bank at the end of every month. In most cases, you won’t be sacrificing anything, and you’ll be getting richer.

Pay bills as early as you comfortably can. If it’s due on the 15th, pay it on the 8th. I try to always give myself a week buffer to make sure I’m not late. And I have been screwed with in the past, HARD, where a company would dock me because I paid it online on Friday afternoon, and it was due that Sunday, and it was after business hours so it didn’t come through till Monday. Some companies move their due date up a day or two without warning you. Don’t give them the edge. The longer you can pay early, the better it looks to the company (and in some cases, your credit rating). Companies you suck up to will treat you better when you ask favors, too.

Get a system going. OHHH BIG ONE. THIS SAVED MY WHOLE FREAKING LIFE. If there is another adult out there that didn’t know this (and my parents did this, and I saw them do it, and I never put two and two together)– please listen. Go out, today, and get a filing system. Get one with like thirty folders. I know, you’re all– thirty folders? What could possibly go in there? YOUR WHOLE LIFE, DUDE. Ours is as follows: Copies, Pending, Jason, Becca, Receipts, Information, Misc, Paychecks, Taxes, Warranties, Medical, House, Auto (and Cards, where I save all the birthday and holiday cards; which is not necessary but it helps me have a place to stick them). You may need more or less. What happens is: I get the mail, I open it (open your mail, by the way; we used to be the rulers of If I Don’t Open It I Can Claim Ignorance), I throw away the envelopes, and I either deal with or file the contents. If it’s a bill, it either gets paid or it goes in Pending. If my health care company is sending me a transcript, it’s Medical. Our HOA is changing its rules? House. Everything has a place, and this makes the entire world run smoother– and it only takes maybe an hour to set up and two minutes a day to keep up. I remember the very first time we needed to prove we bought something, and I was able to thumb through Receipts and pull it up. I felt like I’d conquered the world, seriously.

Last but not least, plan for unsual expenses. Know as far in advance as possible about a bill. Sometimes big ones pop up out of nowhere, but often you’re aware it’s coming and need to budget accordingly. Examples: property taxes, bi-annual insurance, car repairs, a vacation, anything requiring a present (wedding, birthday party, baby shower, Christmas). If you don’t have enough money to pay for it, it’s way better to be aware of that six months BEFORE the bill hits– you have time to curb spending or maybe take outside work (we usually do a slew of web jobs to pay for major taxes). Don’t let it creep up on you.

I know, this is a lot, and you’re probably all, “I expected to come here and read about babies, and instead I get a financial lecture.” I’ll do babies tomorrow. Today is about putting cash in your pocket and sharing everything I’ve learned; even if it’s trite, it’s obvious, it’s annoying, it’s whatever. These are things that LITERALLY turned our finances around in six months. I have seen the other side of this, and I want you all here with me, because it feels every bit as good as it looks.