My wife and I run a pretty tight ship when it comes to tracking our finances. From budgets to reports, we know where every dollar is being spent. But it hasn’t always been this way! My first budget attempt at making a budget was a total disaster.
Before I got married I had several jobs, most of them in the field of technology. Which means that I wasn’t exactly making minimum wage. However, I was lousy at saving my money and spent most of it driving all over town and hanging out with friends.
At the end of each employment stint, I would look at my bank account and say “what happened to all of my money?!” The bank account never answered back.
Around the time that I bought my first house I decided that I needed a budget. My dad had a budget, so obviously that’s what I needed, right? So I went out and bought a copy of Quicken (I believe I had the 2002 version when I started) and got to work. It seemed so easy! Download my transactions into the software directly from my bank account and make sure I didn’t spend too much. Piece of cake.
But it wasn’t. My first attempt at a budget consisted of me looking back at last month’s expenses and trying to match them (or undercut them) this month.
I didn’t come close. I looked at my budget and thought “whoever came up with budgets is stupid”.
The Problem With First-Time Budgets
My expenses were way out of whack when comparing them to last month’s. After all, I was a 20-year-old who had just bought his first house! My purchasing decisions were based on dating my girlfriend, fixing up and furnishing an empty home, and providing services that I’d never had before like cable TV and internet access, phone service, trash pickup, water/sewar/electrical service, and more. Not on managing my cash flow or saving for the future. My expectations (and plan) for my first budget were all wrong.
Instead of continuing to track my expenses for a while I shelved the budget idea, thinking that it was all wrong for me. For the next several months I tried to keep track of my money based totally through my bank account balance instead, which (I learned later) was the opposite (and equally imprudent), extreme to go back to.
It took me another year of low-balance frustration before I made a return to budgeting, and this time it was MUCH easier. I had a spending history and more of a routine to look at. My budget quickly took shape and began contributing to my knowledge of how my money was being spent, and it was great having the ability to show that information to my future spouse as we began planning our lives together
A Lesson In Setting Expectations
It was a valuable experience for me to look back on, and it’s been a good story for me to share with my younger siblings, as they get their start in the working world. Don’t let perfection be the enemy of good by expecting your budget to shape itself. Do what you can with what you have, and allow yourself to learn and grow over time.
I’d love to know how others of you fared with your first budgets. They aren’t always what they are cracked up to be!