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Making ‘cents’ of marriage: Budgeting money and time
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By Deacon W. Gerard Gautrau
Guest Column
The following will seem like a boring accounting class, and rightfully so. But if you stick with me and heed my advice, I believe you will take a huge step toward having a successful marriage by budgeting your money and time.
In New Orleans, when we start to make gumbo, first we “make a roux.” In managing marital finances, first we “make a budget.”
What is a budget?
A budget is a tool for planning purposes that itemizes expected income and expenses and identifies surpluses or deficits in cash flow. A similar process can also be used to budget your time and to create a surplus that can be used to enhance your life.
There are a few things that will help in this total budgeting process. First, balance your checkbook monthly; then, review the bank statement together, identifying every item; review any credit card statement, identifying each expense, asking “Was this is a ‘need to have’ or a ‘nice to have’ expense?” It will be good to know what can be eliminated when it comes time to adjust the budget.
Creating a money budget
First, identify all your positive sources of income, which include salaries or hourly wages with reasonably estimable overtime. Also include other incomes such as that from family, annuities, dividends, savings or other fixed recurring income streams such as child support or alimony.
Next, identify recurring negative cash flows, beginning with fixed expenses such as rent; all insurance; hospitalization; tuition; tithing and loan payments; and savings (401K, IRA and other investments).
Create a “Rainy Day” fund that equals, at least, six to 12 months of average after-tax expenses.
Why treat savings like an expense? While it is not an expense, it does represent an outflow of cash affecting your ability to purchase items or pay bills. Always remember to pay yourself first!
Now identify semi-variable (regular recurring payments that vary in amount such as utilities (gas, water and electricity); gasoline, car maintenance or public transportation costs; and those dreaded income taxes.
The last group of cash outflows will be called variable because they vary in time, frequency and amounts. They are events (holidays, vacations, birthdays and anniversaries); and other variable expenses including gifts to each other, school supplies, “me” money, and contributions; and purchases of assets such as furniture, clothing, tools and equipment, and one-time purchases that are permanent or that last more than a year.
Finally, subtract the total of all the cash outflows from the total of all sources of income and – congratulations – you’ve made a budget for your first month!
To be effective, you must budget for a six- to 12-month period since some payments or expenses occur at different times during the year (car insurance, for example, might be paid quarterly or semi-annually).
Hopefully, at the end of each month, there will be a surplus (income exceeds outflow). But if there is a deficit (outflow exceeds inflow), this is where planning is needed. You must try to create surpluses and put them aside each month to prepare for deficits.
Creating a time budget
Begin by creating a shared calendar. Use a large, easily visible and accessible desktop calendar.
(If possible, also use your phone or email program to share upcoming events as soon as they are known, and adjust, in the same fashion, when dates or times change.) Suggestion: On the desktop calendar, different colors can be used to identify which person’s event is being listed; or the different colors might represent different types of activities.
Begin by recording all fixed recurring events such as birthdays, holidays, anniversaries and other special dates.
Next, enter all variable recurring events as soon as possible! These include meetings that happen on the first Thursday of every month or quarter; appointments that occur on Tuesday and Friday every week, such as physical therapy or exercise events that happen regularly; “me” time events, including reading, hobbies and prayer; getting kids to or from the school bus; date nights and other such events.
Don't overlook event times that vary on dates but may be repeatable, such as doctor’s appointments, girls’/boys’ night out, and kids’ activities like homework, sports practices, other extracurriculars; other non-recurring dates such as work commitments, club or other meetings, out-of-town travel, showers, Mass, sacraments, baptisms, first confession, First Communion, confirmations and other “emergencies.”
After all the above, I don’t know about you, but I’m worn out. Please stick around just a little bit.
Why create budgets
Budgets are important to help maintain a sense of trust and transparency in marriage. Through these shared financial and social experiences, the marital bond is strengthened. As a side advantage, you will become an example to your child and others as they share in your ordered and meaningful lives.
In closing, if you are considering marriage:
1. Put together a wedding event budget and stick to it. If possible, do not go into debt! If you do, be able to pay it off within six months. (Hint: Do not forget to include it in the budget). Put together a six- to 12-month post-marriage budget and determine if there’s money left over at the end of each month (at least 10% of reliable income).
2. Update the budget, at least semi-annually. Keep a copy of the existing budget for reference.
3. If, as a couple, you are getting into a marriage with debt, remember to budget an amount to pay this off as soon as possible. Pay off interest-bearing debt first. Always negotiate a payment plan if you are “stretched out.”
4. Do not dig yourself a hole that will lead to mental and financial stress, which are leading causes of divorce. When necessary, seek advice from a financial consultant or marriage counselor.
5. Existing debt of the individuals should become “our” debt. Any income after marriage should become “our” money. To consider any funds to belong to an individual demonstrates selfishness and a lack of commitment to the other party.
6. There will be tough financial downturns that might cause you financial pain. Your “Rainy Day” fund will help your deficit to be diminished or eliminated altogether. If not, just pivot, and continue to make tough choices regarding expenses; or borrow, as little as possible, if necessary. Resolve to begin paying this off first when things turn around.
7. Regarding time, always review monthly where you spend your time outside of work. Be sure that you are available for your spouse, your family, and for yourself. If not, resolve together how you will immediately make changes for the coming month. You will be glad you did.
Conclusion
If all the above seems overwhelming, or too much work, welcome to marriage! You must be prepared to accept this responsibility. If you are not committed to making it happen, then you're probably not quite ready for marriage.
When couples marry, they become one new Trinity – male, female and God. Together they can overcome all trials and enjoy love and happiness, for richer, for poorer, in sickness and in health, until death!
As always, whenever making life decisions, major or minor, seek counsel from the Lord in couple's prayer, listen to his advice, and take it!
Deacon W. Gerard Gautrau is a permanent deacon at St. Ann Church and Shrine in Metairie.