My Journey out of Debt

Featured customers currently enrolled in a CareOne Debt Relief Plan, share journey to become debt-free; hear how they juggle family, finances, and more.

Taking Control....The Whiteboard Budget

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With the work week over, I packed up my laptop late on a Friday afternoon and headed home. Upon arriving, I opened the door and greeted my family, as a much Taking Control....The Whiteboard Budgetneeded weekend began. I hung up my coat, took off my shoes, and plopped down on the couch. My wife and I exchanged the usual "How was your day?" questions and discussed dinner, as well as our weekend plans.

My wife asked me to remind her how much money was in our weekly entertainment budget, and how much we had left for that week. We had already had some fun expenditures during the week, and she felt totally in the dark with respect to how much money we had available, "as usual."

Wait a minute......"as usual?" 

Since enrolling in our debt management plan, we had cut out expensive weekend getaways, drastically cut back on eating out, and put a cap on our groceries. At the start of the year we had switched from a monthly bucket for entertainment to a weekly budgeted amount. 

I was under the distinct impression that we were communicating better, so this declaration of being in the dark, "as usual," caught me completely by surprise. I answered her question with an approximate figure, and put her comment on the back burner for further processing at a later time.

Over the course of the next week, I thought about her "as usual" comment frequently.  We are now able to discuss more easily with each other whether we can afford to buy something, or whether doing a particular activity is a good use of funds.  However, I realized our budgeting and communication about the specifics of our budget still needed a lot of work.

One evening, as I was sitting at my computer desk, I pulled out the piece of notebook paper that I referred to as "The Budget."  It had been folded every which way, was very worn, and one of the corners had been ripped off.  It had an aged look that rivaled the Declaration of Independence. I had two columns labeled "Beginning of the month," and "Middle of the month." It listed my primary twice a month income, subtracted the bills paid from each paycheck, and the amount left over after paying the bills. The leftover amount in each column was divided by two to provide a weekly figure of available funds. That's it. 

There was no mention of :

  • My wife's income
  • My secondary income from freelance writing and secret shopping.

It didn't break down expenditures for

  • Gas
  • Goceries
  • Or even the kids' allowance. 

All of these things had just been assumed to be purchased using the weekly amount available after paying the bills. Thinking back to a recent discussion I had with a coworker of mine that somehow steered itself into the realm of personal finance, I remembered the color coded, airplane cockpit resembling spreadsheet he showed me that he called his budget.

All of a sudden, my wife's comment about being in the dark "as usual" made perfect sense to me. 

She's in the dark, because I'm in the dark. Sure, we would know if we spent way more than our weekly amount, and then say we would just spend less the next weekend - but never really keep track of how much we went over, and if we fully recovered the next weekend. Horrifyingly, I basically would just cross my fingers and hoped that we had enough to make our CareOne payment at the end of the month. I thought about the times this winter when I sent my utility bill payment in late because I needed to make sure there was enough money in the account for that huge debt management payment on the 28th of each month. 

Sitting in the exact same chair where I had come to the realization in June 2009 that our debt problem had reached a point that we needed to do something drastic, another epiphany hit me like a truck. My budgeting skills are horrible, and until that is corrected, we will never make it to the end of our debt management plan. Never.

Sooner or later we'd end up not being able to make our payment, our creditors would kick us out of the plan, causing interest rates and monthly payments to skyrocket.  We'd be in a hole we'd never dig out of.

I needed help figuring out how to create a more detailed budget plan, and didn't know exactly what I wanted other than it needed to be more detailed than what I had. I took out a piece of paper and started writing ideas down. I started and scribbled out my work half a dozen times. As I sat there staring at the ceiling, I remembered the Destroy Your Debt budgeting tips that our friends here at CareOne have been posting on their Facebook page. I took a look back at the tips and started writing on a fresh piece of paper.

Expense Tracking:

With the help of my checkbook register and my previous "budget," I wrote down every expenditure we incur during the month: Bills, gas, groceries, my daughter's dance class tuition, the kids' lunch money payments for school, and everything else I could think of.

Organization:

I started up my favorite spreadsheet program and made a template page to track a month's worth of income and expenditures.   

  • First, I added a row for each type of income we have
  • Next, I added a row for each monthly expense we have
  • I added a few "dummy rows" to remind me to add anything that may be a one time expense for a given monthTaking Control....The Whiteboard Budget
  • On the bottom of the sheet I included a row where the funds left over for discretionary spending would be calculated

By performing these two steps, I realized that on the last day of the month, we would know what the variable income amounts would be (my wife's income and my freelance writing and secret shopper income) for the next month, as well as the bills that vary month to month, such as utilities. So, I made a mental note that on the last day of the month, I should be able to fill out the next month's budget sheet with accuracy.

This was a good start, but it just wasn't complete.

  1. First, the new spreadsheet was a monthly budget, and didn't break down entertainment expenditures on a week by week basis.
  2. Second, my wife would rather stab herself repeatedly with a fork than stare at a spreadsheet, so I wondered how I could use this to really draw her head and shoulders into the budgeting process. 

I smiled as the answer came to me: calendar whiteboard.

My wife has a calendar whiteboard on the refrigerator that she uses to keep track of events for a given month, such as sports' practices, school events, days off, etc. At the beginning of each month, she pulls it down onto the counter, wipes it clean, and starts over for the next month. I wanted to do something similar, only with our budget. It's something she is familiar with, and can identify with.

The next day I told her what I had been thinking about, what I had came up with, and asked her to help fill in the blanks. We decided that at the end of each month, when we knew the income and the bill amounts for the next month, I would fill out the spreadsheet on the computer to provide historical month to month tracking of our budget.  Then, the next day, we would fill out the whiteboard budget calendar together. We'd mark the days on the calendar in green for when we'd receive income. In red, we'd write known expenses on the day they were due.

Other "one time" expenses (things like bridesmaid's dress alteration, summer baseball registration, etc) would go on the corresponding day in black. After all income and expenses were on the calendar and in the spreadsheet, we'd look at what we had left for discretionary spending, and decide how much to allocate to each week.  Weeks that have special activities (such as a family wedding) would probably require a bigger percentage of the funds.

Basically, it was like putting the checkbook register for the next month in calendar form. 

We would place a small basket on the desk for receipts to keep track of discretionary spending. We agreed to sit down each Sunday evening to go over the week's spending, and adjust the rest of the month's spending as necessary on the whiteboard calendar. 

I walked away from our discussion feeling really good about this new budget process.  For years, while I was hiding our debt problem from my wife, I had to do all the financial work myself.  When we joined the debt management plan, we improved our communication with respect to individual expenditures, but in order to be completely successful in our financial makeover, we have both realized that our financial life has to be a complete team effort. 

As we transition to this new process, there will undoubtedly be tweaks that need to be made. I really believe that my wife and I are overcoming a huge obstacle in the handling of our finances. I hope that we will not only develop a budget system that will help us live within our means, but also continue to improve our communication skills to talk freely about our finances, and finally, truly work together on our journey to becoming debt free!

Related Links:

 Communication

A Straight Talk on Debt; Weekly Reading - Organizing Your Finances

A Change in Financial Seasons

Travis PizelTravis Pizel

Travis is a contributing writer for the My Journey out of Debt blog and is a very active member of the CareOne community forums. Travis is currently enrolled in a CareOne Debt Management Plan (DMP). Travis very candidly shares his personal journey to pay off his debt and the tips he's learned along the way. As a father and husband he provides a unique perspective on balancing debt, finances, and family.

Follow Travis on Twitterhttp://twitter.com/debtchronicles 

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  • The whiteboard and breaking down your expenses week by week are both great ideas. A big advantage of the whiteboard is it's always out where you can see it and refer to it easily. I'm not sure it would work for me because I'd have to hide it when other people come over, but I do track paydays in my pocket planner. I get paid twice a month also and I use one check for rent and one for bills. It's really easy to spend all of the "bills" check at the beginning of the month and then have no money for entertainment at the end of the month. Looking forward to your next post!

  • Thanks for your comment, The Girl Next Door!  My wife said exactly the same thing about the whiteboard!  She didn't want to leave it hanging on a wall, or in plain sight either - as we have friends that "drop by" just to say hello when taking dogs out for walks, etc.  The one I bought was 17" by 23"...so not cumbersomely big.  When we're not looking at it, it is tucked out of sight in a special place in a closet - until the next budgeting session, or we need to discuss expenditures.  

    Thanks again for stopping by!

  • Travis, another great post.  It is amazing to find that when we think things are in order they really are not quite where we need them.  Everyday is a learning experience.  Thank you for sharing yours.  I know with the will you have that you and your wife will succeed on your journey together. :-)

  • Thanks for your never-ending support, Monica!  Life is fluid, and so should our way of doing things.  I would imagine that eventually we'll have to "re do" the way we do our budget as well.  As soon as we stay stagnant, we'll get into trouble again.

  • Good for you Travis! The whiteboard idea sounds like a great way to keep your wife in the light about your budget -- especially since she doesn't care for spreadsheets.

    I have a separate checking account that I designate as our spending account. I know exactly how much we'll need for all of our monthly expenditures, retirement savings, debt repayment, etc. From what is left over, I make a deposit to our "spending account" for a certain amount each pay period. We use our spending account for groceries, gas, gifts and entertainment. So, if we have quite a few birthday presents to buy one pay period, we spend less on entertainment to balance things out. It works really well for us!

  • I seriously have fallen head over heals in love with your idea of having two seperate checking accounts.  I feel a "tweak" to the system coming... Thanks for sharing, Jenny!

  • The communication thing is something I think all couples can relate to.  Just when you think it's all settled and squared away, you realize you've missed something.  It still happens to me even being debt free.  Who really WANTS to do a budget?  I just finished a blog about budgeting after you're debt free, and ironically, it's still difficult.   Thanks for the post!

  • Great comment, Cheryl - it's great to hear the perspective of someone that has completed the program and to remind us that it's not all puppies and unicorns after a person's debt is eliminated - we have to keep working at it to prevent ourselves from going back into the hole!

  • Started to use a second checking account just for variable spending in January.  I  also use Quicken for tracking cashflow.  Well, liike Jenny posted, it has been a lifesaver for me.  My main checking account is where I get direct deposit and pay all fixed expenses.  I then write a check monthly to the second account for variable expenses.  I have paid off a significant part of my  CC debt because at the end of the month, I roll over any extra money in the second account and apply it to debt.  Also,  I know by looking at the balance at any point in the month what I have to work with.  Good luck!

  • thanks for sharing your thoughts, MJJ.  Great to hear someone else having success with having multiple checking accounts - I still love the idea, but haven't pulled the trigger on operating that way.  You're comment has made me think about it some more....

  • Being about half way through 2011, I thought this would be a perfect time for me to revisit the four things I committed to in January and see if I'm following through or not. And since the kids recently got their end of the year report cards, I'll do

  • I want to be the Abraham Lincoln of my household, and I'm armed with all the tools necessary to make it happen!

  • Surprisingly, the gentleman on the other end told me that he understood, and that times were tough for everyone. He said that he had a pile of medical bills that he'd probably be paying for the rest of his life. As long as I sent a partial payment each

  • A Debt Analysis was done by "Money Coaching" , which was very disappointing to me because the way I understood it, it was their way or the highway with a twist. I would have to pay them a monthly fee until I was out of debt, and give them all our credit card numbers and bank information including passwords, through E-mvelopes.com and continue their monthly billing if we were going to stick to the system when I was out of debt!  My solution was pay the early termination fee, and run, otherwise it would cost over $2,000.BEWARE!!!

  • I know not everyone has a PNC bank nearby... but their VIrtual Wallet tool is VERY powerful. It has a calendar tool very much like the one you are making on your whiteboard. It shows you a calendar, with your paydays marked, any bills you have scheduled out, any automatic deductions (like CareOne!) and an you can even add checks you have written. Another part of the software tracks your expenses using user specific categories.

    Using this tool helps my husband and I to always know where we stand on our money left for life situation. It even has a tool for savings and shows you how much money is Free (not promised to bills before your next payday. And it also shows us exactly where we spend most of our (not-so) expendable income.

    I highly recommend checking out PNC VIrtual Wallet and phone apps. It will literally change the way you handle your personal cash-flow.

    (and i promise, I don't work for PNC. I just love tools that work!! :) )

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