The budgeting begins…
Mr. Shy works in IT and Mrs. Shy works in education. Mr. Shy has a current base salary of 61k a year and Mrs. Shy has a current base salary of 21k. Both of our jobs do allow the opportunity for over time, however we do not calculate that in the base salary as it is not 100% consistent. Naturally adding these both up brings our household income to 82k a year.
The Financial Strategy:
In most house holds the discussion on how to pay bills is a common and sensitive topic. The answer to this topic is almost always different for each person/couple. After doing some research, as well as discussing with family and friends, we built a payment plan that worked for us. Each of us agreed we liked having our own spending money, so this lead us to keeping a percent of money in our own bank accounts. We then discussed the best way to split the bills each month. The original plan was to add everything up and do a 50/50 split. This plan seemed to work for a lot of people we knew, it is simple and straight forward. However, once we did the math behind it, we realized it wasn’t the most “fair” for us. For instance, I would bring home around $3000 each month where as Ms. Shy brings home around $1800 each month. Lets say for instance the bills for the month totaled around $3400 (including mortgage). We take that divide it by two and come up with $1700 a person at the end of each month. I then have a remainder of $1,300 and Mrs. Shy a remainder of $100. Naturally Mrs. Shy was NOT to happy with this scenario and I 100% agreed. After that we decided to base it off the percentage of each others total paycheck. We went through and shuffle around bills to get a specific percent average for the both of us. For instance, I would take the mortgage payment, internet, my insurance, etc. Mrs. Shy would take utilities, her car payment, insurance, etc. (We also included lunches and dinners in these averages). What this ended up doing was allowing Mrs. Shy to pay an average of 60-70% of her paycheck to all bills (depending on the month). I would end up paying around 65-72% of my paycheck on bills.
All in all it came down to this:
- Moving the bills around so that each of us had a fair bill payment each month.
- Opening a joint account in which we pay bills from. (Each month we both throw our % in there to pay the bills).
- Keeping our own individual bank accounts so we could have our “Free Money” with the remaining balance. This would allow us to buy things that we wanted and the other couldn’t complain because all bills have been paid for.
This system works very well for us.
After being successful with the financial strategy above we have now decided it is time to focus on paying down our debt and moving more towards preparing for the future. What will it take? We are not 100% sure… We plan on spending 2019 attempting to “master” a solution on:
- Spending less money on unnecessary purchases
- Spending less money on Food
- Building up our “rainy day” fund
- Pay off any remaining debt
- And more….
We will be updating this page as our main source of information on our journey. If you wish to see an bi-weekly or even weekly update of our progress please visit our blog. We plan on keeping track of everything we did that week as well as lessons learned for next time.