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Budget: The Dirty Six-Letter Word

Budget: The Dirty Six-Letter Word

January 21, 2020

There is one six-letter word that strikes fear in the hearts of many and has caused countless arguments within couples: Budget.

I’m in the financial industry and I still sometimes dread completing this task in my own household. That’s why I’ve started thinking about it in a different way.

Realistically, I know it needs to be done because it’s the first step in gaining confidence and control over my finances. I also know that the reason it’s often difficult – especially when it involves more than one person – is because each person has their own thoughts and feelings about the topic of money. Maybe you’re a spender and your partner is a saver. Maybe you have separate accounts and you’re not really sure how you each spend your money. Maybe you’re in a new relationship and this is the first time you’ve talked about finances.

The bottom line is that each person brings their own history, beliefs, and insecurities to the discussion.

Change how you think about budgeting.

First of all, I think we need get to rid of the word “budget.” To me, that conjures up images of a couple sitting down at a dining room table with boxes of receipts, each person trying to justify where the money has gone (and one person probably in tears).

Instead, let’s come up with a Spending Plan.

A Spending Plan focuses on using your money as a tool for living the life you want, both now and in the future. It allows you to think of what you’d like to do, rather than focusing on what you have to cut back on. Yes, decisions will need to be made, but by concentrating on the positive things that money can do for you (rather than the negative things you have to give up), this might make the conversation easier.

Here are a few things to consider:

  • Be honest with yourself and each other.
  • Use this as an opportunity to help each other and ultimately yourself; where one person is struggling, the other person step in.
  • Sometimes this process brings couples closer together! Two minds are better than one.

Creating a Spending Plan.

There are many tools you can use for setting up a Spending Plan; whatever tool you decide to use – from an online service to a basic spreadsheet - these are the categories you need to include:

 1. Salary & Wages (duplicate this section for each income earner.)

  • Gross Salary
  • Add overtime, commissions, bonuses
  • Subtract out each tax withholding, retirement contributions, and any other benefits you have. (Keeping track of things such as taxes and employee benefits allows you to be in a position to adjust your withholdings, change your retirement contributions part way through the year, or be ready to make changes when your open-enrollment period comes around.)

 2. Savings Goals

 3. Expenses

  • Mortgage/Rent
  • Water
  • Utilities
  • Property Taxes

 4. Debt Payments

  • Credit cards
  • Student loan

  5. Food

  • Groceries
  • Eating out 

 6. Medical

 7. Personal


Keep in mind that any way you can automate this process usually increases your chances for success. For example: If you know you’re not someone who will manually move funds over every month in order to fund your financial goal(s), check to see if your bank has the option to automatically move money for you. You can also see if you can set up an automatic draft for your paycheck to fund two different accounts.

Keep going.

Understand that putting a new budget together takes time, but once you have it in place and personalized it can be so rewarding! And remember that there are so many tools and resources out there to help you – including working with a financial advisor. By creating a plan, you’re taking control of your present and your future.


Melissa Thompson is an Investment Advisor Representative holding a ChFC® designation in the Castle Rock, CO and Denver, CO areas who focuses on educating individuals and small businesses about the importance of protecting and growing their financial assets. “My preliminary meeting process is a chance for us to talk about where you are and where you’d like to go. You’ll have the opportunity to make sure that my services fit your unique needs before you commit to moving forward. I look forward to creating life-long relationships with my clients and taking the fear out of financial planning.” To schedule a consultation with Melissa, CLICK HERE. (1/14/2020)