One of the topics that I always find interesting is to read how other people manage their money. So I thought it would be nice to share today how we manage ours!
In the personal finance community there are a lot of people who use a budget to manage their money. On the other hand there seem to be a lot of people in the FIRE community that don’t use a budget. We’ve been using a zero-based budget for years and love it! At first, we used an Excel spreadsheet to build our budget, but we’ve been using YNAB (You Need A Budget)* since November 2013 and haven’t looked back since!
I like how budgeting helped me not feeling guilty about every euro that is spent and the fact that it helps us reach our financial goals. I don’t want to turn this into a YNAB commercial, but it has really helped us in being on top of our money. No stress, budgeting can be easily done on the phone. I also love the ability to set savings goals and it updates automatically if you save more or less in a certain month. We used to do this on our own when we used Excel and had a number of different savings accounts to keep track of it all, but this is much simpler.
Our budget is combined, but we still have three bank accounts. Each one of us has a personal bank account that we do most of our personal spending out of (what a surprise…). Then we have a joint account that we use for most other things. I like having most of our finances combined, but I like it that it’s not immediately obvious to J. if I had a weak moment at the train station and bought a cookie on the way home or if we want to buy a gift for each other without the other one knowing. This system works really well for us.
We have one joint investment account at Meesman where we have automated our investments and €100 gets transferred automatically to that account. J. also has a blocked savings account (banksparen) for retirement, but we have stopped contributing to that for now. I also have my own investment account where I transfer 5% of my income to each month for retirement. I want to keep this account separate as an experiment to see how this account will build up over time without putting a ton of money into it at one.
We both get paid once a month at the end of the month (around the 19th and the 24th). Since I’m the money nerd, I usually make a first draft of the budget once that money comes in for the month ahead. Then on the last day of the month, we sit down together to finalize the budget for that upcoming month. We then also calculate how much extra can be sent to the mortgage since that has been our main focus this year. Usually, this takes 30 minutes to an hour max.
About a year ago I had a bit of budgeting fatigue and we quit the budget for one month, but I didn’t even last a week and I begged J. if we could please go back to budgeting. We aren’t too strict with ourselves if something unexpected comes up and we need to spend more on a certain category we have the room in our budget to make that work.
Please share, how do you manage your money? Do you use a budget or not?
* If you use this link to sign up for YNAB we both get a month for free!