Home » How My Wife and I Figured Out How To Live On a Budget

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Then we found a system that actually worked for us.  We found a piece of software that "made sense" to us and helped us get our financial life in order.  We stopped fighting about money because we knew exactly what money was being used for what and we were able to take our existing income and stretch it even further because we were proactively dedicating money for specific purposes.

You don't even need the software to do this because it's so simple, it actually makes sense.  We actually wound up using a piece of software to do it because we found one that made sense for us but you can do it manually if you so choose.  Here's the way it works.  Just take every paycheck you bring home and divide the money into buckets (some people use envelopes for a physical representation -- whatever works for you) and when it's time to spend the money, take the money from the bucket and spend it.  When the bucket is empty (or the envelope) you're done -- until the next paycheck.  Next month, if you didn't spend all the money in a bucket, you don't have to put as much into it and that leaves more money to be placed elsewhere.  

The real trick to this system is to only "bucket" money you have to spend between now and the next paycheck.  Leftover money is put into a buffer that can be used as an emergency fund, a snowball fund to pay off a larger bill, or even to build up excess money so that this month's paycheck is being used to pay next month's bills.  That's where my wife and I are at now and we're loving it.

So it's entirely possible to live with a budget as long as you're proactive about it.  Don't just let the software put you on auto-pilot.  Take action and you will be able to regain control of your financial life.

If anyone is interested, the software we used is called YouNeedABudget and you can click on the link to find out more about the software.  Again, it's not necessary to use the software -- you can totally do it by hand but it did make our lives a whole lot easier.