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How to Budget to Buy a House

My Family Is on a Budget, and This Is How We (Happily) Make It Work

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In many ways, our family is abundant — in health, in love, and in happiness. There is one area, however, that I wouldn't mind a little extra loving, and that is the almighty bank account. While my husband and I are both hardworking, motivated, and driven individuals, student loan debt, poor financial decisions in our younger years, and expanding our family has postponed our biggest feat yet: buying our first home.

While we've had the privilege of good educations and well-earning jobs, it always seems like we have just enough to get by or not enough to keep up with our dreams. We've also been hit with a few waves of bad luck like job losses and unexpected moves. In the 11 years we've been together, we've moved 10 times (thank you, New York City rent increases). However, we've also been blessed with strokes of good luck, like job promotions and generous gifts. Yet, every time we seem to save some money, it quickly disappears.

Once our daughter was born, we knew something had to change. We read finance books, watched seminars, talked to peers and mentors, and tried to learn from our and others' mistakes. But, nothing was as helpful in our family's financial planning as bringing it back to the trusty paper and pencil (or in our case, a computer) and creating a strict budget. Over recent years, my husband and I have made intentional financial decisions that have helped smooth over the rough patches and pave the way to our family's goals. Here's what we've learned:

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1. Be Co-CFOs

It's funny how many people assume that my husband makes all of the financial decisions in our home. I get it — he works in financial technology — but he will be the first to tell you that it was my conservative approach to saving our money (even if it was just a few extra dollars per paycheck) and attention to detail that helped right many wrongs. On the flip side, it was was my husband's expertise in spreadsheets that seamlessly organized our financial planning, forecasting, and balancing our budget. While we both contribute and commit to our family's financial planning individually, working as a team has paid much greater dividends.

2. Be Transparent

Earlier in our relationship, we had kept our finances separate from one another. And while this may work for some couples, we've benefited from being open and honest about every penny we spend (and save). So much so that buying surprise gifts for one another has become super hard since we both have access to every bank account! However, we found that the more information we both have to work with, the easier it is to know where we can cut back and where we can save. Knowledge is power (and more money in the bank account).

3. Be on the Same Page

At least once a week (it's more like three times a week), my husband and I balance our bank accounts and corresponding budgeting spreadsheets (automated bills, automated savings, and spending). Money talks used to be a point of contention between us before we were totally transparent about our money; however, they're now opportunities for us to bond. We love seeing if we're on track for our weekly or monthly goals, and if we're not, we love to pretend that we're competing on The Amazing Race and need to end the week (or month) in the green to win the imaginary million-dollar prize.

We also spend every Sunday talking about our short-term and long-term goals. Staying on top of our goals each week allows us to see our financial progress and make any adjustments along the way, while making sure we're honoring our individual and collective wish list.

4. Be Basic

Cash is king, they say. I don't know who they are, but chances are they're sitting on a big pile of change. We get paid bi-monthly. Therefore, each paycheck, after our automated allotments have been direct deposited into our bills and savings accounts, we withdraw our remaining "spending" money and divide it into two (one for each week in between paychecks). This helps the inevitable pitfall of spending all of your money at once. I wish I could say that we stop our budgeting there, but that would be too basic.

We then, and stay with me, allocate our weekly spending money by weekly expense (travel, groceries, toiletries, personal allowances) and activities (eating out, babysitting, miscellaneous) and assign each expense a reasonable allowance. Lastly, once our allowances are determined, we place them in their own color-coded and labeled envelope and go about our days carefree. Silly as that might seem, we're the ones laughing all the way to the bank. Paying in cash and using the (basic) envelope system helps to avoid overspending and generally leaves us under-spending (which goes straight to our house fund).

Listen, raising a family is expensive. Student loans feel criminal. And saving for something like a house can feel near impossible. But it is possible. Not only is it possible, but for every penny we count, spreadsheet we balance, inflow we track, and outflow we project, we have more than we need to do all that we want, because when you live within your means, you always have enough. The house is just a bonus!

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