When I was younger, a bachelorette out of college with a new job and a steady stream of disposable income, I never thought to budget my money. My bank account told me how much I had at any given time, so as long as I didn't overdraw I was in good shape. It meant going into debt for a few emergencies, but that never lasted too long. I could always cut back until I paid off the debt. 

That all changed once I met my husband and we started to plan a family. I got lucky, in that I married a man with plenty of financial sense. He had saved plenty of money in his post-college days, enough to make a down payment on a house. But we needed more savings, still. After all, children are not cheap. In fact, it seems that having children means money flowing out of your bank account every day.

We might not have the perfect system for managing our finances, it has worked exceedling well for us -- well enough that, as I described in a previous post, I was able to start my own side business, which eventually turned into my profession.

Combine all accounts

Some couples choose to have separate checking accounts, and sometimes even savings accounts. From Day 1 my husband and I decided against this. To keep matters simple, we were going to work with a single checking account, a single short-term savings account, and have both our names on both credit card accounts. It just made managing finances easier if we didn't have tho shift money among individual accounts.

We had, however, heard horror stories of frozen joint accounts after the death of a spouse. Preparing for the worst, we did create separate emergency accounts we could access for cashflow in such a case. Other than that, though, we have both our names on all of our accounts, and open as few accounts as possible. It makes money management infinely easier.

Track every dollar spent

Like most people, our most common mode of spending is to swipe a card, wither credit or debit. (We try to use our American Express card for every possible purchase, since we earn rewards on it.) This might be convenient, but it also creates a disconnect between you and your money. In the past people either had to part with physical cash, or otherwise write a check and balance their checkbook (since there was no website to check your balance). People felt it when they spent money.

To combat this disconnect, we took the advice from the Art of Manliness blog and kept a pocket journal to record our expenses. Only we decided to use modern technology to keep in sync. Both my husband and I have Android smartphones, so we created a shared Google Docs spreadsheet where we wrote down all of our expenses, broken into categories. When I purchased the groceries for the week, I entered it into the spreadsheet at the register. When he took the kids out for ice cream, he did the same. We now not only feel more connected to our money, but better understand how we spend it. 

Get a monthly overview

We try to make monthly budgets. It's a nice balance between not having much of a budget at all, and having too strict a budget. We do try to adhere to our budget strictly, but also recognize it is impossible to stick to a budget to the dollar.  Plus, we needed to reconcile our own records with our bank accounts. The solution came in the form of another smartphone app, and this is one we simply cannot live without.

The Mint.com app lets users automatically manage personal finances by hooking up their bank and credit card accounts. The app then fetches the information and displays it for you. It not only helps us reconcile our balances, but shows us our net worth. It even gives us investment advice that, while usually not too helpful, does sometimes give us ideas for how to invest our money. But overall, Mint has become an invaluable tool for letting us know exactly how much money we have in each account, and overall. 

Paper and pen budget

While we use our smartphones for recording expenses and verifying our accounts, we actually go old school when actually creating our monthly budget. We actually got this from Tim Russert's memoir, Big Russ and Me, wherein Tim describes his father writing the family budget on a yellow legal pad. My husband and I both felt nostalgic after reading that and decided to do the same ourselves.

While there's no grand reason for doing this, it does allow for some leeway we might not take if we did our budget electronically. Our legal pad budgets are full of crossed-out items, circles, stars, and other little decorations that add an effect we can't get on the computer. It actually adds priority to certain items in a more effective way than simply clicking a button that denotes priority. Again, it's what works for us. 

This is not a universal guide to creating a family budget. It is merely the way we have come to create ours. I share it, because it has worked so fantastically well that perhaps others can take bits and pieces from it to help their own budgeting situations.