Brett Schock knows how much money he has every single day.
The 32-year-old married father of one in Fort Worth, Texas, doesn’t look at his budget like most people do.
Rather than dividing up a monthly income, he looks at how much money he has every single day.
“I started budgeting right out of college,” he remembers. “I bought a house within four months of graduation, and I was fairly quickly overwhelmed with the amount of bills coming in. I didn’t have confidence that I could keep track of it unless I created a system.”
Since then, Schock has made his budget more and more detailed, to the point where he calculated two separate budgets: one detailing how much his family earns and how they spend the money, and one detailing how much money they would need to be perfectly happy with their income, and how they would spend it in an ideal world.
In the “happy calculation,” Schock explains, “Our student loans will be paid off, our son will likely be in public schools, some things will get a bit more expensive, and we hope to move from Fort Worth to Seattle, where we’ve found that for the most part, homes are much more expensive for what we would want in the neighbourhoods we’d want.”
Brett is a civil engineer and his wife, Becky, is a teacher. Their son is four years old.
To cover the family’s expenses and desires comfortably, the Schocks need to earn at least $US125,000 a year before taxes.
However, they actually earn $US142,000 a year before taxes, which brings them very close to the $US143,000 a year they estimate needing to live a happy, balanced life.
Because a day-by-day budget is hard to illustrate, Schock provided his annual budget reflecting the family’s spending for one full year. The green lines show how they actually spend in a year, and the purple show how they’d spend in a perfect situation.
Not shown in the above graphic are their retirement savings (currently $US6,033, ideally $US6,831) and income taxes (currently $US17,893, ideally $US21,584). Schock points out that right now, they’re paying over $US13,000 a year to send their son to a private preschool, but they intend for him to go to public school in the future.
The Schocks originally had $US36,000 of student loans combined.
In the “Costs over Budget” line, the word “budget” refers not to the entire spending plan pictured, but rather to what Schock calls his budget-within-a-budget. It’s what other people might name “miscellaneous expenses,” including anything that doesn’t fall in one of the other categories.
“The ‘happy budget’ is more of a self-realisation thing, because I’ve seen too many people who work themselves really hard for that little bit of extra money, and I don’t know if it’s worth it,” Brett explains. “Right now things are pretty good — we feel like we’ve kind of made it.”
“We only have a minimum amount of expenses directly hit our checking account,” Schock continues. “For ease of having single payments whose timing is predictable, getting those travel points, and peace of mind of being able to delay payments if something truly unexpected happens, almost everything is on one of our three credit cards.”
“We’ve been budgeting and saving with goals in mind for almost 10 years now as a couple, and we’ve reached the point of not having a goal; it is an odd feeling,” Schock muses. “I think the next things will be more ‘luxury’ goals; increasing our son’s college fund, setting aside some money to ‘play’ in the stock market, increasing the amount we set aside to donate to charity each year, things like that. And, we’ll do more for ourselves too; more travel, more home projects (although we already do a fair amount of that).”
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