Budget Schmudget
Living on one income is no fun at all (I apologize to those of you who are living on no income; I can only begin to imagine how whiny I sound!). Although Henry pays me daily with smiles and coos, we're still hemorrhaging money.
We'll it's not as bad as it sounds. We have money in savings that we can use to cover our expenses while I'm on maternity leave and work to start a public Montessori charter school, but we don't really want to spend that money, since we also want to build a house in a pocket neighborhood.
Hmm...I'm realizing that I need to do more thinking about what I'm doing right now, what I enjoy doing, and what I want to be doing to figure out how to generate more revenue in those areas.
In the meantime, Matt and I need to go back into budget mode. Back in 2008, we were able to plan a super-budget wedding and save five digits for a down payment on our house. It was stressful (like imagine us pulling up to the bank in Houston in our U-Haul truck from Denver 45 minutes before our closing meeting at the title company, depositing our wedding gift checks, and withdrawing just barely enough money to pay for our house). But we got it done.
Over the years, we've had many different versions of a budget. When we're making a lot of money (well, for two people who work in the non-profit sector!), we try to deposit a lot of money in our Roth IRA for retirement. We also set aside a lot of money for travel and then go on fun, fun vacations (like a sailing trip around the Greek Islands).
When we're pinching pennies, I keep track of every single purchase and make us pay for dinner out of our personal allowances when we've already spent all our grocery money for the month.
I feel like we need to get back into Pinching Pennies Mode.
Here's the plan:
For example, our preferred grocery store is Whole Foods, but if we're running out of money, then we need to make a different choice. Also, Matt is addicted to a new frozen yogurt store in our neighborhood (confession: I'm more than happy to tag along!), so we need to be more aware of how much we're spending there each month.
We could use something like Mint.com to track our spending more automatically and analyze it more deeply, but, at this point, I'm happy with the budget and then our concrete number that tells me what we can spend each month on all the major things we purchase: groceries, meals out, entertainment, and random things on Amazon.
I'm looking forward to getting back on track!
We'll it's not as bad as it sounds. We have money in savings that we can use to cover our expenses while I'm on maternity leave and work to start a public Montessori charter school, but we don't really want to spend that money, since we also want to build a house in a pocket neighborhood.
Hmm...I'm realizing that I need to do more thinking about what I'm doing right now, what I enjoy doing, and what I want to be doing to figure out how to generate more revenue in those areas.
In the meantime, Matt and I need to go back into budget mode. Back in 2008, we were able to plan a super-budget wedding and save five digits for a down payment on our house. It was stressful (like imagine us pulling up to the bank in Houston in our U-Haul truck from Denver 45 minutes before our closing meeting at the title company, depositing our wedding gift checks, and withdrawing just barely enough money to pay for our house). But we got it done.
Over the years, we've had many different versions of a budget. When we're making a lot of money (well, for two people who work in the non-profit sector!), we try to deposit a lot of money in our Roth IRA for retirement. We also set aside a lot of money for travel and then go on fun, fun vacations (like a sailing trip around the Greek Islands).
When we're pinching pennies, I keep track of every single purchase and make us pay for dinner out of our personal allowances when we've already spent all our grocery money for the month.
I feel like we need to get back into Pinching Pennies Mode.
Here's the plan:
- I read through every budget category and updated it by looking at our most recent payments. For example, our car insurance has gone up since the last time I did our budget, so I changed that number. Also, we gave up our Netflix account, so I changed that row to $0.
- I added some of the rows together to figure out our "spending money" for the month. Those rows include groceries, eating out, entertainment, and some miscellaneous expenses.
- I'm going to enter that number into an app on my iPhone called Spend Free (thankfully, that app didn't cost me anything!).
- Every time Matt and I eat out, buy groceries, order something off Amazon, etc., I'm going to subtract the cost from our budget for the month. That way, we can make more conscious choices about how we're spending our money.
For example, our preferred grocery store is Whole Foods, but if we're running out of money, then we need to make a different choice. Also, Matt is addicted to a new frozen yogurt store in our neighborhood (confession: I'm more than happy to tag along!), so we need to be more aware of how much we're spending there each month.
We could use something like Mint.com to track our spending more automatically and analyze it more deeply, but, at this point, I'm happy with the budget and then our concrete number that tells me what we can spend each month on all the major things we purchase: groceries, meals out, entertainment, and random things on Amazon.
I'm looking forward to getting back on track!
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5 comments:
I disagree with Annalisa.
I think strict budgeting when you're saving enough and financially comfortable is a hassle we'd rather avoid. I'd compare it to counting calories when you haven't gained weight. If I'm not gaining weight then I refuse to count calories because I think it takes the fun out of eating. To us, budgeting to the last cent every month takes the fun out of living and it's something we're only willing to do when absolutely necessary. It's not that we don't watch finances the rest of the time, but we're just not as careful because we don't have to be (because we're still meeting our saving goals).
The times I've tracked finances (or counted calories) I've found that these things vary slightly daily but average out every week and month. In other words, I don't need to aggressively budget to know that I've spent x+/- 5% on groceries this month. The numbers don't change that much for us from month to month...
Oo, I'll check out that app! I would like to keep a closer track of my "entertainment" spending. I tried just getting out cash from each paycheck and only using cash for coffee, eating out, etc. But then I wouldn't make it to an ATM, etc and the system never stayed in place. Plus I do find it helpful to have a full record of expenses in my online statement. But it would be great to have a mini budget in my phone to keep track. Even though we have a very detailed budget it has felt like lately so many things have been coming up I’ve also had that “hemorrhaging money” feeling. Ugh!
I have used a bunch of money programs, including some paid. My favorite is Mint, and they have a pretty sweet iphone app too.
I do worry about the privacy issues of software like this, but Mint has been around a long time and haven't had any trouble. Now, they belong to Intuit. I would be careful with what private info you give to random, free apps.
There's other stuff out there like Mint, it's certainly not the only game in town. There are some really neat ways to watch your budget.
I just recently read,Dave Ramsey's "Total Money Makeover" and my wife and I were completing inspired--- to get out of debt, NOW. :D It teaches you 6 steps to not only get out of debt, but save for a 3-6 month emergency fund, your kids college fund and retirement. Seems like you are doing some of that now, and will be ahead of the game with your current budget... The book is mainly for people who are close to bankruptcy, or can't stop spending, but the advice in his book is VERY useful, and an easy read. We read it on vacation and couldn't wait to get home and get to work on our budget!
My biggest challenge is tracking our family's spending when my husband just isn't into money tracking. For those of you who don't know what I mean, or might argue too quickly that he doesn't "care", it isn't that. He's just never needed to count pennies or track individual small expenses and really can't see the value or find the motivation. He cares, but he tends to think "we're on track", so it's just not worth it.
I'm a personal finance hobbyist/enthusiast and really find tracking calming and reassuring. Anyway - has anyone had success with a compromise? Or a system that doesn't depend on both parties tracking all of their spending daily or weekly?
Thanks!
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