by Adam Dawson
Emily’s right. We must start budgeting again. This is probably the financial issue that holds us back more than anything else. We haven’t had a budget that we actually followed for probably 24 months.
When we started out, we took the online Dave Ramsey course and tried the envelope method. For a few months it worked out well. I would faithfully trot to the bank once or twice a month and ask the teller to give me so many tens, twenties, fives, etc. so I could fill the envelopes accurately. But once the novelty wore off, our disagreements about how to spend our income really came to light. Budget meetings started to deteriorate into arguments and eventually we stopped budgeting at all to avoid having the fights. Just writing this down brings back all those memories of difficult moments in our relationship. On the months where we had our envelope system going well, it seems like something would come up to throw us off track (something as simple as not wanting to cook on Friday night even though we’d already spent our restaurant budget) that would cause us to drop the whole plan and pull out the debit card.
On the plus side, we learned that using cash really did help us stick to a plan. The few times we did, we felt very empowered and in control at the end of the month. I believe that we know and understand one another better now, and so I’m hoping it will be easier to agree on what we need to plan for. And since the blogosphere has clearly spoken that Emily should get a reasonable monthly allowance for hair, hopefully this next round of budgeting will be easier.
We’ve noticed that many of you have already chimed in with your tips and budgeting/spending plan advice, so THANK YOU!! This is exactly what we need. As I start to plan the next month’s spending, I have some questions for how some of you do it.
- Do you use a cash method like the envelopes or something similar?
- How many categories do you have? In the past I found it easier to stick to about 10 envelopes or fewer (which doesn’t count bills that are paid directly from the bank account). Do you prefer big, general categories (ie “personal care”) or do you have many, specific smaller categories?
- How do you handle spending money/blow money?
- It’s very personal, but if anybody cares to share how much you plan for certain categories (and your household size) it would be helpful for us!
- I’m the planner and Emily is the free spirit. How do you balance competing spending priorities in marriage?
For me, my biggest personal obstacle is eating out for convenience. I have a very difficult time getting out of bed early enough to eat breakfast at home and prepare a packed lunch, so I end up eating out WAAAYYYY too much during the work day. If we can corral this pony, we’d solve a huge portion of our budget failures in one fell swoop. Not to mention improving our health. Do you have any tips for reducing daytime food expenses?
Wish us luck!
On the food issue, check out “100 Days of Real Food” on Facebook. You will find very helpful info on healthy eating, links to meal planning, etc. She includes lots of pictures of school lunches which you can adjust to feed an adult. ‘Just the variety alone is inviting. I think you will find this woman and her husband provide info well worth reading.
OK! we will check this out. thanks for the tip.
Hi Guys!
Currently my hubby and I find that using a prepaid visa card works for us. We have our monthly bills that are deducted from our account and the remaining amount goes into our savings. From here we determine what we need/budget for the week and then load that to a prepaid card. In addition, as crazy as this sounds, I donate plasma 2x week which gives me an additional $50 ($200 month) a week to play with. I use it for lunches or gas but the great thing about it is can check my balance and know $$ anytime. I find that I don’t use my own debit card which allows me to breath. We are currently in Chapter 13, very long story, so every bit of $$ we get is needed. For lunches I usually try to buy soups that are 10/$10 or if I splurge on Subway salads, I eat half one day and half the next. I also am an extreme couponer which allows us to have basically a ZERO $$ health and beauty budget. Just my thoughts! Keep up the climb, the view is better from the top!!
thanks for the well wishes! i think we’d spend a prepaid visa down by the end of the first week!
i’ve thought about donating plasma, does it make you tired?
Hi Adam,
Regarding the spending of the prepaid visa-yes learned that lesson the hard way. For us, once we were accustomed to it, now its not a problem. It makes me really think where I will spend that money and it makes me plan for the week.
Donating plasma for me, I don’t get tired afterward. Sometimes there is a line and I have to wait for a bit, but I bring my beloved Kindle full of free or $.99 books and read away. The benefit–tax free dollars and your saving lives. Connie
I always pack my lunch (and breakfast) for the next day right after dinner. I am way too slow and lazy in the morning to do it then. I usually eat my breakfast at the office. Pre-planning discourages me from buying food at work where it is really expensive. Good luck!
this is good – do it right after dinner. i think i’ll try this.
We cook extra dinner so there is always lunchable leftovers. Frying a few eggs with homemade whole-wheat toast isn’t that time consuming. Although I have had to make an egg sandwich for running out the door with. Breakfast definitely happens better as a cooperative venture. We make a point to get up at the same time, partly to socialize but mostly so there is a decent breakfast made by whomever has more time to do it.
Envelopes are great for the “cash” categories. All of my bills are automated and come out directly from the checking account. The person who pays generally for the envelope category should have control over it. So if wife buys groceries, she gets that one. If husband does the shopping, he gets it.
Automate the regular bills as much as possible.
Each person gets an amount for personal spending.
Yes – the autopay is a godsend. No more late charges!
good tip on who gets to control the envelope – i think we could use this.
Budgeting is a personal affair to be sure, but it’s understandable you would want to see another’s spending plan so you can get an idea how they allocate funds. So, here’s our plan.
Note: Household size is 3* persons–I use an asterisk because our daughter (a sophomore)is attending UT-Austin and lives there 10 months out of the year.
Net pay: $5750 (Less taxes, 19% 401K deduction (husband is 50 so we can save $23,000/yr), medical, dental, disability, vision, life insurance, charitable deduction)
Real Estate taxes: $335
Food/beer/wine/toiletries: $500
Utilities: $500
Gas/toll tag (we work from home): $100
Cash: $100
Clothes: $100
Restaurants: $100
Car insurance (one teenage driver): $238
Hair care (both spouses): $100
Roth IRA: $1000
College expenses (dorm/books): $1057
(Note: college tuition is already paid for with Texas Tomorrow fund we purchased when daughter was 3)
Car maintenance/repairs: $120
Vacations: $400
Home maintenance/repairs:$100
Savings: $1000
There is no house payment, so that money goes into savings.
We use a zero based budget system whereby if a category has money left over at the end of the month, then that money is placed into savings.
We do not use envelopes, but I do enter all expenses onto T-accounts per category and keep track of all spending except for cash.
Hope this helps. 🙂
very exhaustive – you are saving a lot of money!
thank you for sharing your amounts. it looks like we could pick up some of these amounts
Do you save for big vacations or take a series of small vacations? Just curious!
Emily- We save for both. We plan where we want to go about a year in advance.
You are doing really well. Based on 18 years of our quicken data our house costs us $400 a month to maintain (crappy post-WWII construction, NEVER buy something built during a housing boom, any housing boom) and the car in capital cost is $300 (maintenance on old car or paying ahead on a new car) per month.
What are you driving?
I find that the more categories I had, the less likely I was to follow it, because things come up some months and are never seen again. Besides set bills like mortgage, debt, and utilities, I only had four categories: groceries, gas, entertainment, and miscellaneous. I just wasn’t into budgeting for haircuts and oil changes since those don’t occur each month. Not to mention birthday and wedding gifts that never seem to end. The miscellaneous category covers all those items plus home improvement items. Ultimately, I didn’t care “what” the money was going toward as long as it wasn’t going over the amount we had to spend. Once we reconciled that an oil change meant we had $40 less that month (or whatever amount), we really gained some ground by not letting those one-off expenses wreck our budget.
About the food thing, I am not a morning person, but I feel like a fool if I spend money on something due to laziness or lack of planning. Bringing my emotions into it and tying meal planning to how successful I feel really helped me.
thank you for sharing this – i think this is more workable for us, just a few categories.
I usually make extra food for dinner and pack the left overs for lunch the next day as well as prep anything for breakfast. I usually only have leftovers enough for one meal so I don’t get “sick” of the food even if I loved it when I first made it. Also, it prevents cleaning out my fridge and finding old food shoved in to the back. I pack everything up the night before and it’s easy to grab and go in the morning.
Well, I live alone and I’m pretty bad about budgeting. I hate tracking what I spend – I’ve tried, and it always fails. But, I do “budget” in the sense that I know what my major expenses are: mortgage, property tax, condo fee, insurance – and I plan for those. I also, and before I say this I want to point out that my only debt is my mortgage, put as much as I can on my Discover card or American Airlines card. It’s the only shot I have at tracking my expenses as writing them down as I spend it doesn’t work for me.
The rest of the process is sort of zen intution…
So, this is how I manage my finances:
Retirement – autopilot. 401(k) contribution is maxed out.
Mortgage – I refinanced this year into a 30 year @ 3.something% 😀 Super happy about that! I plan on paying it off within 20 years, hopefully sooner. I assume that each month I will make the extra payment needed for the 20 year payoff. I have an Excel spreadsheet I downloaded from mtgprofessor.com where I enter how much extra principal I paid each month. It then recalculates the remaining balance and the final payoff date. I modified it to graph the original amortization and the new amortization. If you’d like a copy let me know and I’ll send it to you 🙂
Condo fees & property tax: I pay these quarterly, but I set aside a monthly amount into a savings account. This way I know I’ll have enough when the bill is due, it smooths out the pain, and if the interest rates on savings ever rise again I’ll make a small amount of money. (Btw, I don’t escrow the taxes or insurance.)
Homeowners & car insurance: I pay these annually, but I set aside a monthly amount into a savings account. I started doing this last year because I got tired of having to remember that when my car insurance is due I needed to cut back on other expenses.
Car: I set aside $250/month into a savings account for a new car, to be purchased in 10-15 years. I paid cash for my current car, which I bought new in 2012. I know you can save more money by buying used, but I like to know that I am the only owner, and I’m always scared I’ll get suckered with a lemon. I figure buying a modest car and avoiding car loans is a good compromise.
Church pledge: Another line item on my monthly expenses.
Everything else: Cable and phone get autobilled to my credit card, and I pay gas & electric online. And each month I pay off my credit cards, which all provide some sort of reward – Discover for cash back, which either gets credited onto the statement or I use it to buy something from Amazon; American Airlines for miles, and GM Card for the next car.
I have another Excel spreadsheet that I use to work out how much I’m paying for the current month. Each regular expense has a row and I enter in how much I owe for the month. Each savings account and my checking account have a row for me to enter the balance. And the larger expense that I set aside a monthly amount for also have line items under each savings acount they’re in.
I subtract all the expenses from the available cash. I keep a small cushion in my account to cover anything I may have forgotten. Any surplus is then divvied up into pre-paying more on the mortgage, or funneling into a different savings fund, e.g., emergency fund, large purchases, fun, and education (for work-related or non work-related courses I may take).
Some months I don’t have a good surplus, and when that happens I analyze why. Sometimes it’s an unexpected expense, other times it’s because I ate out more often. I then note that I need to ease up on the spending for the next month. And, if it’s really bad, then I don’t pay extra on the mortgage at all. But, other months I may have a really nice surplus in which case I’m able to save quite a bit and may a nice, fat extra payment on the mortgage. Overall, it tends to even out throughout the year.
I’m getting close to my goal of an emergency fund to cover a year’s worth of expenses. (Actually, it’s really a year’s worth of take home pay. That was easier to figure out than expenses, and since I spend less than I make it should work.) After I reach that goal I’ll have wiggle room to start investing or paying down the mortgage faster.
Oh, and in addition to my Excel spreadsheets I use the program Moneydance keep track of my checking account, savings accounts, and credit cards. It also provides reports on the expense breakdown. I learned the hard way before I had a computer that if I handwrite the checks in the check register I’m prone to misreading 9’s as 4’s and transposing numbers. Using a computer cuts down on errors for me 🙂
Still budget, not as much as when we were younger. But once a year we sit down and decide on our financial priorities. And we always account for every cent spent. Even though we don’t have to.
When we were young, every penny was budgeted for and we had to spend every penny we had. We had short, medium and long-term spending goals and a plan to achieve them.
With a plan like that (started in my mid-20s) we now don’t have to budget at all and have retired early.
We set our spending style as extremely modest. With the big house comes big expenses. With the fancy car comes higher insurance. We always collected memories instead of stuff and never believed our status was expressed by our possessions, we believed our status was expressed by our deeds (both personally and in business.)
We still keep our spending modest (I try hard not to buy anything new, we make do as much as possible and we don’t ‘keep up with the Jones’.) We get any TV we watch OTA or via Netflix. We don’t get a newspaper. We have prepaid cell phones (which we buy outright.) They cost us about $20 month. Now they are smart phones but we don’t have a data plan for them since we don’t need it. We plan ahead or use free wifi which is becoming common all over the place.
We still pool all money earned and each draw an equal allowance to be spent as we wish. There is a small clothing budget. If I want more, it comes from my allowance. My dh uses his for movies and used to use it for hair cuts. BTW: it was my husband who had the expensive taste in stylists, starting with a new immigrant barber 30+ years ago, who evolved into one of our city’s top stylists. I now go to him too – for cuts only. I don’t dye my hair because I hate being a slave to anything. Now that we are rich, we’ve moved haircuts from allowances over to a budget line item and we go at the same time, as a date, and have lunch afterwards at our favourite chip-wagon, spending $8 (for the two of us.)
The big keys to success were:
1. good earning potential (my dh, not me, I stayed home with the kids and then worked for him.)
2. never spent up to our income. We know the difference between need and want and kept to our needs only until we had way more money than we knew what to do with.
3. avoided debt. Paid cash for everything except our first cars and the house. Paid everything off as fast as possible.
4. communal budget. There was no My Money, Your Money, therefore no arguing over who pays for what. Aside from our allowances (currently $250 per month) all money is pooled (I made money doing day care and now make money as a part-time preacher) and all budgeting was done jointly and stuck to.
5. Cash spending is the way to go. We learned that lesson during a 4 month stay in Britain. It was before internet so we couldn’t do online bill payments so couldn’t use our credit cards there. Had to pay cash for everything because we weren’t there long enough to get local credit cards and this was before debit cards. We had a per diem but letting that cash out of my hands was hard and we ended up living under our means for the whole time (not to mention my dh’s salary was waiting in the bank when we got back because we hadn’t touched it.)
After that experience, whenever we started to get close to budget limits, I’d move back to cash-only. And always cash only for the month of January to start the new year off right.
6. Working together. For us, the family unit was what was important. My dh couldn’t be a success in his field if he couldn’t travel so my job was to handle all the home-front things, kids and household. I earned a bit extra when I could. He’d help out with things around the house when he could. We always worked together towards the goals we set, mostly on building up memories, not possessions.
My life is completely ‘old fashioned’ and a feminist’s nightmare. But I went from running an organization with $40K budget in 1984 to running a multi-million dollar organization while traveling the world, volunteering actively in my community and taking on a second career after my kids grew up. My investment in my family paid off big time because my husband was making the same investment alongside me.
That’s the key. Work together. If you aren’t working together, you are not only fighting against the budget, you are fighting against each other. And when you are in tension and unhappy, it is far too easy to ‘treat’ yourself to something because you ‘deserve’ it.
If your husband respects you and values you as a full partner, then I don’t think your life is a feminist’s nightmare. Isn’t the real point of feminism about respecting each other regardless of gender?
You’re very lucky, Kate. You have always done work you love, your partner has appreciated and given equal value to your work even when it didn’t involve a paycheck, you have been free to choose what work you will do and when, and you share equally in the rewards of your joint labors. I don’t know any feminists who would complain about that!
I’ve also always thought I’m a feminist’s nightmare and I’ve spent the better part of 15 years feeling like I’ve had to defend my choices. My husband and I made a joint decision that I would stay home, raise our son, take care of the finances and the household stuff (although he cooks every single night because it’s his passion) so that he could focus on a very stressful and mentally draining career and not have to worry about the rest. He was able to advance quickly in his career field and now makes more than most dual-income couples and he credits me with a large part of his success. Many times over the years, out of guilt due to pressure from friends, hubby’s coworkers, etc, I’ve suggested I go back to work. He begs me not to every single time. I started my own online business this year that fits everyone’s needs. I still get to stay home, but I also have the self-satisfaction of making an income and feeling I’m building something that’s all mine and will become what I make of it. Win-win.
In theory, feminists should value all women who follow their dreams. In reality, I took a lot of flack from those who felt I was copping out and riding on my husbands coat tails. I often wondered if it was because I made them look bad. Funny enough, I’m really popular with the men and in social groups they chat a lot with me because I listen and understand their woes.
More upsetting were the female students at my dd’s university who gave her a hard time for ‘taking up’ a spot in the pure math program when she only intended to be a wife and mother as a long-term goal. They felt she was wasting a space. By fourth year she was engaged and actually asked me about dropping out. I pointed out that she was marrying a PhD candidate and her life would like involve a lot of socializing with professors so finishing her undergrad would probably be wise.
That her experience was in 2006-7 was chilling to me.
I’ve never missed having a degree (although had I wanted to be an ordained minister I would have had to add 3 years to my program but that’s the only time in my life the lack of degree was even a theoretical obstacle.) No degree does not mean uneducated and everyone I meet simply assumes I have a degree and if it comes up in conversation that I don’t, they are very surprised.
Some might think that my dh had it super easy because he had a ‘little woman’ at home, tending the home fires. In actual fact, there was a tremendous amount of pressure on him because he was the sole provider for the family and if anything happened to him, we’d be in dire straights since my earning potential was so low (having been out of the workforce for so long and with no higher education.)
Whatever choices couples make, they have to make the choices together and work together to achieve their goals.
I wonder if having an ‘escape’ plan should things go badly makes it easier to implement the escape plan than work through the tough times. I write this as a woman who took two tries to find her match for life. The first time, I kept my maiden name and worked outside the home, always able to take care of myself in case anything went wrong. It took less than 2 years for me to implement my escape plan.
I met a woman who was in a PhD program at Harvard who said that women her program were husband shopping!?!?!?! Quite a different experience than your daughter’s….
As for an escape plan – that’s a very valid point. If I had a child I would tell them that while they may not need a college degree having one gives them more options. And if you’re going to be the stay at home parent it’s always a good idea to have a backup plan. Even if you never divorce or are widowed, the working spouse could always get laid off.
We fall within recommended percentages for expenses (8% food, 10% transportation, etc.) Easy guidelines to follow, and a good way to spot trouble areas is if you are way out of whack on a category.
How we do it- take our net income, and set aside the fixed expenses and retirement/long term savings first. Then we set aside the one-time expenses specific to that month (reordering a yearly supply of contacts, for example). Then we set aside the mid term multi-month savings needs (trip planned for October, for example). Then we review whether any new multi-month savings needs have cropped up, and if so we begin allocations for those. Then we fill out our monthly variable categories.
For us, the cash system never seemed to work. So we have gone to the opposite- debit card transactions only and no cash (even the .99 cent purchases). We have our budget set up on mint.com, which makes it very easy to track expenditures.
We have budget categories and set amounts at the beginning of each month, but we are fluid on the non-fixed expenses categories. For example, if we are overspending on entertainment but underspending on gifts, we just raise/lower allocated amounts for those categories. I understand the idea behind not sharing money between envelopes, but for me, with the variable categories I don’t care as much about what we spend money on, I just care about how much we are spending.
We don’t do personal blow money- it’s all budgeted to a category initially. But those are flexible, as long as the bottom line doesn’t move.
i’m glad you brought up the recommended percentages. i went out and did a quick pass and I think they will be a good guide.
Try not to stress too much about the budget. Know that it’s evolving so start somewhere and know that you can refine it every month as you go. It doesn’t need to be perfect the first time:)
Keep the categories simple and do what works for you. If you don’t like the envelope system, figure out what works for you. I suggest keeping the categories simple in the beginning.
I am not a morning person either. Figure out some simple breakfasts you can have and for lunches, an easy way is to eat the leftovers from dinner. Pack them up after dinner and they are ready for the morning. When I worked outside the home, I used to make these oat bran muffins and freeze them in single serve bags. On days when I didn’t have time, I made my “30 second lunch” by grabbing a muffin, a piece of fruit and an iced tea. Now I make my own iced tea but that is a different story.
On those nights when you want to order a pizza or a restaurant meal, try picking up a frozen pizza at the grocery store-that will be a lot less than ordering in.
Some overall budget tips:
-Pay your bills first; never spend any money before paying your bills.
-Don’t spend any money that you can’t pay for with cash or your debit card.
-Save some, give some away and keep a little for yourself.
-Learn to cook and cook from scratch. You’ll save a ton of money on processed foods, you’ll be healthier and you’ll have better tasting food.
-Figure out Christmas and birthday budgets and stick to it. Spend what you can afford which isn’t always easy.
I also read a book last year that had some good tips on budgeting: Cheapest Family in America or something like that. The also referenced a budget resource called, Crown Financial Ministries website at crown.org or you can call 1-800-722-1976 to get a volunteer. They have volunteers in every state that can come out and meet with you and give you budget tips on cutting costs, etc. You might want to try them. I am not affiliated with them in any way nor have I used them-just saw the information in the book:)
And finally, stay focused on your goal. When I have a goal of any kind, I like to spend 30 minutes a day reading about it-keeps me focused and inspired on my goal. This includes reading books, articles on the internet, internet forums related to the topic or anything in general that I find inspiring.
I’d also suggest including your mortgage in with your debt numbers. It will feel good to put everything out there and help in the process.
If you like hard boiled egges Trader Joe’s sells hard boiled eggs packaged in a resealable bag. I’m sure they cost more than boiling the eggs yourself, but they’re already peeled and cheaper than buying breakfast. You could also do what my boyfriend does – hardboil a whole bunch off eggs, peel them, and then store them in the fridge.
Granola bars are also handy for a quick breakfast. You can also make your own iced coffee – brew a pot and put in sugar and milk if you like your ocffee that way. Mix it all together and store in a jar in the fridge. Then, each morning just pour yourself a quick glass of coffee, grab and egg or granola bar, and you’ve got a light breakfast. Even if you need more than that for breakfast at least you’ll end up spending less once you’re at the office.
As for staying focused I heard of one tip where you write your goal on a small piece of paper and tape it to your credit card. Each time you pull out the card you see your goal. It reminds you of the larger picture and makes it more likely you’ll ask yourself, “Do I REALLY need this?”
Austin’s first trader joe’s is opening in September in our ‘hood! we are excited.
the coffee is a big deal – can be very expensive. i think i might need to invest in a to-go mug.
On that note, I was having a hard time making coffee in the morning and always ended up buying coffee out. I invested in a 25-30 dollar coffee pot that I can prepare and set the timer for the night before. My coffee is made when I get up, and I all I have to do is grab it and go out the door. Also, it has the added incentive of making me not want to waste the perfectly good coffee, so I have the incentive to remember to fill my cup before rushing out the door. I used to drink coffee outside the house 3-5 times a week, now I have cut it down to 0.
I also bought a nice thermos to pour the coffee in (the kind that is long-lasting), so I literally have enough coffee to last me from 7 in the morning until 5 or 6 in the afternoon (still hot!)
For breakfast, I have some breakfast bars that I keep just for days when I am really rushing. I can always grab a bar to go with the coffee, and then I have breakfast in less than 2 minutes work in the morning.
As a grad student, I find that if I don’t take these steps right as I am finishing up dinner and cleaning up the table, they don’t get done. I make my lunch at the same time.
Normally, one person cleans the table and does dishes while the other packs lunches from the leftovers and prepares breakfast.
We’ve tried using envelopes and budgeting a certain amount of money for each category, but it never worked out well. So now we have a set amount to spend each week on everything except for fixed expenses, and gas because I work out of town and see this as a must. It works well for us because we know we have a certain amount of money this week to spend on groceries, entertainment, eating out, etc.
yes, we are leaning toward something very simple like this. i would get agitated if we would move money between envelopes. if we have big general categories that stress is removed
You’ve gotten some great advice so far and I’ve only skimmed the comments.
Budgeting is personal. Figure out what works for you and do that. Don’t do envelopes if it doesn’t work for you.
I keep our budget on Excel. I have a sheet for every month right now through December 2015. I’m the controller, my hubby is the free spirit. So, I manage the money and he likes it that way! 🙂
I have a ton of categories. I budget every penny and with keeping a budget out 2 years, I set long-term savings and need-to-save-to-buy goals. We do not go into debt – its the leach of your budget.
I have a few items on auto bill pay, but those items are still in my line budget because I need to make sure they are subtracted from my account (and use ONE account – no cheating and hiding money by having separate accounts).
The majority of my bills I pay through bill pay monthly as well, but I go in and set up the transactions (so not auto every month). I do this because we get paid every 2 weeks so our paychecks are never on the same dates every month.
Though I have a ton of line items in our budget, they are divided into 3 categories: Basic Expenses – this is mortgage, water, heat, food, fuel, life insurance, etc. NOT hair costs, not clothing. Second is Debt Snowball – We have minimums and then the lowest debt is being dumped into everything else we can scrape up. Third is Extras – this is clothing, fun money, haircuts, entertainment, etc.
We are a family of 7 making just over 70K a year. My husband and I get about $50 per month for movies and fun and personal clothing and haircuts. I budget about $30 a month for clothes for the kids, most all of that coming from second-hand stores. We have paid off over 40K in debt, have about 18K left that we should be able to have paid off in the next 10 to 12 months. We eat out as a family once per month. We have a date night budget of about $40, which with coupons and sharing meals we can spread into 2 dates.
Our grocery bill is our highest expense – higher than our mortgage. I live in one of the most expensive counties in the country (King County in Washington State). My grocery bill for 7 people a month is right around $1,000 and sometimes up to $1,200 (that does not count eating out). We homeschool, so every meal is at home (ie no school lunches). My husband packs a lunch and makes his own coffee every single day. I cook a lot – a lot! I cook from scratch most of the time, with using some pancake and other mixes (Costco is my favorite store!).
We put a lot of money into our kids education – we homeschool – and I personally struggle with the money number, but its way cheaper than private schooling (okay for me its a lot of $$ – about $700 a month with co-ops and the kids’ activities, plus curriculum costs on top of that – again I really struggle with that number but I also see the value in it, and that’s for 5 kids!).
We camp for vacations and I’m always on the lookout for free or very cheap activities. My kids have been to every museum for free within a 50 mile radius, and some of them were really cool! (we are in the Seattle area). Life can be done on the cheap and done well, it just takes a bit of effort.
I also work part-time as well, basically to cover the educational expenses for my kids.
Having long-term goals is really key. Its one of the main reasons that we budget out so far – I can tell you right now how much I have for Christmas and what that breaks down to per family member (for the next 3 years). Another advantage is we know where our money will be going after our debt is paid off – to a family vacation to Disneyland, retirement savings, home improvements (including a hot tub!), AND we’ll become season ticket holders for the Seahawks, all with cash! Goals are good and you get there by budgeting, saying NO and developing restraint!
Buy used, save the difference – shop on craigs list (we just did a kitchen and laundry update (all with cash and we did the work). I got 5 new-to-us appliances for only $350 bucks. They work great!), use ebay and craigs list to sell as well as buy, and never pay full price for anything!
You can do his! Question every single expense! Set some BIG goals and make a plan!!!
I hope you won’t feel guilty about education costs for long. What you’re doing is so important and it’s not even that expensive compared to private school costs! Great job!!
Thank you Emily. I know its the right choice for our kids and when I really break it down its a steal for a quality education. Sometimes my planning, get er’ done, get out of debt mindset can make me want to cut it, but I won’t!
thanks for the encouragement! i started writing everything down today and i’m already feeling better!
Breakfast. On Sundays I have been known to make lots of egg & cheese muffins or lots of egg burritos and freeze them for the week. Of course you can add what you want to them, bacon, sausage, cheese, salsa, etc. Our grocery store frequently runs English muffins on sale BOGO so that saves money too. You can pretty much make a bunch in an hour or so and then just grab one and go in the am. Easy peasy. 🙂
Eating out is our biggest household expense, too, but we’ve found some good in-between steps. The dream is to make big dinners, then bring the leftovers for lunch. But when that doesn’t work, we stock up on Kashi, Trader Joe’s and Safeway Organic frozen meals (usually between $2-$3 a pop, way cheaper than lunch out).
We also get Luna Bars and greek yogurt at Costco or whenever we find them on sale, and I stash microwave oatmeal in my desk at work. Basically, food we can stuff in our bags on the way out the door and eat at our desks.
Trader Joe’s has GREAT microwave Indian Food and toaster-ready naan, which has helped out on those nights when we don’t feel like cooking.
Also: meal planners from Martha Stewart and Real Simple have been great, as they take the stress/guess work out of grocery shopping and rely on a lot of “leftover” ingredients throughout the week.
We used to buy vegetables, etc that looked really gorgeous but always ended up wasting some because we didn’t know what to do with it; the meal planners give you a shopping list and recipe guide and make it lazy/idiot proof: you know exactly what you’re eating on Thursday night, rather than coming home and debating about it and then getting so hungry you order a pizza.
And when in doubt: grilled cheese.
Catherine – this is great advice. I’ve found that when I’m “craving” takeout food, if I go to Trader Joe’s, I can usually find something similar (i.e. – their steamed dumplings or Indian food) that is WAY cheaper than going out to eat, but saves me the hassle of cooking.
Lots of great advice on here already! We also don’t break things down into small categories. After the bills are paid and money goes into savings and we fund what Dave Ramsey calls “sinking funds” for things like oil changes, Christmas, etc (all of the things that sporadically happen during the year), we have 2 amounts left over. One I just call “spending money” and this is to cover daily small expenses like running to the store for milk, etc. I divide this amount by the number of days in the pay period to get a daily estimate of what we can spend. We can and do go over from day to day, but then we know when the money’s gone it’s gone and I’m constantly tracking it. The other amount is a combined blow money fund. Whatever is left over at the end of the pay period goes into savings or on the mortgage.
Reading some of these incomes and budgets has been eye opening for me and quite unpleasant. Hubby and I are clearly blowing too much money every month and could be meeting our goals much faster if we could buckle down more. I have to be honest though and say we started our journey when the previous blogger, Claire, started hers and we’ve paid down $45,000 in debt, but I’m getting burned out. My husband is the free spirit in our marriage and he actually told me to “stick with him” last night on paying down the mortgage. He still wants to see it through and I’m just tired.
Good luck in creating a workable budget!
I too get tired sometimes of creatively “making do” with the wrong thing because we are being too cheap to replace, or get the right thing. Usually it’s only one or two things that are really irking me and it definitely can be worth the investment in sanity to spend a bit to take care of those two things. It can be hard to figure out what they are if everything is annoying you, though. Try to see if there are two things you could do that would make you less tired.
Good advice, Emmi! I’m not sure what’s making me so tired with this yet, but I’ll try to figure it out. I even designed our budget so we wouldn’t be so short on money that we got discouraged. I think I’m afraid we’re not doing enough. My hubby says we’re doing just fine and WAY more than people he talks to and gets frustrated with me. I’m terrified about not having enough in retirement. Meanwhile, our statements come in and we’re way down and not making much progress these past 5 years.
Maybe you just need more sunlight and a b-12 supplement? 🙂
Hey There!
As a working 30 year-old who keeps a budget but has the occasional blowout (because, who doesn’t?), here are some things I do:
– Keep a budget spreadsheet in Google Drive. You can share access between both of you and it’s free. And it travels with you anywhere because it’s in your gmail.
– Pay myself first. I hear this over and over again, so I’ve really tried to make a point to do it lately. I put a (fairly substantial) percentage of every paycheck in savings before I allocate money to debt payoff. I’ve read a lot of people putting every last extra dime towards debt payoff, but with my savings, retirement, and emergency fund low, I figure I’m better off allocating a good amount to savings now vs. next to nothing for savings and all towards debt.
– I hate leftovers (especially reheating meat, yuck) so what I’ve tried to do lately are salads for lunch. One I like is quinoa, corn, and black beans. Mix it all up and keep in the fridge. Spoon a bit out everyday and add kale, tomatoes, cheese, anything, and take to work. Filling, healthy, and I make about 3 days worth at a time.
– Really encouraging myself to spend next to nothing during the week so I can adjust for that (probable) blowout over the weekend. I try to keep myself to $40 during the week for coffee, eating lunch out when I’m too lazy to make it, snacks, etc (not including gas). So when U have that Friday Happy Hour and spend $50-$100 shopping for necessities, clothes, etc, over the weekend, I don’t feel like I’ve completely blown it.
I admire people who can stow-away every last penny and donate plasma (props to that girl!), but that route’s just not for me. I know I’m going to have my blowouts and want to feel like I’m working to live… not living to work–just my opinion.
Lots of luck!
We take our blow/spending money out of the bank in cash every payday. We both get paid semi monthly. We each get the same amount of blow money and since its in cash when it’s gone it’s gone. Any eating out either of us do at work comes out of our blow money. We consider that a want and not a need. We find this works well since its already budgeted for we aren’t blowing money we can’t afford and then we each get a bit if money to so with what we want.
We are a family of five, but when I cook dinner at night I cook for six. That extra portion goes right into the storage container when I am serving up our dinner plates (so that nobody takes it as seconds!) and straight into the fridge for my lunch the next day. I’m a teacher and I only get 30 minutes for lunch, so I have no choice but to bring my lunch- there just isn’t enough time to go out!
Just last night my husband said, “this is a big piece of pork” (on his plate). I said, “cut it in half, right now.” And I put half away in the fridge. He had it for lunch today. You really have to be proactive, but it gets easier to take action when you need to because it’s so lazy later.
We use an app called EEBA on our phones which are virtual envelopes. We use them because we can both always see how much we have left and it allows us to use our credit cards for every purchase for the miles. That said we give ourselves $2000/month for food, gas, kids clothes, household necessities and entertainment. If a month has 5 Saturdays we give ourselves $2400. We keep a separate annual vacation budget of $6000 but sometimes cut that down.
We also each have our allowance of $10/wk to spend how we want. I cook dinner almost every night with extra to pack for lunches as I clean up dinner. One of us cools breakfast every morning. We will usuallyake scrambled or boiled eggs and sometimes add a link of sausage if I cool the entire package over the weekend.
Thanks for asking those questions! I am finding the answers very instructive. Am a newbie to budgeting too.
On breakfast/lunch: I can’t leave the house without breakfast, so I may not be a good example, but on working days, breakfast is completely routine. There is zero element of choice in it. I think that helps keep it easy. Up, switch on the coffee, stick toast in toaster, jump in shower, read e-mail and headlines while downing breakfast, and out…
For lunch, I tried getting it organised for everyday but got a bit resentful from the lack of choice (in my job, dreaming about my lunch choices felt like a good escape), so I stuck to having enough leftovers from dinner twice or three times a week and bringing those in for lunch (prepared the night before in a box that just slips into a bag). Even doing it just twice a week is 8-10 fewer meals ‘out’ and a good balance for me.
Nothing to add, just wanted to say that this is the best post on Blogging Away Debt I have ever read. Good information and love the way it’s interactive with the reader!
We always has trouble sticking to a budget because of food, too. What worked for us was planning meals ahead of time and going grocery shopping on the weekends. We didn’t get so specific that we would assign exact meals to certain days, but on Sunday we would come up with a list of 5 meals. We also made sure to stock up on easier frozen meals or meals that we could make in bulk for those days when cooking wasn’t going to happen. For breakfasts, I started keeping cereal or granola bars to eat at my desk. For lunches, I would bring in all the ingredients for a salad on Monday and just make the salad everyday during my lunch period.
I was always good at saving, and my wife is good at spending it got to a point where we had to spend out of separate accounts. (mortgage account) we both contribute half of the mortgage every month
plus an extra 150.00 just in case one of us lose hours of work, I take care of all the utility bills, and she takes care of the groceries. at times it becomes frustrating because I cannot talk her into saving, but we have adopted the 52week savings plan and so far it has been working.
Eating out is personally my worst habit that I need to break financially because it is so expensive! I haven’t started using a cash system, but I need to because I find that seeing money makes me think twice before spending!
Baby steps…just like Dave says.
Save the $1000 for emergencies (I have 10 $100 dollar bills tucked in a ziplock, stashed in the back of our closet)
Write it all out (which you’re doing)
Our weakness is eating out. We know that, so I pad my blow money for eating out every Friday night.
To make up the money from that, we have a pretty set menu for the week. One night, soup and sandwiches (mostly homemade) Pasta Night, Vegetarian Night, etc… ‘Emeals’ really helped me (Dave promotes this site)
Acknowledge your weaknesses. Write down everything. Figure out your snowball amount and Don’t use credit cards, ever!
AND you will be a very wealthy family in just a few short years..
Chris, you can buy a fire prof box for your stash at SAMs club for about $30!
I think you need to find what works for you, for sure, and so you are asking good questions.
We do 3 things:
1 – Use personal finance software to very easily and quickly know *where every single penny goes.* Maybe this is because I am an accountant. I am used to looking backwards and using software to save time. I guess this is kind of “review and improve.”
2 – We “budget” on an annual method. I find this way easier, and recently read that a bigger picture/annual approach is generally more successful. This allows a little give and take. If one month is crazy expensive, we can buckle down the next month. We also take every single “non-monthly” bill (and predictable expense), total it up for the entire year, and divide by 12, setting it aside every month. I am not into having a lot of categories. The “annual 1/12” fund just pays for everything that is not monthly. I could waste a lot of time dividing it all up into 100 categories, but don’t see the point.
3 – Regardless of the above, we just pay ourselves first. All our bills will always be paid in a timely manner. So, we just treat our savings like any other bill. As long as the savings goals (priorities) are met, then it really doesn’t matter at all where the rest goes. So I think we also really just prefer the flexibility of this method. We’ve had a higher income where we haven’t had to think much and could save 50%+ of our income. With a lower income (95%+ of our lives), we have to track and be more careful. But in either situation it does work.
We don’t use cash, but it is probably wise to in your case.
I think my budget illustrates the simplicity. We have no work benefits or non-mortgage debts:
$1,300 (For the 1/12 annual expenses – insurances, property taxes, car repairs, dental, vacations, and even some small annual expenses here and there).
$1,000 Mortgage
$1,000 Food/Gas/Miscellaney**
$900 Health Insurance
$800 Retirement
$500 Savings (mostly for car replacement and home repairs)
$300 Utilities/cell/internet
**Misc. usually ends up being things like haircuts, movies, gifts, eating out, and little stuff that just comes up throughout the month. If it’s been a slow month we can splurge a bit. If there is something we probably can’t afford, then we can cut way back on food and gas for the month to make it work.
I admit at face value that our budget might look kind of sad, but this is just our salary allocation. We actually hustle quite a bit on the side which means we can significantly fatten our savings while finding more to splurge. Also, my spouse has not worked for over a decade, so we are okay with the material and spending trade-offs in exchange for not having to work as much. *That* is priceless. Maybe it’s also easier to hustle for a treat.
I also think that striving for *perfection* is the downfall of many a budget or diet. We are far from perfect, but try to just allow a lot of room for error. You dust yourself and move on when you have a bad month. I could beat myself up every single month if I really wanted to, but I am not going to do that. It’s not productive.
To clarify on the misc. part of the budget, we usually spend $500/month on food and $300/month for gas, for a 4-person household, so really only leaves us $200-ish a month to work with. For 4 people, it is not a lot. (I realized this information was useless without knowing size of household).
I think your budget looks fantastic! We also do the 1/12 method and add up all of the extra expenses throughout the year, divide by 12 months and put that amount in a pool of money. As each expense comes due, we always have the money to pay for it and don’t have to stress about it monthly or cut ourselves short for the month.
It’s so fun hearing how many other people use roughly the same methods as we do and how successful they really are!
Oh, another trick to consider – if you are paid bi-weekly then two months of the year you get three paychecks. Try setting up your budget for a typical two paycheck month. Then, on those months with the extra paycheck you can either use the extra to pay down debt, pump extra into savings, or treat yourself to something fun.
I would HIGHLY advise you looking into YNAB (you need a budget). It’s amazing, and I think it will help you guys out!