Where to start?

[HeliMom]

I'm sorry I'm so ignorant about this, but how does one even begin?  I'm not used wanting to live outside of my means ( I have 0 debt and never buy anything with credit) but now our income has be cut drastically (we now take home 1/3 of what we used to) and we have a second child coming next month. Last month we spent DH's entire salary, with 0 savings left over.  Not good.    I don't even know where it goes. We pay for large ticket items, like subscriptions to the YMCA, upfront so I know it's not that. It must be little silly purchases here and there.  Things I never had to think about before. I just don't know how to figure this all out and actually find out our budget and figure out what we should change so that we have savings. When I was working we were saving 1,000 a month.  Now that I stay at home we are saving next to nothing, but the cost of the wrap around day care (6am-6pm) that would be required for me to keep working, plus the cost of the commute isn't worth my salary.  I've got to rethink my desires and "needs" if we want to ever save enough money to have a home of our own.

So what should I read?  How do I start budgeting? How to fix my brain  so that I don't just walk into a coffee shop and grab a drink since it's there and I'm early for my Dr's appt.

[Siennaflower]

Start by keeping a record of every purchase for a month.  Keep every receipt and just write it down.  At the end of the month tally up what you spent in different categories ie food, entertainment, clothes and this will give you the starting point of a realistic budget.  It will also highlight places that you need to work on changing habits.

[crunchy_mommy]

I agree, just keep track of everything you spend for a month. Keep a notebook on you & write it all down, and save your receipts. Then at the end of the month you can make a spreadsheet or enter it into online budgeting programs and see where all your money is going and where to make cuts. You can post your budget here as well and we can make some suggestions. Make sure you factor in not just shopping, coffee, etc. but also utilities, rent, insurance, gas, entertainment, etc.

If you don't want to wait a month, you can try pulling together old receipts and bills (still keeping track of this month's expenses, though!) to start getting an idea if there's anything you can cut right off the bat. You could also transfer $100/month automatically into savings (or whatever amount feels reasonable to you) -- if you don't have it, you aren't likely to spend it, but it will still be there if you DO need it! And by the same token, only keep a certain amount of cash on you and only use that money -- though this might be harder until you have some idea of how much you're spending, but if you have a checkbook or debit card as 'emergency backup' (in case your stuck in the grocery line with only $30 cash left), you could start now to start getting used to the concept.

Start planning ahead too. If you know you have a tendency to stop for coffee before your appointments (and that IS something that will add up over time!), add some snacks and a water bottle to your purse, and bring a book or magazine to entertain you. Until you figure out if you DO have money left over for luxuries like the coffee shop, act as if you DON'T have the money for it.

[FrugalGranolaMom]

I totally agree with the PPs. Start keeping track of every little purchase/expense, you'll be surprised how quickly the little things add up. When I was preparing to stay home, DH & I also started doing the automatic transfer to the savings as a PP mentioned. Keeping money out of sight, out of mind helps start to change your mindset to living with a smaller amount of money.

[FrugalGranolaMom]

Also, if your DH gets paid weekly or twice a month, keep a calendar with the due dates for all your bills along with the paydays. That way you can see what bills need to be paid with each check.

[GirlBoyGirl]

Good advice so far. Sorry about your situation, we are there, too! You definitely need a budget and I would definitely read Dave Ramsey. If you are spending here and there a lot on "silly little purchases" then you need to cut up the debit and credit cards and use a cash envelope system. GL!

[texmati]

We were in a very similar situation-- We never lived above our means; but we didn't really track/budget either. When i quit to be a SAH we finally started looking at our finances. (If you look up my threads here in teh last 6 months, you can see a bit about our process).

The thing that made the budget really click for me a zero based budget. Normal budget advice would be 'take your prop. tax bill and devide by 12 for your monthly budget'. Well... that kind of thing always made my head explode, since we'd be over in one month; but not in others. I knew we were netting money, since we have money in the bank but it was just frustrating.  I made up a spreasheet that we could allocate money into (sort of like an envelope system) and now we just go month by month putting the money where it needs to go.