Gah. It's time to grow up. Help me figure out a budget. - Page 2

[JollyGG]

Like others we find it helps to have more than one account. So here goes. It sounds like more trouble than it is.

(1) -  checking for bills and household  + (2)a linked savings for short term savings - money is transferred between these two a lot.

(3) - daycare/flex spending checking - we figured up how much daycare was a year and then decided how much needed to come from flex spending and how much from out checking. We set up an automatic transfer every paycheck from our main checking to flex checking and have the flex checking reimbursement direct deposited there. I do need to work to stay on top of submitting  the reimbursement forms monthly.

(4) - Husbands checking - this is his discretionary/allowance money - His check's direct deposit has $60 out of his paycheck go here on payday and the rest to our main checking.

(5) - My checking - same idea as my husbands

(6) - Savings at another bank - long term savings - we've done this in the past and don't currently have one. We need to reestablish this. Basically we have our direct deposit from our bank spit and a set amount go into this account. Accessing the money involves withdrawing from one bank and depositing in another. We usually do a small credit union for this account.

I find my big budget suck is multiple trips to the grocery store. So I find that making a menu, making one big shopping trip and then having a rule that I'm not allowed to set foot in the store after that really helps our budget.

I also have a spreadsheet with the spending for the next month mapped out. So then I can see how much I have and where it would have to come from. So right now I have done the weekly shopping trip, the cars have gas, and there is $50 in our account. I need about that much to buy some stuff for my daughter. So if other spending comes up I'll either have to postpone getting the stuff for my daughter or dip into savings.

[lilacvioletiris]

Try using mint.com to set up a budget.  It has a nice interface with different areas that would be in a budget and it can connect with mainline banks (too bad my little credit union won't connect, but such is life).

[journeymom]

Great thread!  

[greenmom4]

This is a great post - makes a lot of sense to me.  Thank you!

Originally Posted by AnkaJones 

I second (third) the Dave Ramsey plan.

I was where you are about six months ago.  We had what should have been more than enough income, but were still somehow hemorrhaging money.  If either of us had been buying big ticket items, it would have been easy to fix, but it was all $10 on a book I "needed", and $5 on a latte and scone because I woke up late and didn't have a chance to get breakfast before leaving, or $20 on takeout because we didn't have food in the house [BTW, we live on the east coast... I realize these amounts probably sound extravagant to someone in the midwest, but these are relatively cheap for our city]. 

What we did was look over the bank statement from the prior month, and made a budget which just reflected what we were already spending.  I didn't try to save at all.  The only other major change was we started meal planning; again, no attempt to scrimp or save, no cutting back.  Just every week we had a plan, shopped for the plan, and stuck to it.  In the first month we saved about $500.  I was stunned, because we had decided we weren't going to try to save.  About $100 of it was saved because I found we had recurring payments on our bank account that shouldn't have been there, and cancelled all of those.  Another $100 was books (I started using the library).  The other $300 was food and eating out.  The other thing I noticed was that because we were committed to staying on budget, there was a pause before every purchase ("Is this in the budget?").  Even though the answer was almost always yes, because again we hadn't really cut back at all, that pause kind of focused our attention on the money we were spending.  In retrospect, having a month where we didn't try to cut back but had a budget was great because it helped get DHs buy in, and gave us as a family the chance to adjust to a new way of thinking about money.

After one month of being on that "no save" budget, I made a new budget that reflected our reduced spending and we did the same thing for another month.  By that point, meal planning had become pretty easy and we had worked out some early kinks (we both work out of the home, so I try to make sure we only cook 2-3 days per week, and that weekday recipes are really easy), so we were able to start looking for deals and stocking the pantry.  Our grocery costs plummeted, and our food waste went way down.  Again, no cuts that felt like cuts, but we were now making serious progress on paying our debts.  This was the first month we saw our minimum payments go down because we completely paid off the car, which was almost paid off anyway, but suddenly we had another $300/month which could go to debts.  It was easy progress up front, and really helped keep us motivated.  Again, DH was giving even more buy in, and started to get excited about it.  The third month we made some more difficult cuts.  Again, this is something where we sat down at the beginning of the month and were like, "It's embarrasing we spend over $100 per month on our phones"... it hand't been a plan when we first wrote our budget.  We cut our cell phone plan back.  We started line drying clothes.  We started having one frugal meal per week (breakfast at night... no one felt deprived).  Again, big debt payments.

Fast forward to today -- we're cut down to a lean-mean-savings-machine.  Our monthly minimum payments on debt are about halved.  And this turned out to be a far bigger deal than I could have imagined.  DH is getting laid off (OUCH!).  But guess what?  We're okay.  We wouldn't have been okay six months ago, but when it kicks in Feb 1, we're okay.  What could have been an incredibly stressful time is instead me and DH looking at each other with pride and realizing that because we were able to make those lifestyle changes over the prior six months, we were still finanically secure despite what would have been a pretty catastrophic problem a few months earlier.

As far as generalizable advice?  Start where you are.  If you try to do everything at once, you might lose your family buy in, so take it slow at first.  You'll be shocked by how big an effect just figuring out where your money is going will have on you.  Having a written budget will also make you more concious of where you're spending money... it'll become more intentional.  Look for places where your lifestyle improves when you cut back -- are you plaing more scrabble because your cable is shut off?  are you eating healthier and more tastey foods and spending less time hunting and gathering each night?  are you buying your way out of debt slavery?  Make sure you congradulate yourself on that stuff, and point them out to DH.

Best,

Anka

[journeymom]

I think we spend a ton of $ on food - and we don't really eat out at all.  Like last night I went to the store to grab stuff for dinner - and I spent almost $50.  $50!!  For one night with a few things that will work as snacks and stuff.  That can't be good.

This is us as well.  Except for the eating out.  We do that too often. We've got automatic bill pay for most everything.  Some money automatically goes into savings with every pay check.  We have no car payments, we own them. Cable is parred down to bare bones.  Dh's employer pays half of the cell phone bill. 

Groceries are the second largest monthly expense, after the mortgage. I guess that's fairly common. Edited to add, I mean I guess for a lot of families food is the 2nd largest expense, and it's common that it's a problem.

I'm going to try using cash only for groceries from now on.  I've been using the bank card. Dh prefers that, since then of course we have a monthly groceries statement.  The bank card is cash, he says.  But obviously that doesn't work for me, I just don't have enough discipline to stop and put something back when I get to whatever limit I decided on before hand. 

Now planning for a week of meals.  I loath that chore, mostly because I've never figured it out.  I have gotten better at not running to the grocery store when a meal idea doesn't immediately come to mind. I've gotten better at digging deep into the freezer and cupboard to put something together, even though my brain is fried and I'm tired.  "Just put something together!"

But we still have that issue, get home with more than $150 of groceries with nothing to eat. 

Edited by journeymom - 1/9/12 at 11:01am