I'm new to this forum though not new to MDC.
I've never been able to create a budget and stick to it. Budget seems like a vague concept of money going in and out that doesn't affect me from day to day. However, we now have a baby and I feel like I really need to get it together financially.
I think one of the big hurdles is getting DH on board. Budget to him is a four-letter word, it means you're not financially successful etc. etc. So I know getting him to see the success part of budgeting is necessary.
Neither of us like the idea of the cash envelope system though it seems like a very effective way of controlling your spending. Currently we put everything on the credit card and then pay it off every month so we can get the points which we use once a year to buy airline tickets.
I have years worth of data on our spending habits, I track every penny meticulously in Quicken, and I have no clue what to do with this information. How did you decide on reasonable amounts to spend on groceries, clothing etc. for your family? I can take the average of what we've been spending but I think we may have been overspending in certain categories. On the other hand I know DH doesn't want to feel like he's sacrificing anything. We don't live in extreme luxury but we are able to buy what we want when we want to.
Where do I start? What is a system that has worked for you where you previously struggled? Any input is greatly appreciated!
My tip would be: setting a goal. I never worked so hard at budgeting than when I had a goal in mind.
Do you have a budget to post that we can help you with?
Our babies: and a coming in July
Firstly, I think you should budget using excel spreadsheets if you know how.
Here is our budget that my husband meticulously budgets.
Things to consider are what your monthly income is.
We spend 30% on rent/ mortgage
18% on groceries and we buy mostly organic
11% for our savings
7% for car mainttaince
3% in car petro
6% student loan
2% house expense( cleaning supplies, pots pans,carpet patches stuff like that)
2% cell phone
6% other like personal or blissful necessities.
Does this help at all?
ETA we do not have television expenses.
@tracyamber, yes, thank you for that. I think what I really need to do is sit down and list all of our necessary expenses because I haven't even done that. I think I can figure a way in Quicken to show percentages of total spending.
@LoveOurBabies, part of the "problem" is that we have a bunch of money sitting in savings and therefore we feel like our goal has already been met, i.e. it ends up feeling like we're accumulating money just for the sake of having more of it. I'm not sure how to come up with a goal that we can both get excited about, I'll have to give this more thought.
This is going to be a long process for me and I appreciate your input!
I know what you mean. When we first started saving, it was a bit like that too (saving for the sake of saving and there wasn't a ton of motivation). Then DH lost his job and I realized the value of having put that extra dollar in with each pay, even when I felt it wasn't all that necessary at the time.
For our family, my goals have been:
Pay off debt
Save money for emegencies (including job loss)
And now more recently (once dh is employed again.. fingers crossed).. pay off our mortgage and move. We live in a very bad school district area and I'm not all that sure I can homeschool for much longer than a year or two, so we need to move to a better school district. If I were able to continue to homeschool, then my goal would be pay off the mortgage so DH can go back to part time work and spend more time at home.
Some goals to think about:
Do you want to homeschool? If so, do you want to both homeschool (which means part time employment)?
Do you currently live in a good school district?
Do you want to have an early retirement?
Do you want to spend a year or two on the road?
Our babies: and a coming in July
@LoveOurBabies, thank you for those great suggestions. I will bring this up with DH, we might be able to get excited about saving for private school for DS!
@tracyamber, I hadn't considered a 529 or anything like that since I feel like we should still be making retirement savings a priority, but now I'm thinking private school might be worth saving for.
Thank you both for your input, it's helping me put things in perspective and giving me some talking points for the discussion with DH!
The most common suggestions or uses for savings are mostly listed here already:
Pay off debt
Pay off home, do home remodeling, buying a new house, etc.
Pay off vehicles, car maintenance fund, new care replacement fund, etc.
Kids homeschool/private school, college, car, etc.
If dh is the concern is there anything he might want you could save for? A new shop, piece of equipment, new truck, etc. Or like another poster said just being able to get away with less income so you have more family time. I'm not sure what your circumstances are but I know for us we can almost always find something we would like to save for.
Private school sounds like a great idea to save for. Those get expensive and aren't just tuition fees. Most of the time there are added fees and funds for the school, school supplies and uniforms get expensive, plus the lunches/snacks and all the little almost daily "extras" that come home from the school. Just to give you an idea I have two in public school which is tax paid but we still bought school clothes and supplies at the beginning of the year and supply lunches/snacks weekly. On top of that they come home with something new almost every.single.day. $3 for slice of pizza and drink during pep rally, school pics, school projects, PTA stuff, class parties almost monthly. This week so far it's 100 day school projects, $3 pizza/drink for committee, PTA meeting, and donate 5 items each to local children's home. None of this is required but it's part of school and costs money. Another thing to consider is activities for your dd at school age. Mine have done soccer ($150 each approx + gas and snack costs weekly) and will sign up for softball & baseball next month. If they did monthly activities these usually run about $50 month plus extra costs and supplies. Just something to think about when approaching DH about how much this will actually cost... it won't be just the monthly tuition!
Michelle mom to DD , DS , & lil DD plus and spending my days
|Frugality , Finances|