Bills Bills Bills

So, for the last several months (okay, year...since we moved into this house....), I have been trying to figure out a way to get our family on a budget and STICK TO IT. (it’s on my 30 before 30 list) We got a fantastic deal on our house, but it has taken some money to get it where we want it. And, it’s going to take more money to get it where we eventually want it. Luckily, we had some money saved up for the major things that needed to be done. But, that’s another story.

The truth is, we just haven’t been very smart with our money. Nothing drastic. We don’t have a lot of debt from big purchases. We have a mortgage. And Nelson’s school loans from his undergrad program. (we are VERY blessed that we don’t have any other school debt!) We also don’t have a car payment, though we are only living with one car at this point. And, our credit card debt has slowly but surely been building up. Not huge, obvious purchases such as furniture, vacations, electronics, etc. No, it’s that we get to the end of the month and there’s nothing left in checking and we go out to eat anyway or make a quick stop at Target and then….on a credit card. And, those little purchases have added up.

Our main issue is that we don’t budget. At all. We just assume that during each paycheck period, we will have enough money to cover whatever spending we want to do. Gosh, that sounds dumb, down right embarrassing to say out loud. But, when we were first married, with 2 strong incomes, low Monmouth rent and no children, that’s how life was. (sigh….not that we’d change it at all of course!!) Most of our spending has toned down, but we definitely still think we can go out to eat or get take out whenever we want. That’s our biggest weakness.

So, long story short, I had a meltdown last month, because the end of the month came and I had to put groceries on credit, because we hadn’t been smart and then, suddenly, we had $20 left in our checking account and barely anything in savings. I knew we had a problem.

Now, the credit card debt is there, but it’s not terrible. I’m not going to share the exact amount, but it’s doable. The most frustrating thing is that if we didn’t have credit card payments to make every month, we’d have more money and be much more comfortable. We’ve been paying the minimum, with interest adding on and making more purchases; the American downward slope. So, that’s one thing that’s changing. We’ve taken credit cards out of our wallet, except for one shared card for REAL emergencies. (i.e. the car breaks down, a medical emergency, etc) NOT for things we can wait another month for. We’re using Dave Ramsey’s snowball method (or something like that) to hopefully pay off the cards quickly and SOON. (Google it, if you’re interested)

The next step was figuring out each month’s income and where it had to go and what we had left over. I looked through past bills and figured out the average we pay on each item (some are always the same, such as the mortgage, others change all the time, such as the gas or electric bill) I factored in what we needed and are able to pay on our credit cards too.

I opened a new checking account. We now have 2 checking accounts and 1 savings account. Our 2 paychecks go into one checking account. Immediately each month, I’m now going to transfer a pre-determined amount into the second checking account. This is to pay all of the bills. The catch is we do NOT have debit cards for this account. We only are allowed to write checks and the checkbook stays at home. The money ONLY goes to bills. I am putting an average of each bill in the 2^nd account, so that I don’t get used to spending less in the summer and then not be ready for winter with the heating or if a bill goes higher, etc.

The remaining money in the first checking account is for groceries, gas, going out to eat, shopping and any other way we are planning to spend money during the month. I changed some things about grocery shopping, mainly that I’m now going once a week instead of every 2, mainly because I want to stop throwing out produce or other things because they don’t get used, etc. I am really, really trying to plan meals that are simple, but yummy, to avoid the temptation to just ‘go out’. I’m also taking a friend’s advice and doubling recipes, then freezing half for nights that I don’t feel like cooking. AND, they use less energy, since I’m not cooking 2 separate meals, I’d never thought of that!

This is where I’m turning to Dave Ramsey again. We are ONLY spending cash. I have a container of envelopes to divide out cash for groceries, gas and going out to eat. I plan to add some more envelopes and I’m still tweaking the amounts in them, since I just started this. If there’s no cash left, no going out (or whatever else). This may get sticky some months, but it’s working so far. Any remaining cash is yet to be determined. Probably I am going to put it into savings or make an extra credit card payment. I’m trying to get rid of the debt and then get a reserve of at least $1000 in cash. (Dave again)

And, just for fun, I made a bank out of an old yogurt container and stuck this picture on the front of it:

 

A goal for our next/first big family of 4 vacation, which will happen when we have EARNED and SAVED the money, not put on credit!!! Right now, any extra change is going in the (yogurt) bank.

So, that’s how this stay at home mom is ‘earning’ money. Or at least, not spending too much of what we do have.