One way that I finally feel like I’m getting my crap together and getting ahead is our finances. Now granted, the way I feel toward this changes on a day-to-day basis sometimes, but we recently had a financial win (in a turtle-like fashion; a slow and steady win not a lottery-type win) and it’s made me realize we’re really not doing too bad!
For those of you who kept up with my posts last year, you may recall that Tyler and I took the Financial Peace University course, as well as got serious about a budget. Well, in the past few months as I’ve mentioned to friends and family that we’re paying off our debt, I’ve gotten so many comments from people saying, “I really don’t know how you do that!” “How are you able to buy _____?!” and similar remarks. Even after starting this blog series, I’ve gotten a couple comments about finances and how out of control they seem. This is such a common issue. I’ve gone back and forth so many times about whether I should post my budget online—obviously this is very personal, and we are trained to keep our finances to ourselves. However, I read this blog post where someone finally said that in the name of helping others, she would share her finances! And so here we are. I’ve been given motivation.
Now, as a disclaimer: we have not gotten this perfect. We are still working out some of our “bugs” and if Dave Ramsey or any other financial guru read this post, they would definitely have a few tips! But it’s working for us so far and getting us where we need to go, so…on we go.
Our actual budget is itemized more specifically, but for my own use (because I’m a huge nerd like this), I have broken my budget into four categories: giving, living, loving, and planning. On an average month, this is what they look like:
Giving: this is the first thing that comes out of our budget and it includes our tithe and any charitable donations. In order to make this easier on ourselves, we do all of our donating online. Right now we don’t have a lot of extra room in our budget for additional monetary giving, but I definitely am a strong believer that this is an important thing to do no matter where you’re at in life. If you don’t have a giving heart now, you’re not going to suddenly inherit one if you win the lottery. Also remember that if you don’t have extra money but want to go above the 10%, there are other ways to give—you also have time and talent! Volunteer! Breakdown: approximately 10% of our monthly budget (around $300-$330) is tithed and donated each month to our church and The Potter’s Hands Foundation.
Living: this category is for all of the things that we pretty much need in order to keep going. This is the “needs” category. Now, there is definitely going to be some differences of opinion on what qualifies as a need. This doesn’t need to be legalistic. It’s your budget, you decide. Just be honest with yourself! I will mention that I try each month to get my grocery bill as low as possible (usually around $300 but last month I managed $250!), and we do almost all of our shopping at Aldi. We got a great deal on our rent, we have the absolute cheapest internet package (but we manage to stream both Netflix and XBOXLIVE at the same time and seldom have any problems), and we have pre-paid smartphones with 2gb of data each month. We also probably have less trash than other people, particularly if you have kids or an in-home business, but we only pay about $10/month for our city trash bags. This is just a peak at how we try to keep this category as low as possible. Breakdown: approximately 51% of our monthly budget (around $1,530-$1,730) goes to our living expenses, the things we qualify as needs: rent, gas & electric bills, groceries, fuel & car maintenance, garbage, insurance, phone & internet, personal needs (such as shampoo, etc), and general household expenses.
Loving: this is for all of the things that make life enjoyable; our wants category! Again, there are things here that you may think belong as a “need”, and vice versa. You do you. When you get into the mode of budgeting and paying debt off, you can sometimes forget how important this category is. It’s so easy to under-budget and either end up miserable, not enjoying life, or going to the opposite extreme and blowing a bunch of money because you’re sick and tired of being bored! This is why it’s so, so important to give thought to this category. If you are the planner and your spouse is the spender, listen to them. Listen to their opinions on this category especially. Let them convince you to have fun. At the same time, it’s okay to learn how to cut back. Maybe going out to dinner twice a week really isn’t necessary? I’ll leave that up to you. 😉 I will also let you know that we have something that we call “blow money”, which means you can blow it on whatever you want. We each have our own personal fund for this, which means that you don’t have to consult the other before you purchase. Tyler usually uses his in one fell swoop in the beginning of the month on something he’s been wanting, and mine usually gets spread out on Mountain Dew and snacks throughout the month. The bottom line is, however we choose to spend it that’s fine. This is our saving grace when it comes to the budget. Breakdown: approximately 12% of our monthly budget (around $370-$390) goes to our “wants”. This includes clothing money, gift-giving, entertainment, eating out, and blow money.
And last but not least, Planning: our think-ahead category. This is any money that goes into savings or towards our debt. If you have investments, you could also include those. Personally, we have gotten our emergency fund to $1000 and therefore we aren’t currently adding any more money to our savings account, except in the cases where we’ve had to tap into it and need to build it back up. (Which is fine, by the way—that’s what it’s there for!) Our only debt is the student loan mountain that we’ve been climbing, because we choose to have used cars and avoid credit cards like the plague (except Kohl’s, because coupons. Don’t judge me.). It’s worth mentioning here that our minimum payments each month are higher than our rent. Ugh, it feels like it’s never-ending sometimes! But I really don’t want to be a slave to debt anymore. I hate that it dictates our lives. Well–no more, debt dragon! We WILL slay you. I will mention here that we use a variation of the Debt Snowball method, so we throw as much money as possible on one loan till it’s gone, and then move that payment on to the next one. Breakdown: approximately 27% of our monthly budget (around $740-$890) goes toward our savings and our loans. Mostly loans.
So there ya have it folks. If you’ve stuck with me all the way through, you’re probably either: A) trying to figure out your budget or B) my mom. Hi mom! If you’re not my mom and you really just want to get your finances under control, consider this your encouragement. You CAN do it. Take the time to sit down and figure out your budget. I know it’s intimidating, but it is so worth it!
This is part of the series 31 Days of Getting my Crap Together!