Monday, November 7, 2011

Modest Mondays....

There's been a lot of talk around my house as of late about where we're going and when we'll pull the trigger on our "forever home"...some days I feel like our 1,400 square foot home is closing in around us and with baby #2 talk slowly starting I know its only a matter of time before we need something bigger and I want to be prepared.

All that being said, the hubs and I have historically done very well with cutting costs and getting by on little in a pinch.  When we have goals and budgets you wouldn't recognize us compared to the impulsive and reckless spenders we become without those important things.

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The past year has without doubt been one of our more impulsive and reckless years and neither of us are happy...see, money doesn't buy hapiness!!  So, what better to help than getting back to the basics and re-instituting a budget aligned with that ever-important "forever home" goal!!  I'm hoping to pass along some of our money saving tips and struggles but first thought I'd start with some budgeting basics that seem to work best for us!!

And as always, remember free advice is worth the price you pay....I'm certainly no expert in this arena, despite my accounting background, so please keep in mind these opinions are my own:)

1.  Set a reasonable budget - In other words, "don't set yourself up to fail."  Set a realistic budget that allows for unexpected doctor's co-pays, a night out to dinner, increases in gas prices, a new shirt, or maybe just a little Starbucks to make your morning.  Creating a budget that is so tight that you don't have any extra available can leave you with a bitter taste and be reason enough to abandon budgeting altogether.

2.  Get buy-in from all parties involved - I think its safe to say that in most homes, one person is primarily responsible for all of the finance stuff.  So, while that person has the most insight into whats coming in and going out, it doesnt mean that all other interested parties shouldn't have a say and agree to what is going to be spent where.  The hubs and I discuss our monthly budget as well as any extra or unusual things we know that need be included.  We are aware of our "extra" spend that is available and work together to stay within that.  It can lead to those dreaded "do you really need that" conversations but helps hold us both accountable and keep impulse spending in check.

3.  Align your budget with some long and short-term financial goals - It's much easier to do anything if you know there's a prize at the end...even if that prize is paying off credit card debt (for which you really already have the prizes).  We set quarterly, annual, and three-year goals (thanks to the "forever home" conversation) which helps us stay focused on the task at hand.  We found that only having long-term goals resulted in us always saying "we'll catch up with our savings goal next month"...and then we said the same thing the next month - cue the big fat "womp, womp."  We also like our short-term goals because nothing feels better than striking it off the list!  Long-term goals can be a bit harder to set because most of us don't know how much we'll be making or what things will be costing a few years from now but with some conservative estimates you can set some broad goals!

4.  Find a tool that keeps you accountable - We just recently started using Mint (I'm hoping to post more on that later) and its been great at tracking our spending compared to our budget as well as measuring our success in meeting our goals.  Prior to that, we used Excel spreadsheets to track everything and I loved those things...actually still using them as a back-up but they require regular updating and tracking by you...which can be quite a bit more time consuming.

5.  Simplify your life - Figure out what's worthy of being in your budget and what's not.  As of late, the hubs and I have spent some time studying where our money is going and eliminating those that we don't use or no longer find value in...for example, the newspaper.  Most days it sits on our driveway as the hubs and I catch up on the news via the internet.  Seems a little silly to be forking over $14 a month just to take-up space in our recycler!

I'm hoping to make a weekly go of these kinds of posts and share our struggles and cost-cutting measures.  There is nothing easy about the financial part of life...some days I look out back just to make sure I didn't miss a money tree in my backyard (and then remember I live in a money pit so those ideas dont reconcile)!

I'd love for you guys to share your budgeting tips or struggles and if you're at all interested in guest posting here about what does and doesn't work for you when it comes to living modestly, let me know - I'd love to have different perspectives!!

J

14 comments:

Samantha said...

What great tips!! We have to have that "forever home" talk soon, I think right after the holidays. If I come across any other good tips, I will certainly pass them along!

Traci said...

I am so excited to hear your tips. With me working part-time and a baby on the way it's a little hard to save money this time around.

I already like your idea of quarterly goals. You are so right if you do year long goals you just wait until the next month to save and then the next month.

Lucy The Valiant said...

Awesome tips!! I've just started saving for a trip we're planning this spring... I'm making a point of keeping my groceries under my weekly budget, then getting the rest of that $ out as cash back and tucking it away.

Natalie said...

This is great advice Miss CPA! My husband and I are always talking about our savings and a bigger house. Who knew a little one could take up so much room? I like that you break up your goals for different parts of the year too.

Cheryl E. said...

Great tips! This whole budget thing with a baby is very hard but such a necessity.

Lindsey said...

We just started budgeting again. I am competitive.. give me a goal and I will get close to it.. then gloat. It is amazing to see how much less my credit card statement is this month. (we charge everything for the cash back and pay it off every month) I agree with setting realisitic goals. Adam freaked when I put $525 as our grocery budget for the month, but he obviously doesn't shop and realize how little you get and how expensive food is!

We just purchased a larger home (current is 1380 square feet) and while it is not our forever home, it is perfect to raise a family in. The nice thing is our mortgage will only increase by $100 a month and we just paid off Adam's student loans and my car so in reality we will have an extra $800 a month!

Tami said...

Great tips J! We have been horrible about sticking to our budget this year! We recently decided to start using the envelope system but we haven't implemented it yet.

Cajun Cowgirl said...

What a great idea and good advice! I hope you keep posting more in the future. Happy Monday!

Mrs EyeCanSee said...

These are great tips! I've been meaning to sit down and look at our budget for WAY too long!! It needs to be done....I know we spend an obscene amount on "wants" we could do without. I'd much rather brown bag it for lunch and finally get out master bathroom shwoer in working order!

Megan said...

I'm ready for a bigger place too!! There are 4 of us in a two bedroom house. And yes, it works, but I can't help but want bigger.

We can afford our current standard of living, but I too would like to buckle down and get serious about saving so that we can afford a bigger place in the next year or so.

Happiness Is... said...

We are right behind you - the 2 years that the husband was in business school we just didn't budget because it was like "what's the point" (bad attitude probably), but we also didn't rack up any credit card debt (we always, always pay ours off)...but now that he's done with school it's been harder to buckle down and pay attention because we got used to just spending what was in the bank account. But you'd be amazed at what you can save - we got rid of his gym membership ($60/month) and I am about to get rid of our home phone line b/c I have an office line so do we really need 2? Those 2 things right there are about $100/month together, which is $1200 a year - that's a lot!

Our Happy Married Life... said...

Love this! We are totally in the same boat. We need to move so bad but there's no way we could sell our place w/o coming to the table with about 20K. Ugh! We've been good about saving for the future move but I KNOW we could do better. I can't wait to read more ideas and successes from you! I'm definitely going to check out mint.com. I've heard great things! Good luck!!!

wallacefamilyblog said...

Great tips! We are also starting to try to crack down on the budget (always have done one) and eliminate those things we dont need. Especially with starting a business soon!

Kelli Kegley said...

I love this! We were doing so well with a budget and then we had Connor. He has helped us spend less (suprisingly), but I don't keep track of where it goes as well. I need to start again!