Search Results for: budget

Is Not Keeping Up with the Joneses Boring?

April 27, 2015 By MelissaB 3 Comments

We’ve been on a journey to pay off our debt for 3.5 years now. At first, we were gazelle intense, but then I burned out from working too hard, so we slowed down on the debt repayment.

Last year, we moved to Arizona from Illinois, so our money became much tighter as we faced unexpected moving expenses. (Aren’t there always unexpected expenses when making such a long move?)

To make matters worse, in the first 3.5 months of 2015, we’ve faced $5,000 in unexpected car repairs and dental bills.

The good news is that even though we haven’t made significant debt repayment progress over the last year, we’ve been able to pay for all of these most recent expenses in cash, without going further into debt.

Basically, each year for the last 3.5 years, our budget has become tighter and tighter. We’ve definitely NOT kept up with the Joneses.

Yet, we’ve not found this type of life boring.

We Appreciate Splurges More

If anything, living this way makes us appreciate a “treat” that we used to take for granted. For instance, I homeschool my kids, and my daughters recently completed preschool and kindergarten. They were both very excited about moving on to kindergarten and first grade, respectively, so my husband and I decided to take the family out for a treat.

We went to our favorite restaurant. We went for breakfast, so the bill would be cheaper, and we used a $25 gift card that we had gotten at Christmas and saved. Because we had not gone out to eat in about five months, the kids were beyond thrilled. All of us enjoyed the meal greatly.

Because we haven’t gone out to eat in so long, doing so was a special treat.

Before we got on a budget and started paying down debt, we often went out to eat three or four times a week. Honestly, because we did it so often, going out to eat had become boring. Now, because we don’t do it very often, we appreciate the meal when we do go out.

Because we have simplified our lives, we are able to enjoy special occasions much more.

We Have Plenty of Fun—For Free

Just because we aren’t keeping up with the Jones and are on a budget doesn’t mean we aren’t having fun. Just this week, my mom was in town for a visit. We took her to a national park, which had free admission that day. We watched artisans make homemade tortillas and weave baskets. We listened to a local band, and we got an excellent tour of the site. Before heading home, we enjoyed a picnic lunch on the grounds.

Last month we went to the Tucson Festival of Books. There was so much to do (for free!) that we stayed over five hours. We could have stayed even longer.

Going on a tight budget and deciding NOT to keep up with the Jones can be difficult at first. Now, however, we’ve done it for so many years that we find living this way actually improves our quality of life.

Living on What You Earn Can Make You Feel Broke, and That’s a Good Thing!

February 23, 2015 By MelissaB 4 Comments

Living on what you earn can be a difficult thing. For many, it seems like a little like a foreign language; difficult to learn to do, and backwards. But, if you can learn it, and transform your life into one where you’re living on what you earn, it can make a whole lot of difference. You’ve got to start somewhere, though. I, like you, haven’t always lived on what I earned.

Almost all of my life, I’ve owed someone something. When I was 19, I needed a car. My parents, tired of having me call them late at night after my old, beater car had broken down—AGAIN!—, decided I should buy a new car.

I didn’t qualify for a loan yet, so my grandpa lent me the money, and I paid him back with a small amount of interest, which was less than I’d pay borrowing from the bank and more than he’d make in a safe investment.

Soon after, I went away to college and took out student loans and started running a balance on my credit cards.

By the time I finally paid off my student loans a few years ago, my husband had his own loans that we had to pay.

Can you see me, just like the proverbial hamster running on the hamster wheel?

I owe, I owe, it’s off to work I go.

Until one day, I said, “Enough!”

No more.

Time to live on what we make.

Time to stop borrowing.

Time to start saving.

And that’s when the real challenge began.

Our society is built on borrowing. Borrow for school, borrow for a car, borrow for a house, rent to own, pay in 10 easy installment plans.

I’m done living that lifestyle, but in turn, I’ve picked a much more challenging lifestyle—living on what we earn.

Cutting Until There’s No Room Left to Cut

The first thing I did was develop a frugal, written budget. That meant taming our grocery budget from $700 to $1,000 a month to $500 a month to feed our family of 5 with gluten, dairy and corn intolerances. It isn’t easy, but we’re doing it.

The next step was to keep a record of everything we spend. Honestly, I hate keeping this record, so that alone is incentive to spend less.

I spend an hour or so every week, reconciling the budget and making sure we’re on track.

I also started regularly saving for irregular expenses. Every other week, I put $120 in an account earmarked for utilities. In the winter, our utilities fall far below that, but I still keep saving the money for the expensive summer months. This way our utility costs are the same all year long.

Handling Unexpected Expenses

While the new budget can feel somewhat restrictive, what I find most difficult are the unexpected expenses. Just recently, I found that two of my kids have cavities (quite a few!), and the price for fixing them is around $400. I have money set aside in a medical fund, but filling the cavities will just about wipe that money out.

The problem is that we have many other medical expenses–$188 for my son to get new glasses and an eye exam and a pending $3,300 expense for him to get braces. I could put his braces on an interest free payment plan, but we don’t do payment plans anymore, interest free or not.

Instead, we had to make hard decisions like canceling our trip to see family this summer.

Living on cash is definitely not easy, but I know once we get through the next couple of years, as our income increases, it will get easier.

We are, as Dave Ramsey says, “Living like no one else so later we can LIVE like no one else.”

Do you eschew debts and payment plans, or do you use them in moderation to meet your goals?

Do You Compare Your Finances to Others?

December 8, 2014 By MelissaB 9 Comments

I belong to several Facebook groups, and recently, a woman in one group asked the seemingly innocent question, “What do you pay for cell phones and car insurance?” She added, “We pay $180 a month for our cell phones and $345 a month for our car insurance.”

Say what?

When you read that number, you automatically think one of two things–“Wow, she’s paying a fortune for cell phones and car insurance!” (that was my initial thought), or, you think, “Sounds about right.”

A few of you may even think she’s getting a good deal.

My husband and I each carry a cheap cell phone from Tracfone that is for emergencies or occasionally checking in with one another. We don’t spend any more than $10 to $20 a month on them. Our car insurance is about $55 per month. (We only have one vehicle.)

After reading how much this woman spent, I was feeling pretty good about myself. But why? I really don’t know her situation. Her cell phone plan might include cell phones for the whole family. Her car insurance is likely for multiple cars. Maybe she has teenage drivers, or maybe she or her spouse has gotten a ticket recently.

Besides, I have no idea how much money she makes. These bills might not be that extravagant in relationship to her income.

There’s really no point comparing my situation to hers. To do so would invite complacency toward my own budget at best, and a loosening of the purse strings at worst because, hey, other people are spending a lot more than me.

The Only Time You Should Compare Your Spending to Others

Generally, I try not to compare my spending or budget to others. Circumstances vary widely, and knowing another person’s exact financial situation is difficult. Too often, especially online, we get a snapshot of someone’s finances and think we see the whole picture when we don’t.

We make assumptions of our own financial situations based on others.

Ultimately, we need to strive to do the best we can do with our own budgets. To beat ourselves by spending less and/or saving more than we did the month before or the year before.

The only time it makes sense to look at someone else’s finances and spending is when they are doing considerably better than you, and you want to learn from and emulate them. For instance, I knew my husband and I were spending too much for groceries. One blogger I read has grown a large garden and planted fruit trees so that she can feed her family of 9 for less than $300 per month. (Yes, you read that right.)

I know I won’t ever have a grocery budget of $300 per month, but reading her techniques and strategies has encouraged me to cut my grocery budget and try to spend less. It’s even inspired me to try out once a month shopping to reduce costs.

Ultimately, we shouldn’t compare our finances to others, but if we’re going to, we should only compare to those we wish to emulate.

Do you look at other people’s spending to make you feel better about your own or to motivate you to improve your finances?