The Beauty of Budgeting

budgetI’ve long since been a big believer in budgets for managing personal finances. For me it started when I was back in university, trying to figure out how to pay tuition and rent and still have money left over to eat. It wasn’t always easy, that’s for sure. From there, I just sort of naturally continued to keep a budget in one form or another.

Todd, on the other hand, doesn’t have the best track record when it comes to managing money. That’s part of the reason why we continued to have separate finances up until about a year ago. Combining our finances and putting me in charge of things was one of the best financial decisions we’ve made as a couple. I realize that this may not be the answer for all married couples; but for us, it just works.

For the most part, for the past year, we’ve been following the same budget, tweaking things here and there as we discovered what was (and wasn’t) working. And then…we were thrown an unexpected financial curveball, that required we throw our entire budget out the window.

…or did it?

The beauty of having a solid budget in place meant that I was able to, rather easily, sit down and figure out where to start making cuts. I knew exactly how much money I had to squeeze out of the current budget, and began chopping away at any non-essentials, and lowering the amounts allotted to variable spending amounts, like food.

Without a budget, “finding” several hundred extra dollars every month would have been an overwhelming task. However, already having a solid budget in place made this task manageable, and I daresay easy.  We’re now working with a temporary modified budget, that we can easily modify again when our financial situation improves once more.

Dealing with financial curveballs and unexpected life changes doesn’t have to be as awful as we’ve always been led to believe. Todd and I are definite proof of that. So if you needed one more reason to come up with a solid, realistic budget for your household finances, this would be it.  We’re very quickly learning that feeling in control of your finances, even if they kind of suck at the moment, is a very good feeling indeed.

Until next time,

~Kelly

 

The $21 Challenge: The Parts That Sucked

CaptureSo it’s been a few weeks now since we (successfully) completed the $21 ChallengeThe final verdict, if you recall, is that it wasn’t all that difficult, really. Thanks to my tendency to food hoard stock up when things are on sale, we had a pretty good stash of food items that we were able to rely on to get us through the week.

To be honest, though, it wasn’t all sunshine and roses. There were some parts about the $21 Challenge that kind of sucked.

  • We ate fewer vegetables than usual. Veggies – especially fresh veggies – aren’t always budget-friendly. I lucked in and was able to get some things on sale (i.e. super cheap broccoli) but normally in the course of a week, we eat more fresh fruits and vegetables than we did during the challenge. We also try to do a fair bit of shopping at the Farmer’s Market, which our plan also didn’t allow for.
  • It was time consuming.  Participating in this challenge meant spending more time than usual hunting through the flyers for sale items, digging through our freezer and pantry to assess what we had on hand, and carefully meal planning. Running around to several different stores to get only the best deals. I also lost most of a Sunday on food prep – making pizza, soup, cookies, baking rolls, etc. for the week ahead.
  • Being forced to stick to the meal plan. Now, I’m normally a meal plan kind of gal anyhow, but there are times when I just don’t feel like preparing (or eating) something that’s scheduled for a particular day. When days like that do happen to pop up, it’s not an issue, I either make something different, or pick up something else from the grocery store. Staying on a strict budget doesn’t leave room for that. Of course, we did end up cheating while doing the challenge, on the night we decided to throw the plan out the window and have ice cream for dinner.
  • It didn’t allow room for a lot of fun. I’ll admit it – I like cake and cookies and ice cream and potato chips as much as the next person. I try not to indulge in those kinds of things very often if I can help it, but there’s something about being told that I “can’t” have these things that makes me want them even more. I may have spent more time thinking about Doritos over the course of the $21 Challenge week than I would have ordinarily.

So yeah…the $21 Challenge wasn’t perfect. But…and a very big ‘but’ – is that it ultimately saved us a lot of money. Sure, we ate fewer vegetables and it took a lot of additional time and effort, but I daresay that it was worth it. Especially considering the fact that this obviously isn’t meant to be an every single week thing. As a once-in-a-while thing, I’d say that it was definitely manageable. Manageable enough than in another month or two, after we’ve re-built our pantry and freezer, I think I’ll do it again.

…though next time I won’t blog about it nearly as much. Promise. 😉

Until next time,

~Kelly

 

When Life Throws a Financial Curveball

curveballSo. Without going into a whole lot of details, I’ll do my best to fill everyone in on where things stand with us. It’s been a while since I’ve posted, I know. The truth is that I’ve been feeling rather frustrated with our financial life at the moment, and quite frankly, I haven’t really wanted to talk/write about it all that much.

In a nutshell, I will say that Todd and I have had a financial curveball thrown at us recently. Not a devastating one, but one that has caused us to completely re-evaluate and re-vamp our financial plan. The good news is that it’s only temporary; the bad news is that we don’t know how long we will be operating under these news rules and restrictions.

What this means is that for the time being, we’re basically in financial emergency mode. Our goals of debt repayment are temporarily on hold, with the goal of simply not adding further to the debt. This also means that we’re likely going to have to get creative in terms of finding ways to cut expenses and save even more money. Which, come to think of it, aren’t bad skills to have to hone.

We’ve faced financial curveballs in the past, and we’ll face this one, too. It’s a part of life that most of us have to deal with at one time or another.

I’d love to hear your stories of any financial curveballs life has thrown at you, and what you did to deal with them.

Until next time (and I promise it won’t be so long before I write again),

~Kelly

Re-evaluation

budget

So summer is here and with it comes a lot of unplanned expenses. Things like Girl Guide camp for our daughters. Our family vacation week in August. A plane ticket for Todd’s oldest daughter to come see us. Then of course there will be school starting again in September, which always carries with it a certain number of expenses.

We’d been doing pretty well in the finance department since we started our new plan last fall. The past few months have been challenging, however, as a number of unexpected expenses have been popping up. We’re still paying off our debt, but we just can’t seem to build any amount of significant savings. We’ll get a bit of money saved up, and then something will come along that will require us to dip into it.

While frustrating, there are some positives to be seen. Firstly, the good news is that we actually have a savings account to dip into. That one is huge for us. Secondly, there is the fact that we haven’t had to further add to our existing debt to get us through these past few months. Also huge. Thirdly, we haven’t had to make any super uncomfortable budget cuts. What these three things tell me is that our system is working. We’re successfully adulting. Go us!

Recently we sat down and starting going over our budget, looking at the places where we could trim the fat a bit. We’re not yet at the point where we want to do anything drastic. We’ve decided to start with making a few small changes to generate some extra cash first, to see where that gets us. If it proves to not be enough, then more drastic measures might be necessary. More good news? There are places where cuts can be made. We may not like them, they may not feel all that comfortable, but seeking out constant comfort was what got us into this crappy financial situation to begin with, now didn’t it?

So…onward and upward.

Until next time,

~Kelly

Why Are “Promposals” Even a Thing?

So on my travels online I’ve noticed more and more articles about something called “promposals”. If you haven’t heard of this increasingly popular phenomenon, basically it’s a fancy, over-the-top way of asking someone to go to the prom with you.

Like a marriage proposal, but for the prom.

I thought the whole thing was ridiculous the first time I heard about it. I just…don’t…get it. Back in my day, if you wanted to go to the prom with someone you just asked them. If you were too shy to do it yourself, then you slipped them a note or got your friend to do the asking for you.

That’s it. That was how it was done.

But now, asking someone to be your prom date, or even sending them a text or a Facebook message just doesn’t cut it. More and more teens seem to be embracing this trend and going totally over the top with their “promposals”.

Worst of all? They’re dishing out tons of money for it.

I recently read an article on Huffington Post that said “promposals” make up 1/3 of students’ entire prom budget. Even more disturbingly, it would seem that the lower the family’s household income, the more the students spend on their promposal (as well as the prom overall).

On average, the article reports that teens are spending on average around $900 on their prom experience, an amount which is down from last year.

The article doesn’t state where this money is coming from, but I’m willing to bet a fair bit of that is being paid for by moms and dads. Sure, there are some teens out there with part time jobs, but do they have self-control to be able to save up that kind of coin? I’m skeptical.

At this rate, I’d better get my ten and twelve year old daughters to start saving up for their proms now. Because you know I know one parent who won’t be dishing out that kind of coin.

I’d love to hear other people’s take on this one. Is my age showing a little bit here? Am I the only one thinking that this is a lot of money to spend on one night?

Until next time,

~Kelly

‘Debt’ is NOT a four-letter word

debt

So I realize that in the grand scheme of things, Todd and I are still pretty new to the whole personal finance world (particularly the personal finance blogging world), but in this short period of time, I’ve noticed that many personal finance bloggers seem to have the attitude that debt is a dirty, four-letter word to be avoided at all costs.

And well, I just can’t get on board with that line of thinking.

One of the unavoidable realities of life is that debt is unavoidable. I mean…how many of us are able to walk into a bank and pay for a house or brand new car in cold, hard cash? Not too darn many, that’s for sure. Things like mortgages and car loans are pretty much unavoidable for the average person. Does that make them ‘evil’? Of course not! If you want to own a home or drive a car, then debt just goes along with it. Most people (even the most frugal of personal finance bloggers) are okay with that.

Also, let’s look at the matter of education. For most of us, our post-secondary education came to us with the help of some sort of debt. Sure, there are a few lucky people who, with the help of parents and/or a part time job, are able to make it through without accruing much (or any!) debt. Lucky ducks.

Again, education and debt are two things that go hand-in-hand for most of us. And many people would argue that it’s a ‘necessary evil’. Speaking from personal experience, I can tell you that I never would have been able to get a post-secondary education without going into debt. But was it worth it? You betcha.

Now, for some people, the list of ‘acceptable debt’ stops pretty much here. House — check. Education — check. Vehicle — perhaps, depending on who you ask. My point is that debt is a very personal thing and while for some people, there is no good reason to go into debt, for other people there is a lot more ‘gray area’. As Todd and I work to pay off our consumer debt, we are learning the hard way that getting out of debt is a whole lot tougher than going in to debt. We’re on the several year plan to get rid of our credit card debt with the ultimate goal of taking our family on a once-in-a-lifetime vacation.

But guess what? We’re planning to go back into debt to do it. And we’re actually both okay with that.

I’ll be honest, it really chaps my hide to work on paying off our current debt because for the most part, I can’t remember what that debt was for. Moving expenses, a Christmas or two, and what else?

**Shrug** Ya got me.

And that is the thing that bothers me. The fact that this money was piddled away on things that I can’t even remember. Possibly things that I don’t even have anymore. Such a waste.

But for us, taking an unforgettable family vacation is something that is worth going into debt for. It’s one of our priorities in life. Where some people dream of home ownership or driving a fancy car, we dream of travel. And guess what? We’re okay with delaying buying a home in order to have that.

Personal finances are like many things in life — it’s personal. Each individual (or couple, as in our case) needs to decide what the priorities are, and then work toward them. And sometimes, that requires going into debt. Going into debt isn’t the problem, it’s the paying it off. But as long as you’re able to manage your debt, and pay it off responsibly, then what’s the harm? It’s your life, it’s your money, and its up to you to decide what to do with it.

What about you? Is there something that you feel is worth going into debt for?

Until next time,

~Kelly

Making Financial Room for Fun

I get emails every now and again from people reading this blog and a common issue that many of us share is how to find balance when we’re dealing with personal finances. Specifically,  balance between being responsible and paying off debt, but still making room for some fun now and again. Todd and I find ourselves in that spot often. Sure, we’re highly motivated to get the debt paid off, but at the same time, we still want to enjoy life as it is right now, instead of always waiting for when “things will be better”.

We’ve tried to do this in a few ways with our budget. Our budget includes amounts for a regular date night, as well as “family dessert night”. We also give ourselves an “allowance” so we’ve got some spending money for small impulse purchases. We make sure to also set aside a little weekend cash so we can take the kids out to do some things. Sure, that money could also be put directly onto our debt, thereby paying it off a lot faster, but again, we have to find some balance there. Occasional fun – both with and without the kids – is necessary for our happiness. I can’t imagine that we’d be able to stick to budget very long that didn’t leave us room for fun.

This week I mentioned that Todd and I had to make a crummy choice because it wasn’t in our best interests to overspend. After booking off those vacation days and looking forward to some fun and relaxation, it was a real bummer to have to call that off. I decided that I still wanted to do something. I did some digging and found some cottages just a couple of hours from home with an unbelievable off-season rate. It has a full kitchen and free wifi! We could bring our own food and have three nights of relaxation and adventure for a fraction of what our original road trip was going to cost.

It’s one of those situations where, sure, that money could (and some would argue should) be put toward eliminating our debt. But I just can’t justify a life that is all work and no play.

So off to the cottage for the weekend we go. We’ll return happier, more relaxed, and ready to stay on target with that budget of ours. Because relaxation and quality time with your spouse? Priceless.