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

 

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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

Dealing with Financial Setbacks

 

taxes

I know, I know….it’s been a while since I’ve written. Normally that would be because we’re just plugging along, with nothing interesting to report. Unfortunately that hasn’t been the case here.

Sigh.

Remember my previous post about how (relatively) great things have been going? We’ve been sticking to the budget, bills were getting paid, and we were still squeaking out a little money here and there for date nights and such?

Well, I kind of feel like perhaps I was tempting the financial gods with that post. Just a couple of weeks after that, Todd and I sat down to do our taxes. I was feeling alright about it, to be honest. In previous years I’ve always gotten a refund of some kind (a couple of years I got fairly generous ones), and although I wasn’t expecting much, there was a tiny hope in the back of my mind that I would get even a teensy little something.

Um…yeah. Not so much. Turns out, I owe a big ole’ chunk of money to the government for taxes last year.

How’s that possible, you ask?

Well, Todd and I got married back in August, 2013. Prior to that, I was a single mom who was able to claim one of her kids as the equivalent to an unemployed spouse. This is a huge tax break. On top of that, I was also paying a fair bit into child care expenses, which is also a nice little tax break. What I didn’t realize was how much these two things added up to over the course of a year in terms of taxes.

Last year when I filed my 2013 taxes, I still received a bit of a refund. We didn’t get married until August, and so I was able to again, claim my daughter up until that time. We were also still paying for after school child care.

2014 comes and I don’t give my taxes a second thought. Our daughters stopped going to after school care and still, nothing clicked in my mind. And then suddenly…boom. It’s tax time.

<insert horror-movie-style-scream-here>

The end story is that we’ve got a fair bit of money that needs to be paid back to the government. On top of that, I have had my tax contributions adjusted for this year, which means that our monthly budget is getting squeezed just that much more, since I have a smaller take-home pay.

How has this affected our financial plans?

Well…our plan has taken a significant hit. I had a bit of money set aside that was going to be used to fully pay off one of our credit cards, which now needs to be used as a down payment on our tax bill. We’re still in the process of re-arranging and re-adjusting things to make up for both paying off this additional bill, as well as dealing with the lower pay amount.

While I’m in a better head space about this than I was initially, having had time to process it all, I’m still pretty bummed. I know we have no choice but to just keep pressing onwards, sticking to the (now-modified) plan and doing our best.

That’s all any of us really can do, isn’t it?

Until next time,

~Kelly

The Financial Long Game

financeIt’s fairly easy to understand why being financially responsible is something that many people struggle with. After all, we’re a pretty “instant” society. We want what we want, and we want it right now, dammit. I know that’s how Todd and I got to the place we are right now, financially. We made the choice — repeatedly — to live in the moment rather than with our eyes on the prize. We were totally playing the financial short game.

The thing about playing the financial long game is that it requires dedication and most of all, patience. Which can be a struggle for people who are really used to reaching for that instant gratification.

So….confession time, kids.

I’ve been struggling a little bit lately in terms of having patience with this whole process. I mean, we’re doing well. We’re sticking to our budget. We’re paying off bills, we’re building up savings. We’re being responsible with a bit of extra money that has come our way. We’re doing the right things, and it’s having the desired effect. Good for us, right? In fact, I actually did a little dance of joy just yesterday when a certain credit card bill came in and I checked the current balance. There are lots of positive things going on, which we’re feeling really great about.

On the flip side of that, though, I’ve found myself really struggling with a lot of financial temptations out there. That old mentality of “But I deserve this!” has come creeping in on more than one occasion. I find myself dreaming of moving to a bigger (and more expensive) place to live. I wonder if we can’t just go on that family vacation now and worry about the financial consequences later. I’ve been visiting some online shopping sites and tempting myself with things I know I don’t need and shouldn’t be spending money on. I’ve been grouchy about skimping on small things and have found myself indulging in Starbucks a little more often than I should.

We’re still sticking to our budget (with a couple of recent exceptions) and honestly, things are going well. The problem in all of this is my own current mindset. I’ve started losing sight of those long term goals. I’ve gotten impatient with how long this process is taking. Rather than being happy with how far we’ve come in a relatively short period of time, I’m focusing on how far we have yet to go.

Thankfully I have Todd to discuss these frustrations with and although he shares in them from time to time, he has been very good at reminding me of all the reasons why we’re doing this. Having full financial transparency means that I can’t indulge in a bunch of retail therapy to help get me past this hump, which is a good thing for me at the moment. I know that this is only a temporary phase that I’m struggling with, and that I’ll find a way to get my mind on the long game once again. But dang, I’m not going to lie. Some days, it is tough.

Does anyone else struggle with this from time to time? What do you do to get yourself past these “times of financial weakness”? Any tips for making it through?

Until next time,

~Kelly

The Day We Blew The Budget to Smithereens

untitled So, since planning and implementing our budget late last year, I’ve got to say that Todd and I have done a pretty dang good job of sticking within that budget. We stick to the budget that we have set for ourselves, and we even plan ahead for things coming up down the road (like birthdays, etc). So all in all, we’ve been feeling pretty good about things.

And with those good feelings, came a bit of complacency, methinks.

This past Saturday we did our usual grocery shopping. We split it up over several different locations, in order to ensure that we get the best deals going. We make stops at a local place called Gateway Meat Market (that always has at least one or two crazy insane cheap items — like this past week, broccoli for 17 cents per head!), sometimes Walmart, Costco, depending on what we need, with our last stop always being the actual grocery store itself.

This weekend we made stops at Gateway, Costco, and finally the grocery store. As we were at our last stop, pulling up to the cash register it hit me: we weren’t going to meet our budget this time.

And boy, was I ever right on that. In fact, not only did we end up being over, but we ended up being WAY over. So much over that we spent all of this week’s allotted grocery amount, and almost all of next week’s, too.

So how it in the blue hell did THAT happen?

Looking back there were lots of reasons for it. Many of these things could have been prevented, but again, my complacency led me down the wrong road.

1. This week is an irregular week.

Our youngest daughter turned 10 on Sunday and so this week we’re having a big birthday feast to celebrate. Our family tradition is that the birthday person gets to choose any meal they want. This year, Mo chose home made sushi. This is something we only usually make a couple of times year, just because it’s one of the more expensive meals when you consider all the extra things (like seafood) that need to be purchased. Still…it’s her once a year birthday request, so who am I to say she can’t have it?

2. I didn’t do a pre-shop inventory.
Usually, in order to stay on budget, I create a meal plan, which involves first taking stock of what we already have in the house. Last week was insanely busy at work, and I just didn’t have the time (or the energy) to go through my freezer and cupboards like I normally do. I went by memory, which means that — whoops! — I wasn’t sure what we did and didn’t have in the house already. This resulted in buying a lot of things we didn’t really need this week — rice vinegar, sushi rice, coffee cream…after I started putting things away at home, I realized that we’d bought a number of things that we didn’t really need to buy at all. Let’s just say we’ll be eating a whole lot of apples for the next little while. Sigh.

3. I strayed from my list.

One of the cardinal rules for staying on budget when grocery shopping is to make a list and stick to it. These past few months I’ve been pretty good with doing exactly that. But this week, I’ll admit, I fell into the trap of making a few extra purchases. “Oooooh! Look! Pork is on sale. I should pick up a couple of packages.” (Not on the list). “Wow! This giant package of Naan at Costco is a great deal!” (Also not on the list). “Let’s pick up some extra seafood for that chowder to make it extra delicious.” (Again, not an item that had been planned for). While unpacking all of our groceries I was able to see just how many extras we’d picked up. There were quite a few of them.

4. I shopped while I was hungry.

I know…I know. It’s one of those things that everyone knows, right? Never grocery shop when you’re hungry. Todd and I had been out running around all day, doing a ton of errands and other than some coffee and a gluten free muffin from the Farmer’s Market, I hadn’t eaten anything else all day. Big mistake. Shopping hungry likely had a lot to do with all those extras I slid into the cart (“Yum! Sweet potatoes!” “A little extra bacon won’t hurt…” “Gluten free cookies! Just what I need!”) So yeah. I can confirm that there’s a reason why “they” say don’t go shopping hungry.

So all of these factors worked together against me to result in a whopping grocery bill when all was said and done. Now, in the past, I would have simply shrugged, chalked it up to “life” and shopped again as usual the following week. Likely putting it on the credit card.

Well…not this time.

After a quick conversation, Todd and I decided how to handle this overage. Since we basically spent all of next week’s grocery money, the only thing we can do is not spend any more until next payday (March 13th). Of course, there’s still $13-ish left in our grocery budget (which is good, considering I forgot to pick up dish detergent — whoops!), which we are free to spend, but if there are any food purchases that are required over and above that amount, we are left with two choices:

1. Suck it up and make do; or

2. Find the money somewhere else (and by somewhere else, I mean not credit cards or our savings account).

So that’s the plan. The good news is that our house is basically crammed to almost overflowing with good food, so making it through the next couple of weeks theoretically shouldn’t be that challenging. Of course, I’m saying that two days after buying food.

I could be singing a whole other tune come March 11th or 12th.

Time will tell, I guess.

Until next time,

~Kelly

 

Reality Check

checkI think that those of us who go through life carrying a credit card balance (especially a large one) have kind of lost touch with our money. Credit cards seem to remove that connection we have with the price of things, and how much they actually end up costing us over the long term. Once things are charged on that card, it’s kind of easy to forget about the fact that they haven’t truly been paid for.

Todd and I got a bit of a reality check in this department recently.

This past week Bryan Adams played here in Halifax. He is one of Todd’s favourites; he’s seen him in concert more than once. We realized when the concert was first announced, months ago, that we would have to skip going this time around. Particularly since we just bought tickets to go see another concert this upcoming July. (Weird Al! Todd is over the moon excited about that one).

In any case, several people we know went to this concert and Todd and I got talking together about the last time we saw Bryan Adams in concert, three years ago. I surprised Todd at the last minute with concert tickets, since I knew how much he wanted to go. Of course I didn’t have the cash on hand, and so happily charged those tickets to my handy-dandy credit card. A card that I’m not proud to admit has been maxed to pretty close to its limit since then (give or take a few hundred dollars here and there).

As we talked about the concert we were missing vs. the concert that we’re attending in July, we were patting ourselves on the back a little bit for the fact that we paid for the upcoming concert ticket with CASH from our SAVINGS. This seemingly small thing feels like we’re definitely making progress in this whole financial department.

“You know, “ I pointed out, “we still actually haven’t officially paid for that concert we saw three years ago.”

Huh. It’s true though, isn’t it? Charging something on a credit card and not paying off the balance really isn’t paying for something, now is it? I’ll be honest, it was a bit of a wake up call to think about things on those terms. There have been plenty of things charged to that card over the last several years that I can’t even remember…things that still officially remain unpaid for. We’re spending thousands to dollars every year in interest, just making interest payments. On what? For the most part, I honestly can’t remember.

I’m left shaking my head at the thought of it.

I guess the good news is that we’re seen the light (Hallelujah!), we’ve made the necessary changes and we’re working on getting rid of this consumer debt once and for all. It’s going to take some more time, but soon we’ll be able to happily humblebrag about our financial situation, instead of cringe just a little bit when we think about it too long.

Until next time,

~Kelly