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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Under $20 Date Night

$20 I’ve been doing a lot of thinking lately about Todd and I don’t make a special effort to get out and go on dates like a) we used to and b) we definitely should. We spent a good part of the winter holed up like the rest of the Maritimes, which provided us with a convenient excuse for not going out much. Lately, we’ve sort of fallen into the trap of saying, “Oh, we can’t really afford to go out on dates”.

*cough* Bullcrap! *cough*

The truth is, it’s entirely possible to have dates and not spend a ton of money. After all, it’s about spending time with the one you love, more than how much money you spend on them, amiright? So I came up with the idea of the Under $20 Date Night. The challenge for Todd and I for the next while is to come up with fun, interesting dates for the two of us that cost less than $20. Simple, right? And lucky you, you guys are going to get to read all about our inexpensive dating adventures.

Well…the ‘G’ rated parts anyhow. HA!

A Little More About Those Combined Finances….

I’ve held joint bank accounts with a few different people that I’ve been in relationships with over the course of my life.

Full disclosure: My ex husband and I actually still share a joint bank account, that we use to transfer money to one another on occasion. I’m actually going to be closing that bank account down soon. I’ll be discussing my finances with my ex husband eventually, but that’s another blog post for another day.

(Man, when did life get so complicated??)

In any case, opening a joint bank account with Todd wasn’t that much of a big deal to me, since it was something that I’d done before. He and I actually previously had a savings account together, when we were saving up for the wedding, but after the wedding ended up shutting it down.

When we made the decision to combine finances, we decided that I would have Todd added to my bank account, and we would use that going forward for everything. I’m currently a happy banker with President’s Choice Financial, mainly for the lack of bank fees and the free groceries. Score!

He was actually a little nervous going in to get this done, since this was all new territory for him (our previous joint savings account notwithstanding). In fact, I daresay that he was more nervous about getting that joint bank account than getting married. This is all unchartered territory for my lovely husband, as he has never before had complete financial transparency with someone he was in a relationship with.

Dun…dun…duuuuuuuuuuuuuuuuuuun……………….

So that’s kind of big step. I mean, he’s been married before, for goodness’ sake, so he knows what that’s all about. But full financial transparency? THAT is the scary stuff. For both of us, really. Because now I’m no longer going to be able to hide the depths of my coffee addiction, or my thrift store shopping habits.

And truth be told, we actually had to sign more paperwork for that bank account than we did when got married.

What’s up with THAT? I guess when you stop to think about it, getting a divorce is actually a whole lot less complicated than untangling yourself financially from someone else. Still.

Until next time,

~Kelly

The Current Financial Situation

As part of our process of coming up with a financial plan, our first step was all about assessing our current financial situation.

Some people have asked where we are starting with this entire blog. Without getting too specific, just what is our financial situation? I mean, it’s all fine to sit back and say “we’re doing this to save money”, but what we suggest and what we actually do may not work for every family.

Without going into too many personal financial details, this is our starting point:

  1. Three credit cards between us and one outstanding loan. The total balance is under $10,000 with the smallest amount owing being $300.
  2. Monthly rent. We currently do not own a home and were not working towards buying one at this stage in our lives together. We decided that the possibility of affording travel with ourselves and our children would take priority over the need for owning our own house at this time. It’s a long-term goal, but not essential right now.
  3. A 2014 owned vehicle under warranty with monthly payment costs of under $375. There are added expenses with the car (fuel for the bi-weekly travels to visit my son, car insurance, oil changes, tire rotation, etc), but having a vehicle under warranty certainly helps should something go wrong.
  4. My wife’s oldest daughter is expecting to get braces at some point in early 2015.
  5. Child support for two children.
  6. I don’t have the best credit score in the world. I’ve got a 20-year history of the occasional bounced check, late payment, and a few collection call situations. I haven’t dug the biggest hole in the world, but I’m certainly not going to be approved for a loan any time soon.
  7. We both make decent money. While we’re not raking in the cash, we’re not starving, either.
  8. Weekly grocery expenses average around $200 due to having anywhere between 2 and 5 extra mouths to feed.

So this is where we currently stand. We’re not owing on a house, we don’t have thousands of dollars tied-up in student loans, and what we do owe is under $10K. When we finally had “the talk” with each other, we couldn’t understand how we were going paycheck to paycheck and barely scraping by. With the impending expense of braces on the horizon right after the holidays (which not only include presents for the family, but also a plane ticket for my 15-year old daughter from Ontario to Nova Scotia), we were both really concerned with our ability to stay afloat.

Yet after three weeks of planning and a couple of initial changes made, we’re already feeling better about our financial situation. We have a budget in place that we’re tackling in November. Already, one credit card has been paid off completely and a bank over-draft has been eliminated. We’re off to a good start.

I’m excited to see where our continued diligence takes us and, hopefully, share our impending success story with you. The ultimate goal for us is taking our family of six on a Florida vacation. The ultimate goal for our readers is to inspire and educate so that others can (a) learn from our mistakes and (b) also make positive financial changes in their own lives.

We’re not making a ton of money and we’re not spending a ton of money. We’re not cutting out all expenses and we’re not going to starve ourselves. We are going to make changes that we believe are smart and easily managed. We’ve set short-term goals that we believe are realistically attainable.

At the end of the day, we’re hoping you find this blog as useful as we do writing it.

–Todd

Getting Started

When the hubs and I made the decision to finally, finally get our finances in order, it took us some thinking about where to get started with it all. I mean, we’d been talking for a while about how we “need to get a better handle on things” but we hadn’t started making any real moves toward that. We were avoiding the inevitable, putting our heads in the sand about what was going on (as we both tend to do), while the debt kept creeping up ever so quietly. A silent stalker following us wherever we went.

Dramatic, I know. <insert eyeroll>

Seriously, though. Anyone who has ever dealt with any amount of credit card debt likely knows that feeling. The bill comes in. You take a look, your stomach drops a bit, and then you put it away and stop thinking about it. Next thing you know, you’re whipping it out again to pay for something else. You make your payments, maybe you even put a little extra on it some months, but you never really get ahead of the game.

My credit card debt (though small by some people’s standards, large by mine) grew thanks to some vacation extras, a Christmas (or two) and a couple of moves (me from my old apartment to the place we’re currently living, and Todd from his previous home a province away to live here with me and my girls).  Just like that. I kept telling myself that I’d get it paid off (or at least down) and it just never seemed to happen.

The biggest problem? I lacked a plan. A mistake that we’re not going to make this time around.

So the first thing we needed was a good solid plan for making all of this happen. So our plan came together like this:

1. Assess our current financial situation. Full disclosure: my husband of just over one year and I had never really sat down and put all of our financial “stuff” out on the table. Sure, we had a general idea of each others income and expenses, but we’d never really sat down and got into the full nitty-gritty. We knew that if we were going to make a financial plan together, this was our first step.

2. Set goals. We talked about what we hoped to accomplish with all of this. We knew that we had certain bills that needed to be paid off, and we want to get rid of all of our consumer debt. The ultimate goal, of course, is a Disney vacation with all four of our kids.

3. Combine finances. Prior to this, we always kept our finances separate. He took care of his things, I took care of mine, but we decided that the right thing for us would be to put everything together in one big pot of income vs. expenses and deal with it from there. Not ideal for everyone, I understand, but a good plan for us. Hopefully. I guess we’ll see as time goes on.

4. Create a budget. I’ve always had a loose monthly budget that I worked with, but I’m not sure that Todd necessarily did the same. We decided to use an excel budget template, modified to suit our own needs, to help us create our monthly budget.

5. Trim the budget where possible.

Once we took a look at the places where we were spending our money, we decided to realistically come up with ways that we could trim some of the extra, giving us more wiggle room every month so that a) we wouldn’t become slaves to the budget and b) we would have extra cash to put toward paying off those bills and building our savings more quickly.

6. Set the plan in motion.

A plan is nothing if you just sit on it without actually putting it into action. The plan is that November and December will be our months to ‘try out’ our new budget, but then starting January 1, we pull the trigger and hit the ground running.

Until next time,

Kelly.

We’re doing WHAT?

Lately I’ve been reading lots of blogs and articles about the extreme measures that some people are going to in the name of money. Limiting their food budget to a (small) set dollar amount. Not buying anything new for a set period of time. Not buying anything at all for a set period of time.

I applaud anyone who can limit themselves and live within those kind of strict boundaries. But I will straight up admit that I am not one of them. So in keeping with that, you won’t read about any extreme budgeting or money-saving ideas here on our humble little blog. You’ll see a family on the hunt to control their spending, reduce their debt, and build up a savings account. Woo. Our focus for the next several years is about building a solid, healthy financial life together, something that neither of us have really had firmly within our grasp before.

Basically we’re going to finally start acting like grown ups. Well…at least in this regard.

This is a journey of learning and discovery for myself and my family. We’ve invited you along for the ride as we figure out how to navigate through all of this and come out on the other side happier, more secure, and hopefully just a little bit wealthier.

We’re not financial gurus. We’re not highly disciplined people. We don’t earn buckets of money. This isn’t about us conducting an experiment or pretending that we’re poor for a set period of time. This is our life. The goals and strategies and struggles that you’ll read about here are very real. And all ours. Hopefully some of you will relate. And you know what? If you’ve got tips and tricks of your own to share, we’ll gladly accept them. This is very much a learning process for us.

There are no hard rules to this plan of ours. Only goals. Goals like buying less. Living frugally. Wasting less. Reducing our debt. Building savings. How we get there isn’t something that’s going to be fixed in a short period of time. It will take time and effort to achieve — and maintain — these goals. Because as you can see, there is no end date attached to any of this. We’re just regular people doing a pretty regular thing, really. But it seems to me like money is one of those subjects that a lot of people are hesitant to discuss. Money rules the world, really, and yet in a lot of ways we fear it. Or fear discussing it, anyhow.

Well not us. Not anymore.

 

‘Til next time,

Kelly.