I never know how or when to talk about money. Does anyone? That being said, money is a major part of everyone’s life, for good or evil (or both).
So, budgeting. I did not know much about personal finance or budgets until I met my husband. At the time, I was paying the minimum balance on both my credit card and student loan. I was living the life I thought I could afford, in an expensive city. I indulged in meals out, travel, clothes and shoes. I didn’t have a very affluent upbringing, so I took pride in my life as a working woman. I liked making my own money and paying my own way. But truthfully, I couldn’t afford my lifestyle. Hubby-to-be pointed out that I should be paying down my debt and building up a cushion of savings, and he was right. I bought a Suze Orman book and took some of her advice. I paid off my student loan and my credit card bill in one year by making smart choices and most importantly, by tracking every cent I spent. I did this on paper, as my expenses were not very complicated. The next year, I built a six month emergency fund. I got a raise, so I transferred that money to the fund, and I also saved, although less.
These experience sort of sucked at the time (shopping was banned, and not a lot of fun meals with friends happened), but it was ultimately liberating and showed me I could manage my money effectively. Since my husband and I have gotten married, we’ve had various joint savings goals at various times, usually to pay down debt or pay for IF. However, we have tracked our expenses carefully, just without a strict budget.
Until 2016. For the next two years, if all goes well, we will be working to build up a cushion that will allow for some financial freedom. It’s not a crazy goal, like apparently some bloggers commit to, but it’s not insignificant either.
(And a note is needed here about how privileged and lucky we are to be in good jobs, and how those jobs enable us to be in a position to save now. Those jobs, plus our education, choices and family backgrounds all allow us to do this. I would never presume to think those who are disadvantaged / living hand-to-mouth can “just” live frugally and budget.)
The Budget: We use Mint to track our expenses. This month we checked in each week (and sometimes even every day) where we were within each category, and adjusted spending accordingly. We had a problem right away – both cars broke down the same day within 20 minutes (REALLY?!) and that hurt. We had to shift money from groceries to miscellaneous, then delay purchases of some useful items until next month. But there was something empowering about doing this – skipping a purchase, changing plans. We renegotiated contracts we had with cable and phone providers to allow for more savings.
There’s a Nora Ephron quote I love. It’s overused, but I strive to live it everyday, whether at work, parenting, with family or friends.
“Above all, be the heroine of your life, not the victim.”
I love budgeting, because it allows me to enact this in some small way. At the end of this month, even with the car problems, we stayed within budget and we saved the desired monthly amount.
This is where I ask you, readers, to share any budgeting, or even savings tips you have. And, if you are looking for personal finance tips, there’s no better resource I’ve found lately than the very smart women at Grumpy Rumblings.
Do you like budgets? How do you stay within budget, and what kind of tools do you use? Do you budget only when you have a saving goal?