Goal 35 – Create a budget for our family and stick to it.
One of the many things my parents taught me was to create a budget. This was one of the lessons they learned they hard way, and I’m sure they wanted to make sure that we (meaning my siblings and I) were not caught by the same traps they fell into along the way. I’m pretty sure I’ve never stuck with a budget for any longer than a month. In fact, I can be downright miserable when it comes to spending. When it comes to a spending vice, I never overspend on clothes or shoes or music. I always always spend on food, office supplies, or something for a craft I’ll never end up doing.
However, with the start of a new year and the start of my husband and I actually living together after extended periods of training and schooling, I decided I really wanted to give this budget thing a go. I know my mom will laugh, but I’ve found some really good ideas on Pinterest which have lined up with advice I’ve read in several library books over the years. Since I’ve had some expected difficulties finding a job in my part of Florida, I’ve decided that we had better start being smart with the money we have.
I started off by printing off Spencer’s spending habits for the past 3 months. In hindsight, although it was nice to see where the money had been going, it wasn’t entirely representative of our current spending habits. For instance, I can cook nice meals regularly. While I was gone, Spencer could choose between pasta, sandwich, or going out. I’m sure you can guess which was chosen. The reason I didn’t print off my account statements was because I am no longer making any money. I also knew, again, that most of the money I made babysitting in college went to food and drink. After printing them off, I divided all the expenses into categories with a different highlighter: blue for bills, yellow for eating out, pink for gas and groceries, orange for one time/infrequent expenses, and an underline with a sharpie for itunes purchases.
Knowing where our money went helped immensely with my second step. A while ago I found a blog which detailed the seven bank accounts everybody should have. The accounts are as follows: Emergency savings, family savings, family checking, husband checking, wife checking, retirement, and slush fund. Since we tend to burn through money if it sits in the account for too long, this seemed to be the best option for us. I did something similar in my freshman year of college when I realized I had pretty much burned through my entire savings account in a quarter. Dividing money and making sure I only have a debit card attached to one account is very helpful.
My first step was to allocate 5% each to the emergency fund and the regular savings fund. After I looked at all the numbers, I realized we are able to set 10% aside for each fund. For now at least, 20% of our income will be used to build our savings accounts. I then ran through each of our bills we needed to pay. That amount, which is steady every month, goes into our family checking account. Two of our bank accounts are a checking account for my husband and another for myself. My account gets used for grocery shopping, nails, clothing, and yoga (the excess of which goes to pay my student loans), and my husband’s account get used for oil changes, hair/uniform items, date nights, and all the music he likes to purchase on itunes (with the excess going to either a bill or savings). Our final two accounts will be our Thrift Savings Plan and our Roth IRA. I’ve heard many people wish they had started planning for retirement earlier, so I guess our early 20s is the perfect time to do it! Our slush fund isn’t actually a bank account. We have a jar that we’re contributing money to. This is totally another Pinterest idea, but we’ve decided to use cash more often (which helps us visualize how much we’ve spent) and then place all of our change and $5 bills into the jar. We’re using this to help save up for our trip to Iceland 🙂
This budget, of course, is always subject to change. For instance, I’m now tracking our loans using a free printable from The Nest Effect (and I’m using her 2013 calendar to keep track of our bills)! I’ll watch this for a while, and see what we should be contributing to our loans to pay them off more quickly. My first priority is still setting up a strong savings account. Hopefully, I’ll have a nice part time job at some point to help pay off my loans as well.
I can’t quite say I’ve completed this goal, because after making it we actually have to stick to it. I suppose I won’t know for a while if we’ve actually done it. For now, I’ll just say I’ve completed goal 35a – create a budget for our family.