Tuesday, December 29, 2009

The Need to Save

We need to save money. In this house we live within our means. By that I mean that the credit card bill is paid in full each month (a must for us) and all other bills are paid as well. However even though I have a budget it is not often I have enough left over for savings. I am supposed to put away a set month each month. However, it is more like every other month and about half of the monthly goal at that which actually gets saved. I often say to Jon "all the bills are paid but we didn't save this month." or the one I hate more "all the bills are paid and I had to borrow from savings until your next paycheck." And more often than not the savings does get returned after the next paycheck comes, but it is far from reaching my savings goal.

In August we begin paying preschool tuition (yikes!) and even though the addition we are expecting in June will not cost much in the beginning (thanks to cloth diapers, nursing and hand me downs) there is a point where the little one will require things that are bought. And then our budget will being to squeak.

So I need to rework my budget and actually stick to it for once. We are not big spenders by any means, for instance Jon wants a projector and screen for the new playroom. This is something which is extremely extravagent in my mind and he agrees. Therefore it is not in the household budget. Rather he is collecting his weekly money (I really hate the word allowance for adults) as well as all overtime he works (he gets paid when he subs during his prep time at school) and gift money until he has enough.

To explain the weekly money- when I began staying home we decided together that we would each be alloted a specific amount each week as mad money, use it for anything you want (mine is usually shoes that I don't need but want, a spa day or a girl's night out while Jon tends to save up for larger items like his Wii or the projector he now wants and the occasional guys night out) without worry about the budget. Some people find this arrangement odd but it works for us and feels very fair. Together we designate what is household expenses (nights out together, activities as a family as well as the regular bills) and what is not.

Back to the budget- I have followed all the advice when it comes to writing one. Start with the non-negotiables like mortgage, insurance, heat, groceries, etc. See if you can trim any of them by switching companies, finding lower rates, etc. This has been done to the extreme. But what throws us off is holidays, school tuition (Jon's masters) and other little things. I even tried using excel to track our actual spending versus our budgeted spending. It didn't help becuase I wasn't dedicated enough and I don't think I involved Jon enough.

I am working on a new plan. This one (hopefully to begin by mid-January at the latest) will involve also setting aside at least half of Madeline's monthly tuition now so it is not such a shock to the system come September. Currently the bulk of our savings comes from tax returns. We use this for large house projects and also just to bulk up our savings. However I really want to allot a specific amount each month from our paychecks to go to savings regardless of what comes out for house projects.

Join me on my journey into better budgeting!

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