Budget, budget, budget.
For Jon and I having a budget is one of the most important things when it comes to saving money and living within our means. Sometimes the budget feels restrictive becuase it tells us the things we cannot afford. But most of the time I feel like my budget is freeing.
Does that sound wierd? Well it is freeing because without my budget I wouldn't know if I could afford to go out to dinner an extra time this month. I wouldn't know what bills were due, how much I usually pay on them, what I needed money for, etc. But because I have a budget I can see that yes I planned to spend $xxx on electric this month but hey it was a warm month and that means my electric bill is going to be lower. That means I have extra money. And that can either go into savings or we can do something fun with it.
During the majority of the year Jon and I have salaries so we know how much we will make each month. Neither of us is payed hourly so our paychecks are always the same. During the summer Jon gets a little more in his paycheck becuase they only take out insurance during the school year, and his summer teaching job is hourly. However his hours are garunteed so we know exactly how much he will make each week for the whole summer. Becuase of this it is easy then to sit down and figure out how much we can spend each month.
I use Quicken to manage my bills which I love. I keep a seperate file for our checking and savings accounts as well as for each of our credit cards (I have one, Jon has one and we have a few store cards that we use to get extra savings). Paying off credit cards is extremly important to us and we never carry a balance. so having the file that says how much I owe on each card is also important. We use the cards to buy things that are in our budget, and by using the cards we build credit as well as earn freebies (for me it is points on Amazon and for Jon it is money to use at REI).
When I first started staying at home, and even before that, we did not have a budget. We were not huge spenders and never spent more than we could afford but we also never seemed to really get ahead at all. Once we sat down, okay once I sat down and figured out a budget we were better able to save. Sometimes it feels wierd that Jon earns the bigger paycheck and I technically spend it all. BUT it is not like that at all. I am better with organization and so managing our accounts and paying bills is something that I do well. Jon on the other hand is not as organized and while he could do a competent job of paying the bills on time it woudn't be as smooth sailing as it is when I do it. Plus since he works all day this is something that I can do to help our family.
There are some non-negotiables in the budget- mortgage (tried to get it lower and failed), insurance (I do shop around each year for the best rate but it is a must have) for cars and home, heat/electricity, water are all things we must have. Groceries are a must but this is the area that I try to watch the most. I also budget for gas for the cars, car repair, home repair (usually this goes into savings since we don't repair something every month), clothes for all of us, babysitting the night I work and Jon has class, entertainment money (so we can go out at least once a month), mad money for Jon and I, gifts that need to be bought, money to go to savings, etc. Just this year we had to begin budgeting for college courses again after not needing that money since I graduated. Jon started his masters (I am so happy for him!) and we are going to be paying for that each semester for the next five years. And in the fall I need to readjust to make room for Madeline's preschool tuition (its there just not sure where yet). This means that some areas need to be cut back, but that is okay. Right now my plan is that we will not hire a babysitter in the evening, rather I will work on days that Jon does not have class. That will save us about $50 a week which is almost exactly what I need for preschool tuition. The other option is for me to work more hours and for Jon to take on another job. So far we have avioded that and hopefully with careful planning will continue to avoid doing so.
For Jon and I knowing where our money is supposed to go and comparing it to where it actually goes is important for us if we want to continue to live on one income. It has been trial and error each year and we adjust the budget as it needs to be adjusted. Taking from one area to make sure another is paid for. But doing so ensures us that we can build a healthy savings account and continue to live debt free.
Do you have a budget? How does it work for you?