When we lived in Cheyenne, Wyoming, we had zero debt. We owned both of our vehicles; we did not have credit cards, our phones were paid off, we were good.
Then we had a hail storm that totaled both vehicles. The hubby's car was already having issues, so we let the insurance company pay us the value and send it to auction. The van, on the other hand, was still going pretty strong. She had a few dents, but nothing aside from cosmetic issues.
Fast forward, half a year later, and she started having some exhaust problems. Being the fantastic mechanic that he is, my hubby and his friend fixed her up again. However, it was not long before her mileage kept climbing and our feelings of security while driving her started to diminish.
Lil Monster was still an infant, the hubs knew he was going to deploy soon, and I was planning a road trip back to North Carolina to visit family. That was when the hubs and I had a lengthy discussion about purchasing a new, or newer, vehicle. It was a stressful conversation. We had not had a car payment in so long; we wanted to make sure that whatever we chose to do we could afford it and still have the means to live as we had been.
That is a huge issue in relationships. Thankfully, it is one the hubby and I have not had problems with. We both agree on everything with our budget. Hubby and I are incredibly like-minded on many things, I know I am lucky there, and what we argue about is rarely of significance.
The hubby was also due for a promotion. We knew that, and we knew we could afford a vehicle, but we still didn't like the idea of paying an exorbitant monthly payment and going backward, to living paycheck to paycheck, again. So, we went to our bank, got a pre-approved amount with a monthly payment we could live with on his current paycheck, without stressing too much, and then did some online research and car shopping.
Two days later, I had my new-to-me Chrysler Town and Country mini-van with a reasonable amount of miles and a pre-owned limited warranty. Also, a monthly car payment.
I was not thrilled with the car payment. Though, who is excited about any bill? I was even less happy about having to pay more in car insurance for full coverage. That is a little catch most people tend to forget about when purchasing a new car.
A few years later, we ended up with a credit card. Mostly because of the low-interest rates, and the whole "we will ONLY use it for emergencies and things we can pay off the next month." Yea that didn't happen.
A year later, we found out we were coming to Alaska. With higher insurance rates, cost of living is more expensive, and the cost of making the trip ourselves, we were feeling the money burn. Granted, we had planned and saved for the trip. We knew we would get reimbursed for travel, so it was not too bad.
Moving up here, we realized a four-wheel drive vehicle, and just a second vehicle, in general, was necessary. So we decided to buy the hubby a pick-up truck. Nothing fancy, and it is a good little truck. However, it was another monthly payment we did not really want. It was about half the payment of the van, it all adds up in the end though. Our goals to pay off our debt was starting to seem distant.
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| Alaska State Bird Caution Sign |
We have not been uncomfortable. That is a plus. We have become less thrifty with our spending, regrettably. Savings has been almost nonexistent.
The hubby was looking forward to another promotion and not looking forward to another deployment. It was a rough deployment this time; numerous things occurred that we had no control over which made the already difficult separation even more unbearable. By the time the hubs came home, our family of five was drained emotionally. Every deployment is different, and boy this one was. We are not even sure what made it so, this time he was in an area with a lot less stress, but it was hard nonetheless. Add in the death of a family member and my anxiety, and it was just a terrible seven months for us.
We know we will not be in Alaska forever. We know now that we will probably be moving in about a year. I think that is the fire that got us to revert to our thriftier ways and solidify our debt-free plan.
So, here we are. Taxes were done, we have a good idea of what our budget looks like every month, now we just need to tackle the bigger bills.
If someone were to ask me if I preferred my hubs to stay home for those seven months or to get the tax-free income, I would say I wanted him home those months, no question. We cannot change what was, so we appreciate this "silver-lining."
I woke up this morning to a pleasant surprise: our taxes were already in our account. What was the first thing I did? I paid off both vehicles. That took a good chunk out of our taxes, but it is well worth it in the long run. Next, I am going to pay off what we owe on our phones. It is a little bill, but still something that adds up over time. Later on this evening, the hubs and I are going to sit down and plan our attack on the single credit card and what our plan for the remainder will be.
Every year we have a routine with our tax return, based on the amount and what plans we have for it. We check to see if there are any critical needs first. Do the kids NEED anything? Are the cars in good shape? Do we NEED anything? Do the animals NEED anything? Can we pay off a little bill? Can we pay off a big bill? How much do we want to put in savings? What's left? Then we give the kids a "tax allowance" that they can spend on anything they wish. We are doing the same this year, albeit in a different order. We knew we were going to pay off the cars, phones, and pay down the credit card. We could pay off the credit card but decided at the last minute to pay off half, then put the rest towards savings, the kids, and fun stuff.
It is a relief to pay off the debt entirely, but we know us. If we did not do something for ourselves to celebrate surviving another deployment, we would be penny-pinching from overspending on junk again in no time. It is relieving to know that with the extra money every month from the car payments we will be able to pay off the credit card in no time. It is not used very often, and I rarely carry it with me when I do the shopping. I use it more for the kid's homeschool stuff, purchasing glasses for Lil Monster and myself, also to help with my book business. I dislike credit cards, but when building credit, they seem to be necessary. We would like to buy a house in the future, and revolving credit appears to be the name of the game these days.
How are we getting back on track with our budget? First, we are setting up our monthly and bi-monthly bills into an excel spreadsheet. There are so many out there that you can customize, for free or a small fee. I like excel because you can add or delete whatever you need. I love the freedom to set up a budget that fits OUR family perfectly. For example, now I can completely erase the car payments and adjust our savings and other bills easily. Saving receipts and checking your bank account every evening to make sure all is equaling out is key.
You would be surprised at how often you exclaim "Where is all of this money going?" However, you do, all of those little purchases at the gas station or convenience store add up. Impulse buys take a considerable toll on the average family. You will nickel and dime yourself off your budget quickly if you are not keeping a close eye on where your pennies are going.
Priorities first.
Set up your budget. Make sure you have a column for your "normal" paycheck and bills. Then have another column for your actual finances for that period. We all know that bills change by a few cents or dollars occasionally.
Next, allow an area for long-term monthly bills. Car payments, insurance, mortgage/rent, other loans, and so on.
Third, make sure you have a grocery section. This should include enough rows for your major and minor shopping trips. I like to have a row for each store I frequent, that way I know exactly how much I spend at a particular store. If you are just starting a monthly budget, allow for some wiggle room with groceries. Try to shop normally for a few pay periods, then see what you average comfortably before setting a finite budget amount. Remember: some months can be more or less than others. Birthdays, anniversaries, holidays, these can all seem to jump out at you suddenly, and you feel like you have blown your budget. If you have a plan for these events ahead of time, you will be fine.
A vehicle or transportation area. This can include how much you spend on gasoline, cab fares, uber, train, bus, oil changes, tires, and emergencies. To keep this section neat and tidy, set up a new budget for each month of the year, "normal" amount sections filled in only, and add in scheduled routine maintenance to the months necessary. You will not forget when the time comes for those pesky extras, and you can plan accordingly.
Another section for school items, work items, pet needs (that don't fall under the grocery section), and other purchases you make monthly. This changes based on your family's needs. We homeschool so we do not pay as much for school clothes. We do, however, pay more for supplies. Our pencils run away regularly. Markers get dried out. I forgot that I purchased a ton of notebook paper on clearance and, for whatever reason, felt compelled to buy more. Same with composition notebooks.
Finally, an entertainment section. I feel this section is extremely important and where several families often splurge the most. Set up a row for those times you made a drive-by at the fast food place on your way to an appointment, or a game. Another for when you all decided to go to the movies, or out to dinner. Also, this is vital if you can manage it, a section for fun money. This can be budgeted based on how your bills are looking that month. To keep yourself on track, agree with your spouse or family on an amount and pull that out in cash. For us, it is money the hubs and I keep in our wallets. Note the amount in your budget, and that is your impulse money for that pay period. Instead of going to the gas station for a drink or snack and whipping out your debit card, pay in cash. This will keep you from being tempted to buy more than you can afford. Your budget will thank you.
What does budgeting come down to? Willpower.
Trust me, I know it can be hard to stick to something when a sale is going on, or you just remembered something you "need." Chances are, if you need it, you can budget for it during the next pay period. Don't blow your budget! Stick to it, as closely as you can. Stuff comes up that you cannot control, and that can throw a wrench in things. However, if you are doing what you can to stick to your monthly goals, you are already doing better than others.
These plans do not work for everyone. I have been in the position of looking at my bill to income ratio and wondering what happened. I hate the saying "robbing Peter to pay Paul," but it is true. That is one of my biggest reasons for disliking credit cards as much as I do. They appear to be a solution to an immediate problem, and they are not. If this is you, please try to pay off and cut up all of the unnecessary ones. Keep one, maybe two depending on your needs, and leave it at that. Yes, credit cards can help build credit, but they can hurt your credit faster. Unless you are a devout credit card payer and pay them off as soon as you can, that is awesome! Unfortunately, the same isn't true for so many. I cannot count the number of families I have met that have mentioned the seemingly never-ending credit card payments. I feel their pain, I have been through it, and I certainly don't miss it.
Sometimes I look forward to the pre-approved credit card envelopes in the mail. They make pretty confetti. Even better, they are great firestarters. I also have guinea pigs that need liners under their bedding. Hashtag recycle!
Aside from the budget itself, what else can you do to keep yourself on track financially? Menu plan! I will go into greater detail with this later, and a fantastic website that makes this so much easier. I cannot express how helpful menu planning is enough.
If you are interested in a copy of our budget, let me know. I will be more than happy to post it!
Shop the sales when you can, and can afford to, menu plan, don't be afraid to alter your budget if you must and remember: you are moving towards the ultimate goal of giving your debt the boot!
How are we getting back on track with our budget? First, we are setting up our monthly and bi-monthly bills into an excel spreadsheet. There are so many out there that you can customize, for free or a small fee. I like excel because you can add or delete whatever you need. I love the freedom to set up a budget that fits OUR family perfectly. For example, now I can completely erase the car payments and adjust our savings and other bills easily. Saving receipts and checking your bank account every evening to make sure all is equaling out is key.
You would be surprised at how often you exclaim "Where is all of this money going?" However, you do, all of those little purchases at the gas station or convenience store add up. Impulse buys take a considerable toll on the average family. You will nickel and dime yourself off your budget quickly if you are not keeping a close eye on where your pennies are going.
Priorities first.
Set up your budget. Make sure you have a column for your "normal" paycheck and bills. Then have another column for your actual finances for that period. We all know that bills change by a few cents or dollars occasionally.
Next, allow an area for long-term monthly bills. Car payments, insurance, mortgage/rent, other loans, and so on.
Third, make sure you have a grocery section. This should include enough rows for your major and minor shopping trips. I like to have a row for each store I frequent, that way I know exactly how much I spend at a particular store. If you are just starting a monthly budget, allow for some wiggle room with groceries. Try to shop normally for a few pay periods, then see what you average comfortably before setting a finite budget amount. Remember: some months can be more or less than others. Birthdays, anniversaries, holidays, these can all seem to jump out at you suddenly, and you feel like you have blown your budget. If you have a plan for these events ahead of time, you will be fine.
A vehicle or transportation area. This can include how much you spend on gasoline, cab fares, uber, train, bus, oil changes, tires, and emergencies. To keep this section neat and tidy, set up a new budget for each month of the year, "normal" amount sections filled in only, and add in scheduled routine maintenance to the months necessary. You will not forget when the time comes for those pesky extras, and you can plan accordingly.
Another section for school items, work items, pet needs (that don't fall under the grocery section), and other purchases you make monthly. This changes based on your family's needs. We homeschool so we do not pay as much for school clothes. We do, however, pay more for supplies. Our pencils run away regularly. Markers get dried out. I forgot that I purchased a ton of notebook paper on clearance and, for whatever reason, felt compelled to buy more. Same with composition notebooks.
Finally, an entertainment section. I feel this section is extremely important and where several families often splurge the most. Set up a row for those times you made a drive-by at the fast food place on your way to an appointment, or a game. Another for when you all decided to go to the movies, or out to dinner. Also, this is vital if you can manage it, a section for fun money. This can be budgeted based on how your bills are looking that month. To keep yourself on track, agree with your spouse or family on an amount and pull that out in cash. For us, it is money the hubs and I keep in our wallets. Note the amount in your budget, and that is your impulse money for that pay period. Instead of going to the gas station for a drink or snack and whipping out your debit card, pay in cash. This will keep you from being tempted to buy more than you can afford. Your budget will thank you.
What does budgeting come down to? Willpower.
Trust me, I know it can be hard to stick to something when a sale is going on, or you just remembered something you "need." Chances are, if you need it, you can budget for it during the next pay period. Don't blow your budget! Stick to it, as closely as you can. Stuff comes up that you cannot control, and that can throw a wrench in things. However, if you are doing what you can to stick to your monthly goals, you are already doing better than others.
These plans do not work for everyone. I have been in the position of looking at my bill to income ratio and wondering what happened. I hate the saying "robbing Peter to pay Paul," but it is true. That is one of my biggest reasons for disliking credit cards as much as I do. They appear to be a solution to an immediate problem, and they are not. If this is you, please try to pay off and cut up all of the unnecessary ones. Keep one, maybe two depending on your needs, and leave it at that. Yes, credit cards can help build credit, but they can hurt your credit faster. Unless you are a devout credit card payer and pay them off as soon as you can, that is awesome! Unfortunately, the same isn't true for so many. I cannot count the number of families I have met that have mentioned the seemingly never-ending credit card payments. I feel their pain, I have been through it, and I certainly don't miss it.
Sometimes I look forward to the pre-approved credit card envelopes in the mail. They make pretty confetti. Even better, they are great firestarters. I also have guinea pigs that need liners under their bedding. Hashtag recycle!
Aside from the budget itself, what else can you do to keep yourself on track financially? Menu plan! I will go into greater detail with this later, and a fantastic website that makes this so much easier. I cannot express how helpful menu planning is enough.
If you are interested in a copy of our budget, let me know. I will be more than happy to post it!
Shop the sales when you can, and can afford to, menu plan, don't be afraid to alter your budget if you must and remember: you are moving towards the ultimate goal of giving your debt the boot!
Disclaimer:
*I am not a financial advisor, nor do I proclaim to be one. This is an insight into what works for our family and may not be the right fit for yours. I have done a lot of research on saving money and budgeting. I have accumulated several tips and tricks over the years to help our family stay out of financial trouble. I am a great listener and observer with friends and family. I keep an open ear to things that work and don't and then try to see how they will suit our needs.*
