Wednesday, April 23, 2014

Budgeting 101: Setting Goals + Your First Budget

Before I jump into today's post I want to say a couple things that I should have said in my first post—budgeting does not mean you're poor. Budgeting does not mean that you can't ever do anything fun again. It does mean, you want your money to work for you. It does mean that you can have fun and not feel guilty or worried that you've over spent.  Also, Tim and I prescribe to a line of thinking that is sort of a cross between Dave Ramsey and You Need A Budget (YNAB). I'm not going to go into the details of their methods, but I encourage you to check them out!


Now that you know what you already spend, it's time to set some goals. Take some time to reflect on what you want to achieve.

Do you want build up an emergency fund? Pay off your debts? Cut back your spending in one or two areas? Take a vacation? The most important part of this step is to make sure it's a measurable goal—by this I mean you need to know the dollar amount you are trying to reach, and possibly the date you want reach it. Write them down and talk about them with your partner, then together prioritize them. Prioritizing your goals and being realistic are also key. One thing I've learned over the last 8 months, is that denying yourself something you really want until you've saved up enough cash for it, feels so, so, sooo good! Delayed gratification is where it's at—no guilt, only the joy of having something you've worked hard to get.

Tim and I focus all of our attention on one goal at a time.  We quickly learned that we could achieve our goals faster by focusing on one at a time, rather than throwing small amounts of money across the board. Don't feel bad if you have to reevaluate your goals a couple months later. Life happens, and we need to adjust our financial goals accordingly.

Once you know what you're already spending and what your goals are, you can start working on your first budget. I'm going to break it way down, and explain one task at a time.

Step 1: Decide Where You're Going To Track Your Income and Your Spending
Until I discovered YNAB, which I LOVE and recommend to everyone, we wrote our budget out on paper every month, which I hated and would never recommend. You could also easily set-up an excel spreadsheet, or probably even download one somewhere online.
Step 2: Name Your Master Categories and Your Line Items.
This step should be relatively easy, since you should have most of your spending already categorized from when you figured out how much you spend. There is no right or wrong, have as many or as few categories and line items as you want.
Currently in YNAB, we have 6 master categories:
Monthly Bills
Everyday Expenses
Rainy Day Funds (these are once in awhile type expenses such as medical, home maintenance, Christmas etc.)
Savings Goals (this is where we track our savings towards things like a new car, vacation or big house projects.)
Our master categories are then broken down into more specific line items, which is where you assign dollar amounts. For instance, our 'Everyday Expenses' breaks down like this: 
Stella and Rosalie (Anything that is purchased for the girls, clothes, diapers etc.)
T. Fun Money (We give ourselves $20 per week. We can spend it on whatever we want. No judgements!)
J. Fun Money
Family Fun Money (This is where we budget for family outings like the zoo, trips for ice cream in the summer)
Restaurants (Generally this is for family meals only. If I want fast food on the way home from grocery shopping, or Tim wants to eat lunch out, we use our personal fun money for that.)
Hair Care
Date Night
Misc. or Unforeseen (This money is used to cover anything unexpected that comes up, and sometimes it's used to cover over spending in other categories)
If you're unsure if something should be it's own line item, try it out for a month or two. My opinion is it's better to start out with too many categories and then condense them a couple months down the road, once you're in your groove. For example, we used to have a line item called 'clothing' which was where we budgeted for clothes for everyone. But, after a couple of months we deleted it and started assigning clothing purchases to either 'Stella and Rosalie' if it was clothing for either of the girls, or  'Misc. Unforeseen' if it was something that was NEED for me or Tim. Any nonessential clothing purchases, come out of our personal fun money.
Step 3: Calculate Your Income
This step can be a little tricky, if you're income fluctuates month to month, or week to week. If that's you, it might be best/easiest if you follow the YNAB line of thinking, which is "assign jobs, only to the money you have on hand." Meaning, you won't work out your whole month's budget at one time, you'll budget your money as it comes. You can check out the YNAB blog for more info on budgeting a fluctuating income.

Tim is salaried, and is paid weekly, so his income is super easy to predict. I have been babysitting, working at a before and after school program and doing a little bit of freelance work. Since my income fluctuates, I normally low ball my predicted income and add it to Tim's monthly income. That's how I come up with the number of dollars that need to be assigned a job in our budget.

Once all of our debts are paid off, we'll build our buffer up to cover one month's expenses, so that we can live off the last month's income for the entire month. We're getting a taste of what that's like now, because we keep our "new car fund" money in our checking account. It's a glorious feeling, and has been a great way to keep us encouraged to continue to be intentional and frugal with our money.
 Next week I'll cover Step 4: Give Every Dollar a Job and Step 5: Go With The Flow.

As always, if you have questions or want to add to the discussion, leave a comment here on the blog, or on our Facebook page. We love hearing from you!

Thursday, April 17, 2014

Budgeting 101: Where To Begin

Tim and I have been budgeting intentionally since September. I say intentionally, because before then we had been budgeting for our bills, but any income beyond that was one big slush fund. The leftover money didn't have a purpose, it was just sitting there, waiting for me to spend it on clothes for the girls and dinners out. Not going into savings, or paying extra on our debts. Now every dollar that comes into our home has a job.

People, budgeting works!

I got the idea to start sharing more about budgeting, when my husband suggested that I could probably make money by helping other families with their budgets. Now, I don't have nearly the amount of confidence in my budgeting/frugality knowledge as he apparently does, but I have learned a thing or two and I do feel like we've made some good progress.

Over the last 7 months, we built up a $1,000 emergency fund and we've paid off approximately $7,000 of our debt! This was a combination of credit card debt, both mine and Tim's student loans, money we owed my parents for the beef we bought last fall, mine and Rosalie's hospital bills. We have gone from having 6 debt line items in our budget to just 2! However, I feel like I should disclose, we were able to payoff 2 of those debts because of tax return.

So, what's the first step in setting up a household budget? Knowing what you already spend. You can figure this out one of two ways.
1. If you mostly use a debit/credit card, pull up your last bank statement, either online or your paper copy. Go through each charge a categorize it (ex. bills, groceries, eating out, diapers/wipes, kids, entertainment) and then add up each individual category.

2. If you mostly use cash for purchases, then spend one month keeping receipts and writing down every dollar you spend. Categorize your purchases, and then total each category.
Knowing what you already spend will help you figure out what categories you could potentially cut back, and where you should you focus your attention. Most importantly though, it will help you set-up a realistic budget. A realistic budget is much easier to stick to, then an "ideal budget" where you under estimate how much you spend each month on Biggby, eating out or buying clothes for your girls who already have full closets. No, I'm not talking about myself there...oh wait, yes I am.

It's my belief, that an unrealistic budget and trying to cut too much too soon, is what kills most household budgets. The race to successful debt elimination, budgeting and frugality is not a sprint, it's a marathon. Occasionally, I have to remind myself of that too.

Coming up next week: Setting Goals and Your First Budget

Sunday, April 13, 2014

Kitchen Before & Afters

Big news, Matt bought a house. It was a big accomplishment for him and I couldn't be more proud. Responsible, hardworking, selfless, realistic men are hard to come by these days. To bad he's already mine. Better yet he asked Ruthie & I to move in with him after the purchase. After much discussion, we accepted, and we are now all settling into our new home. :)

Ignore that ugly white stuff and just look at that blue house and that big smile on that new homeowners face.

Matt's slowly but surely realizing that a woman gets what a woman wants ;) JUST KIDDING. We work pretty good as a team but, he is finding out that a woman's opinion is often the better one. JUST KIDDING......but really. Haha, alright seriously though, this house is already 100% less bach pad than the house he lived in before, which I think he likes as he says "this finally feels like home" and "you did an awesome job on the colors and picking stuff out." Why thank you Matt.

We are getting the house decorated and together little by little. I am trying to do it that way so I don't rush into any regrets. The house was a little rough in areas but pretty much a clean slate. It definitely  needed a good cleaning and coat of paint and I must say that did wonders for it. Of course we have a large list (really it's written out in priority order) of hopes and dreams and wants and goals that we will work on as we go. But to start, we chose to do the things that would have the most impact.

SOOooooOOOooo..... I thought I would share! One room at a time so don't get too excited. Kitchen is first. Before and ya go!

So you see on the left how all the the cupboards are different? Mismatching wood, mismatching colors, missing cupboards. That was fixed by the painting them all white to match. (with the help of friends and fam) Six coats of white later and new matching fixtures they look like they belong together! The missing cabinets that were ripped out by the previous owner were replaced with open shelving to hold our dishes.

That little hole where this little cart is marvelously filling up space is where a dishwasher is supposed to go. But, why buy one of those when you have two hands........aka I really want one but I'll keep telling myself I don't mind doing them. Besides, Matt and I take turns and the cart is cuter than a dishwasher anyway. It's, yet again, another Ikea score. I love this little thing and it works perfectly for all our produce that would normally sit on the counter. It has holes on the bottom so the onions peels fall out and I can simply wheel it out and sweep. If we ever do get a dishwasher I can think of a million other places to use this, so no teal cart is left behind. I'm thinking about getting one for roos art stuff or other toys. Or even one for my craft stuff or cleaning stuff or make up stuff.... I don't like that cart at all. 

Sorry for the dark pictures but here is a look into the dining room. Thank goodness those hardwood floors were already there and in great condition (although they do suck to keep clean! Advice would be appreciated.) We switched the "I'm stuck in the 80's and covered in 10 layers of dust" lighting and Matt worked some magic on some lights I brought home from Ikea that I failed to read the instructions for and realized they wouldn't work in our space. That's what handy men are for.  The curtains are also a score from Ikea and that awesome wine rack was made by Matt's Grandpa. I love it over our dining room table. Now more wine and four more wine glasses.

 We decided to stick with a light gray to help open up the space and keep it light and fresh (my words not Matt's, don't worry). I then added color in other areas. That's kind of my style. Plain colors on the wall and pops of color everywhere else, like that rug from UO, our yellow dishes, lime green Kitchen Aid, and other things.

Adding little touches as well with curtain holders and this little storage thing for keys and such. 

Well that's the Kitchen. Of course there are things we would like to do long term in here, but for now it was a pretty big change and we are happy with it. Stay tuned for more room reveals. I think Ruthie's room is next. :)


Wednesday, April 2, 2014


Maybe you've wondered if going over my $50 dollar grocery budget, effects the next week's shopping trip, or if it effects our overall household budget? Answer—Yes and yes.

It most definitely my grocery budget. Most of the time, I'm only over or under by a few dollars, and at the end of the month, things balance themselves out. But once in a great while, I'll end up fairly short of my $50.

Let's use March for an example—Tim did my grocery shopping one week and went $25 over budget, I had another trip that I went over by a few dollars, and we made an extra trip to pick up a couple of odds and ends. I usually include an extra $25 in our household budget for things such as those, but even with that I was coming up short of the $50. For my last March grocery shopping trip, I was left with $31.80.

Another option would have been to adjust our overall household budget to make up the difference. But, an unusually expensive date night at the beginning of the month, a large propane bill, and a mama who got a little carried away buying some new home decor stuff made that option not really feasible.

This is what $31.80 worth of groceries looks like.
I was actually really surprised at how much I was able to get. I decided to load up on produce for a couple reasons. One, we can snack on it and it can be used to make meals. Two, I was really close to earning one of my Mperk Personal Rewards. I had to make sure I bought lunch meat and bread. I found a bag of clearance coffee, so I made sure I snagged that too.

Tuesday, April 1, 2014

Spice Up Your Date Night

Tim and I don't go out on dates nearly enough. I think they're really important for marriages, but we rarely seem to make the time or the effort. But that's another post.

When we do go out, once in awhile it's fun to change things up by meeting each other at the restaurant, movies, or where ever it is we're headed. When we lived in Chicago, it was super easy because we'd just meet up after work and we took public transit, so we always went home together. Here in Michigan it's a little trickier, now we only do it when we're meeting some where in Grand Rapids after Tim gets out of work. The only crappy part is, we have to drive home separately.

It sounds strange but even after you've been married for years, when you're meeting your date (aka your spouse) you still kind of get butterflies. Typically when we go out we get ready together. Tim sees me try on a million different outfits, and I ask him two million times if I look okay. When we're meeting somewhere, I usually put in a little extra effort and pick an outfit that's more for him than me. And since I can be pretty vain, I like the anticipation of wondering if I'm going to get his "dang girl, you look good. I can't wait to get you home." look. Probably TMI for some of you, sorry. Just being honest ;)

Anyway, if you're looking for a way to spice up your date night, give this little trick a try.