The B word

no, not that one…the other “B” word- BUDGET. Just reading this word sends a lot of people into a frenzy thinking about all of the things they can’t do because of this awful, nasty word. “Oh, we could never live on a budget, we enjoy ourselves too much.” “We thought about budgeting but it just isn’t for us.” HUH??? I think the biggest misconception about budgeting is that people believe it to be too restrictive. Ah, we Americans- we don’t like to be restricted. We want to live how we want, when we want, and we don’t like to hear the word “no.” Basically, we live in a world of denial. We’ll, I can honestly say that being on a tight budget has been one of the most freeing experiences of my life.

OK, so most of us have been there- you’re at a restaurant with a date or some friends. You’ve planned to pay, but you’re really not sure what the total is going to be. In your head you try to secretly calculate everyone’s meals as they order but that extra side of potatoes jubilee is throwing everything off and then finally the big moment arrives- the little black billfold is placed on the table. You cringe, open it up, slide your card in without looking, and cross your fingers it’s not declined (after you take the mints, of course). If it isn’t, you happily sign your name, THEN check the total and run to the bathroom to call for your balance (just to make sure you are truly covered). If it is declined, well, there are few things more embarrassing and restrictive in that situation. If only you’d have budgeted! You’d enjoy your meal to its fullest, knowing you’ve got it covered. When that billfold comes, you casually, but classily whip out your eating out envelope (more to come on that later), and you fan your twenties out, oh so gently, while your date looks on with a smile. “Oh wow, he paid cash?” Nothing says responsibility more.

Restrictive? Maybe in some sense but really not. I’d trade eating out only once a week for a sound night’s sleep any day. Plus, you’ve worked hard for this cash- really, really hard. You start to appreciate eating out on a different level and instead of blowing it on pizza delivery, you want to make it the best restaurant experience possible- even better with a coupon, I might add. But maybe save that for a second date.

Dustin and I lived almost 4 years together without a budget. We might as well have opened up our car door every weekend and thrown hundred dollar bills out of it. We had many moments of crossing our fingers and hoping it worked, but guess what, usually it didn’t. The night that we did finally sit down and become “restricted” was a very long night with too many calculations and not enough Shiraz. But, it completely paid off (hehe).

There is way enough information out there on budgeting, so I’m not going to go into details right now on how to do it. To briefly sum it up, we listed everything we ever bought in a year’s time and divided it by 24 (the number of times Dustin is paid in a year). We were conservative with our numbers but still realistic. Everything must have a category- haircuts, staining the deck, clothing, turnpike fees- you name it, it’s in our budget. We then created our envelope system and began filling them with CASH at each payday (more about that in my next post). Whatever was left over we decided to throw at debt and begin our debt snowball (also more about that to come). After 2 years of living this way, we actually feel like we’ve got everything covered and we are making some headway with our debt. The system truly works if you have the discipline to keep at it. It’s very much like weight loss. You have to work, but you will slowly see results.

In 2012 we were able to pay for the following purchases completely with cash while still throwing huge chunks at our debt:

Granite countertops
Ceramic tile
8,000 IRS payback (from sale of last home)
New stove
Roof repairs
Driveway resurfacing
Paint kitchen
Kitchen hardware
Tires Dustin car
Catalytic converter Dustin car
Treadmill
Staycation
New range hood
Laptop

2 years ago, most of those items would have been financed. I am proud of us.

In 2013 we hope to focus considerably more on just our debt and restrict ourselves from major purchases. Each year we keep getting madder and more disgusted with it. We want it outa’ here!!!!

Dave Ramsey (note: I will be referencing him, like maybe, ALL of the time, sorry!!) says there are 2 kinds of people. You have your “nerds” who are very disciplined with their budgets and love spreadsheets. They tend to be very conservative with their money and over think every last piece of gum that they purchase (woo hoo, yes that’s me). And you have your “free-spirits.” They tend to buy without really thinking about the consequences, live life to the fullest, and hate budget meetings and Excel (yup, Dustin). Put them together and bibbity bobbity boo, you have a good team. They balance one another and usually there is one of each in every relationship. It works for Dustin and I. There are a lot of disagreements, of course, but we keep each other in check.

Here are a couple free tools for budgeting that my friend, Alexis, found:

http://angus65.com/

http://a248.e.akamai.net/f/1611/26335/9h/dramsey.download.akamai.com/23572/daveramsey.com/media/pdf/forms/fpu_monthly_cash_flow_plan_forms.pdf

Promise this is the last post today. I just have so many of them swimming around in my nerdie head!! :)

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2 Comments

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2 responses to “The B word

  1. melissa

    Thanks so much for being real. One of my new Yeats resolutions was spend smarter.but this blog has inspired me to make it bigger!

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