In case you missed the sensational story of the time I had to have our son’s school hold his tuition check and the time I sobbed in the parking lot of the gym, it’s a must read. It’s riveting! It’s exhausting! It’s miserable. It’s the starting point to what is hopefully my family’s budget renovation.
Here’s what you won’t find in this story. Fancy tricks or get rich quick schemes. We aren’t going to be transferring money from credit card to credit card to avoid paying fees or to rack up some kind of points. We aren’t gambling. We aren’t investing all our money in a pyramid scheme. Why?
THESE DO NOT ADDRESS THE ROOT OF THE PROBLEM. Making more money is fine. Really. It’s kind of key to getting out of debt. But just having more money won’t change the fact that we have seriously mismanaged the money we do have. What’s that expression? Live Within Your Means? You hear so many horror stories of people making more money and spending up. Buying things on credit or taking expensive trips because “my income has gone up!” only to have something derail the finances. Emergency, job loss, anything.
This was us. But we have money coming in! We’re just fine. But we weren’t. Not even a little bit.
First things first. Let’s make sure we can actually cover our bills before we even spend one minute addressing our spending habits. We won’t have a roof to sit under and address those habits if we don’t pay our mortgage.
Each week, my husband and I sat down with our bank account and our bills and absolutely 100% necessary expenses. If it wasn’t going in our mouths or paying the bills with due dates, it had to go for the time being. We didn’t eat out. We bought groceries at a bare minimum. We cut back on driving as much as possible to save on gas. Instead of writing checks that may or may not be cashed right away, we starting using cashier’s checks that will immediately register a new balance in our account. No surprises.
For a month or so, even this wasn’t enough. We had dug ourselves in so deep. We scoured the house and sold some of our stuff on Craigslist and our local Facebook group to cover where we were short. While I don’t like getting rid of things that we may eventually have to buy again down the road, these were desperate times. We were literally day to day.
Every week, we had a budget meeting. Where is the bank account? Do we have enough to cover our bills? What (if any) extra money do we have coming in? What can we cut out?
Slowly, slowly, slowly we began to creep back to breaking even. Not even ahead most weeks, but we were coming out of the fire. We took a very serious look at our bills to figure out how we could make them all fit in my husband’s income, in hopes that we could use my sporadic income to pay extra down on our credit cards or to buy the new tires my car needed or to set aside an extra month of tuition. Just in case.
In a nutshell:
- We wrote down all our bills for the month on a calendar, so we could compare to when my husband’s check was deposited.
- Each week, the night before the check was due to come in, we started with the balance in our bank account and worked from there, based on what bills we had coming out. We discussed any plans for the weekend that might require a few dollars, any birthday parties we were invited to, any field trips the kids had, why or when we might need a few extra dollars for the gas tank and what we could spend on groceries with what was left over.
- We did our best to pull cash for groceries and gas, cashier’s checks for any bills that weren’t paid electronically and nothing else. If something came up mid-week, we discussed it before spending because most weeks, there was literally ZERO extra money.
- We meticulously tracked our grocery spending so we could get a good average on what we were spending each month, from all sources.
After about three months of these weekly meetings, we started the month of February with a pretty clean slate. We made it through the first week (which includes the bulk of our bills, including tuition and mortgage) and are now looking to be back on our feet for good by the end of the month.
I said back on our feet. Not out of the woods.
Our goal over the next few months is to get to the point where we have one month’s bare bones expenses saved up. Basic bills, mortgage, kids’ tuition. We will still sit down for a weekly budget meeting, but this would hopefully prevent those weeks where we feel anxious and on edge that some awful surprise will pop up and leave us floundering. When we get to this point, we will write out our full budget plan and hopefully start hammering away at our credit card debt.
This has not been an easy road. There has been a LOT of frustration and a lot of tears and pretty much always saying no to everything, but it has also been a glorious blessing. My husband and I are working closer than ever to reach a goal that will have such positive repercussions for our family. We are talking about the future in more than just vague general terms. Not having any extra money leads to conversations about our dreams and goals and what we would like our lives to really look like. It has led to some great conversations about money with our young kids. It has forced us to really confront our individual financial habits and learn what leads us astray. Staying in more often has led to more family time and a little bit less hectic of a schedule. Being forced to really take a detailed look at my income has made it that much more important to set specific goals for my business. Which should be a no brainer, but my brain doesn’t work like that.
It is never ever EVER a bad thing to be in control of your finances. To be on the same page as your spouse or significant other. To be on a budget. To have conversations and discussions about your purchases.
Our path is not what I would recommend, but it has brought us to a healthier place, so there are no regrets.
Next up? Now that the Great Budgeting Saga of 2015 is hopefully behind us, when (yes WHEN) we have a month’s worth of expenses saved up, I’d like to come back and walk you through our monthly budget and the decisions we will be making regarding our debt.
Where are you at in your budgeting journey? Are you solid and have some great tips to share? Or are you hanging on by a thread like us and working your way back to the sunlight?
I seriously can NOT recommend Dave Ramsey’s Total Money Makeover enough. We have used his simple budgeting principles to dig us out before and we will use them again. It’s not easy, it’s hard work. There is no quick fix, but it works. If you are struggling like we are but don’t have the tools to turn to, I 100% suggest this book.
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