Spring is nearing, I can hear our coming tax return beckoning to me, along with the expenses that we need it to cover including wisdom teeth removal for our lovely 17 year old and a few other necessaries that make that check a life saver in our vow to refrain from debt. The remaining balance though is always too tempting. The intention is to leave all that remains in savings for a planned $10,000 emergency cushion that we’d like to attempt to have accumulated by May of 2018. It’s a big goal but one we have every intention of achieving.
That said I think it would be a good time to get back to basics and review the two basic fundamentals to spending that can slip by the wayside unless given the proper attention.
1. Know Where Your Money Goes
I can get into a bad habit of paying bills and using the rest of the money as disposable income, just glad that all of the bills are paid. This doesn’t even mean that I go spend crazy as the “disposable income” isn’t shopping spree worthy. It does mean though that some weeks I’m not checking the ads, making impulse purchases at the grocery store, and grabbing something at the drive through when in a time crunch instead of planning something quick and easy to have on hand. This isn’t terrible if your goal is to continue to live paycheck to paycheck. This is NOT our long term goal!
Planning on getting back to some good habits here including a simple revolving meal plan and just having a few basic 15 minute meals ready to go if my ready to go leaves me in the dust that day. Would like to get back to my $100/week grocery challenge. Not sure if anyone would like to follow along but if you would please comment below.
Also planning on doing a 1 month tracking of each penny out. I know there are tracking apps and programs available but I prefer a simple paper and pencil method of tracking. I’ve done this many times before and it’s amazing not only how misinformed I can be about where my money actually goes but how motivating it can be to just write it down. That coffee at the coffee shop might not seems like a big deal but when you’ve written several down in a month you do begin to think twice about stopping in for a double shot of caffeine.
It doesn’t matter what method you use for tracking but knowing where your money goes each month is a necessity if you want to really be in charge of your finances. One of the easiest ways I slip out of frugality is from letting go of tracking my spending each week. Keeping yourself in the dark about your own finances is like avoiding standing on the scale. In this case, ignorance isn’t bliss.
Tip: if you try one tracking tactic and fail at it, do not give up. Find a system that works for you, but make a habit of tracking.
2. Live Below Your Means
Not as simple as it sounds but a worthy goal none-the-less.
Hopefully you’re smarter than me and embrace this concept early in life. It was really fairly recently (last 2-3 years) when I realized that living within my means wasn’t exactly living paycheck to paycheck… but making sure that the bills were paid and that there was cushion for those emergencies that inevitably come up in each and every year. Since my first debacle with debt in my mid-twenties I have had an aversion to consumer credit but failed to realize that wasn’t enough to be considered living within my means.
The first step to living within your means, after figuring out where your money goes, is to figure out how much you have coming in. Check that against what is going out and how much of what you earn you actually WANT to return to the world each month. I’ve read several blogs in which the blogger lives on substantially less than they have coming in and enjoy an early semi-retirement! One of my favorites is Mr. Money Mustache. In a perfect world we would live on half our income but that is not the way we’ve set up our life so far but it is a lovely goal to daydream about.
Even if you decide that 10% (also a worthy goal) is to remain unspent, that’s when it’s time to compare what you have going out to what you have coming in. Is there anything you can cut to meet your goal or do you need more coming in? Is the sacrifice of your time for that extra work worth the spending that it allows?
Gaining a realistic idea of how much is going in or out and made a real plan as to how you want to take charge of your finances will aid you when those impulse purchases rear their ugly heads. It becomes harder to justify a splurge. You can wait and plan it out with your current budget in mind.
What about those unexpected bills? When you’re living below your means you can save up an Emergency Fund. Last year we spent a lot on medical bills along with my husband having a couple of week long lay-offs during the summer. It wasn’t fun taking money out of our savings account to cover them but I can’t imagine the mess we’d be in now if it weren’t for our savings account.
there are families out there that legitimately can’t get their needs – food, clothing, shelter – met on their current income. I know about that scenario, so no shame meant from me.
If that’s your situation I know that these steps can also help you to plan for the future and really take matters into your own hands, but you’re probably already living where the rubber meets the road as they say. There isn’t any fat to cut or meals out not to buy or new cars to sell and replace with older cheaper models or preschool Mandarin lessons to opt out of.
Sites like Penniless Parenting, Money Saving Mom, and The Frugal Girl can give you some ideas for stretching your dollars (I would also love it if you returned here to look around) but you may already be doing all those things. All I can say is, soldier on friend. Each new frugal change we make may not be the difference between luxury and want. But it can make a difference.
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