It's funny to me how my priorities change year to year. Last year I thought we really needed to focus on saving for our next house - we even found a new build (which I've said I wouldn't do again) we loved and seriously considered a move. And now? I'm really content with the home we have. We have an easily affordable mortgage payment, plenty of room and the most wonderful neighborhood and neighbors ever. I sometimes get the green eyes of jealousy when I walk into friends homes with fabulous open layouts and big gourmet kitchens, but this house is perfect for us right now and I'm loving and savoring that content feeling.
B and I sat down and reprioritized the budget in January - we do this about twice a year to make sure that the budget is working for us, and with McKiddle #2 on the way we wanted to get a good picture of where we stand and what changes we can afford to make. Our health insurance is costing us more this year as B's company started charging monthly premiums on top of our High Deductible Health Plan, groceries cost more than they did a year ago, and salaries are the same. It is what it is and there's no point in fighting it - we live frugally for just these reasons - we just needed to re-divvy the budget a little bit to accommodate for the higher cost of living.
Our grocery budget was probably our biggest budget problem starting around August of last year. Thomas started eating more, but I think it had the most to do with grocery prices going up (our basics are along the perimeter of the grocery store, and we noticed an especially big dairy price increase in the last six months). So we raised the budget and I'm also committed to doing a better job of meal planning because when we stick to my meal plan method, the grocery budget fares much better.
We've also budgeted for charitable donations for 2012. We weren't very good at this before - we gave when we felt compelled and what we thought we could give, but this year we sat down and really budgeted our church tithing and our other giving - specifically one non-profit that Mr. B sits on the board of and our local Catholic Charities. B and I sometimes get so caught up in living according to our frugal budget and shuffling every last penny into savings that we forget how fortunate we are and that we not only can give back, but that we should give back. So that's probably the biggest lifestyle change for us this year - spending less so that we can give more.
And of course, with the second baby coming, there's budgeting for changes there. Luckily we don't need much for McKiddle #2, but we'll want to fund a 529 for this baby like we have for Thomas, which requires smart saving.
Here's how our monthly budget's looking for 2012 (with real numbers this time, why not?) Groceries Eating Out Casco: Gifts Clothing House (Decor, maintenance, etc) Personal Spending (aka Allowance - Mr. B and my monthly stipend we can spend however we want - lunches out, movies, etc) Diapers, Clothes and Toys Church Charity Stroller Fund: B and I like to have a specific category to save cash for each year to keep us really on par with the budget - if we're saving for a concrete, attainable goal, we are better about the budget. This year it's a "Stroller Fund", but will pay for our double stroller, car seat (the infant carseat we used for Thomas became evidence in the child abuse case at his daycare), and likely a second crib. But one year this was a new couch fund, one year a pay off B's car fund, and next year we anticipate it to be a 5 year anniversary trip fund, etc.
And our set expense categories (paid via direct bill pay or credit card which is paid off monthly): Mortgage Payment Water Bill Electric/Gas Cable Cell Phones HOA Car Insurance Life Insurance Gas (not a set expense, but paid via credit card rather than cash for safety and convenience purposes) And everything else goes into savings. So that's how our Envelope System of Budgeting is shaping up in 2012 (way to get around to posting about it in March, Emily.). How's your budget these days?
Emily, I'm in the same boat as you. Married, toddler, baby on the way. I would love for some real world numbers on your budget!! And what do you do with the remaining? Is that all geared toward savings, 529 plans, etc? Thanks!
ReplyDeleteLove your blog!
Emily - you are truly an inspiration to me for your envelope system. Ryan and I defintely keep a strict spending plan, but I love your approach and the way you adjust it as your life changes. Just curious, do you and B ever have "disagreements" about where money should go? Or are you usually on the same page? Because I tend to be more of a spender, Ryan and I sometimes disagree.
ReplyDeleteWe've also noticed an uptick in grocery spending in the past six months, but our biggest "uh-oh" area has been eating out. This is something we're both trying to commit to getting in check before the little guy gets here. It's just too easy to swing by the drive-through for breakfast or go out for lunch or dinner. That has put a big ding in our budget.
And one more question for you - do you get cash for the entire month and divvy it up? Or do you get it weekly? Just curious about the logistics. I think we should really go back to cash-only for groceries, eating out, personal spending and house - but we didn't do great with this because of the logistics when we tried it before. (Totally an excuse.)
Thanks for updating us on your budgeting progress. At least for me, I really enjoy seeing how others handle their finances.
Hi Emily!
ReplyDeleteThanks for continuing to share your budgeting process. It is so encouraging to see other families and how they are trying and succeeding with cash budgeting. And I really appreciate being able to look at someone a few steps ahead (we're still sans kids) and start to be able to think about the logistics for the future.
Kylie
My husband and I tried the envelope system for about 2 weeks but we suck at it. How do you manage unexpected things that pop up? What if you forget a friend’s birthday? Or you are out with friends and they want to go out to eat and you don’t have enough money in the eating out fund? Do you tell them you don’t want to eat or do you just take out from another account? Do you mind me asking about how much you put in your gifts and eating our fund? If you don’t spend it one month does it roll over to the next? I have no idea how much too actually put into different categories. It would be very easy to put $100 in eating out, or we could try to actually save money and put $50 in it. Any more tips and tricks would be greatly appreciated. Thanks!
ReplyDeleteEmily,
ReplyDeleteWe are back to the envelope system this month as well. Not as structured, because that didn't work for me the last time. But we will be cash only this month and see how we fare. Horrible, but this past month we have NO IDEA what happened to our $$. Sad, but true. This is helpful to see other people in the same boat!
John wasn't up for the cash system but we compromised on mint.com. It's a free site with a great ap, so I can check our spending in various areas while I'm out and about. For me the hardest part of budgeting (while besides sticking to it) is figuring out the areas. I feel like I either get too nit picky and make a category for everything or have too general sections.
ReplyDeleteI love your budgetting process.. I was actually thinking i needed to be more like you on a walk today with my dog. My husband and I were just looking at Kiplinger's this weekend to find a budget spreadsheet to get a better idea of our budget and where our money is going. Oddly enough Kiplingers doesn't really have a real world 30-something spreadsheet, and you do! Thank you! We don't have any children yet, however they will come someday and while living in CalIfornia can be unbelievably awesome (especially in January when all our family/friends in Minnesota are complaining about the weather, we are thankful to be living here...but then we look at buying a home and $900,000 for 1300 sq. ft fixer upper is a bit daunting and makes us think, hmm...can we make this work for e long haul? It's hard, and I just want to thank you for being so real about your budget and sharing it so that we can get on top of our own budget.
ReplyDelete