Money Talk

After I wrote this blog post I've had several comments and e-mails asking about how Josh and I were able to pay our car off so quickly and get out of debt (mostly). I decided instead of answering people individually I'd blog it. It's ironic to me how I chose to write about this topic today because I have been consumed with stress over money with a new baby about to be in the picture. Luckily the Lord has given me a few words about that. I'm saving that for another post.

Anyway, when the time came to really crack down and get serious about money I'm embarrassed to say I had never really done a budget before. In fact they kind of intimidated me. I knew if I set one there was no way I could keep it. I decided we should start out making baby steps then go to a full on budget.

The first thing Josh and I did was to go through our checking account the past month or two and highlight the different things we were spending money on like groceries, gas, clothes, eating out, etc. What I found was shocking. Josh and I had already been trying to do good about eating out. We'd eat a lot on $ menus or just go somewhere cheap. I had NO IDEA what all those "little" meals added up to. It almost made me sick. So I encourage you, if you've never checked out your eating out expenses you really should.

I also want to encourage you to tithe. For those of you who might not be Christians this might seem foreign to you but tithing is a huge deal. It's a command from the Lord. Let me be real and tell you that when I write our tithe check it hurts...a lot. We tithe on our gross not our net so it seems like we're giving the church a lot of money. And although my spirit isn't always happy about it I want to be obedient in doing so. You'll be amazed at how God will bless you. You'll think there might not be anyway you can give 10% of what you make because you spend it all every month but I encourage you to try it. Make the sacrifice and see what God does for you. Ok, enough of the little sermon back to the budget.

After seeing what we had spent money on we used what we learned to help come up with a reasonable budget. I would love to say that we stopped buying any frivolous items, never ate out again, never bought any new clothes or gifts for people, but honestly, is that realistic? No! Like Dave talks about in Financial Peace if your budget isn't realistic you won't stick with it.

In fact Josh and I were currently attending Financial Peace University when we set up our first budget. We used the tools provided to us to help us. You can go here to get some help with your budgets as well. We took our sheets home and started using our "research" to help us create a budget. I put it on an excel spreadsheet and we still use it today. Part of our new plan was to use the envelope system. I'm sure most of you know about this by now but for those of you who don't I will tell you. The envelope system is one where you put cash in envelopes for different items on your budget and you don't use your debit cards. I was skeptical at first but I'm confident this very thing helped us get to where we are.

This is the wallet I have right now.

And these are the envelopes. The envelopes comes with several for putting money in but there are also sheets to help you keep track of other things you might not want to put in an envelope, like rent or utilities. Our envelope headings are:

• Groceries/Toiletries
• Restaurants
• Clothing/Cleaning (as in dry cleaning)
• Hair Care
• Cosmetics (so I can keep covering up the 'stache)
• Gifts
• Medications
• Youth (this is because we go to youth events that I have to use money to pay for myself)

The other sheets are:

• Rent
• Utilities
• Taxes
• Car Care
  

You can use whatever budget groups that are right for you and your spending. We also budget Josh's seminary but we have a separate checking account for that (and for my sewing) so we don't use envelopes for it.

When deciding what items needed to be in our budget and how much we needed to spend on them we had to really get serious. We were either going to do this and do it right or not do it at all. Our first big decision was to rent a small apartment and not buy a home. This was tough because I had a house in Fayetteville and have the furnishings for a home so it wasn't easy to downsize. We knew though it was something we needed to do. We also made a few other cuts in order to help us pay our debt. For one we chose to do without the internet and cable. I never in my life thought I would give up either of those in my home. It's crazy how getting motivated to save money will change your way of thinking.

We also cut our eating out budget WAY down. In fact we only get $50 a month to eat out together. I confess that we had really slacked off for a while but we are back at it. That's not really a lot of money when you think about it. I should say that it doesn't include our Saturday morning breakfasts. Those are in a separate budget category. :) Although those are about to be cut out as well.

We have a very small clothing allowance which forces us to save it up in order for one of us to get something we need, not things we just want.

Josh and I each get monthly "blow" money to spend on whatever we want but even this is only a small part of our budget. We actually only get $20 each a month. That's all! Some months that's easy but other months it seems impossible. We've to slacked in this too so we're cracking down now.

By cutting back a lot we've been able to pay off our debt, maintain our initial emergency fund, and still buy everything we need and a few things we want. Any extra money from our budget went towards the car or dental bills. And when we received money as gifts (not all but some) or tax refunds or by selling something we put it on debt. Our goal was to get things paid off and it was worth it to spend our extra money on doing so. It was tough at times but PTL we did it.

Now that our car is paid off any extra money we have will go into savings to help when I'm on maternity leave. Once I'm back at work we'll start saving for a car so when the time comes, Lord willing, we'll be able to use cash.

Like I've said many times I'm not perfect when it comes to managing money. In fact I've been kind of lousy at it. But right now, in this season of my life, I'm so thankful that Josh and I have already been doing this. I feel the Lord is really asking us to have a LOT of faith right now as we are preparing for a new baby. It's hard for me to give up control of money but its all His anyway. And selfishly I want to be good stewards of what He gives us so maybe He'll want to give us more. :)