Saturday, October 03, 2009

Forget the crows feet, laugh lines, advanced degrees, and, um, children. Budgeting finally made us feel like grown ups.

Grown ups who carry lots of envelops of cash. We mulled it over, considered all of your awesome comments, thumbed through the Dave book, poured over a few months of online bank statements, and got drunk.

We realized that we have become so careless with money that we actually lost the register part of our checkbook a few months ago and just stopped writing things down, keeping our receipts, or logging into our bank accounts (except when we pay our mortgage which we have to manually transfer every month, which is stupid).

Even though Dave Ramsey says that debt is the enemy, we weren't sure we wanted to halt our savings to pay off some minor issues, but we knew that the minor issues were screwing up our cash flow, including the stream of cash that should end up in our savings account every couple of weeks.

We decided to go with the approach advocated by Becca, so after we set up all of our bills to autopay (except the mortgage, which? stoopid) at staggered intervals that allow us to have a steady amount of money in our accounts throughout the month (we used to have one high pay period and one dry one, which? stoopider) and made a couple of spread sheets (one for bills and one for all other spending), we figured out where all of our money will go. We went to the bank this morning and withdrew an awkward amount of cash in an even more awkward assembly of denominations and stuffed our little envelopes. SInce we're doing our big grocery shopping tomorrow but we needed dinner for tonight, we had a heated debate about which envelope we should use to buy ingredients that culminated in me walking around the supermarket clutching an envelope marked "entertainment." Because Italian beef sandwiches are really fucking fun and my gym clothes lack pockets.

Things we learned from Dave Ramsey:
The debt snowball:We modified this idea to pay off 4 really dumb credit cards, all interest-free, each used for a single extravagant purchase that we could have paid cash for at the time but didn't because we had sticker shock (which? stoopidest). This month, we wiped out 2 of them, and we should be able to finish the other 2 next month or by early December.
Learn from little successes: We were so excited to watch those bills flash paid in full that we could forget (sort of) how many zeroes we transferred to accomplish that goal. We also made sure to budget realistically or a little generously in our cash envelopes. We know that we can make the cash last all week, and we hope to have enough extra to deposit back into our savings at the end of the week. Either way-- sticking to the budget or coming out ahead-- we are winners. We're paying ourselves weekly, so that we have more opportunities to succeed. (Not sure if this is a good idea, but we'll see).
Account for every penny you make before you spend it: Using our spreadsheets (thanks, Nichole E.), we told every dollar where to go, and if we had to adjust one category, we made sure to balance it out by adjusting another.

Things we learned elsewhere
Pay yourself first: Our savings is deducted from our checks automatically, so we pay our savings accounts like a bill.
Leave room for fun money: You don't have to tell me that twice
Use cash: and when the cash runs out, you're done spending.
Track your spending: Duh, right? But you have to remember, we are money idiots, and the only managing of our money we used to do was transferring some to the savings, and then putting it back in our checking because we bought some dumb stuff. That we totally "needed." Like plastic tool box dressers for Harry and Jack (but more on those in a minute).

Something we're still doing wrong:
We actually still have another credit card (interest-free) that has a balance and has had a balance since we got married and combined all of our consumer debt onto an interest-free card. Over the past 3+ years, we have paid and spent, paid and spent, paid and spent so that the balance is right where it was when we opened the card. The only commitment we have made regarding that card is to STOP USING IT FOR THE LOVE OF ALL THAT IS GOOD AND HOLY and to pay x amount each month. We're not going to debt snowball it right now, opting instead to squirrel money away for that magical day when the housing market rebounds and we can leave this house for good.

So there you have it: our money makeover. I'll let you know how it goes and how I can still afford all the really expensive shit I like to slather on my face morning and night.

The other week, the boys' IKEA dresser fell all to pieces (with only the slightest provocation, I swear to you), and we didn't know what to do. We didn't want to buy anything nice, really, because we don't know what kind of bedroom furniture they'll have when they've outgrown toddler beds and cribs. It seemed silly to match a whole room to a dresser. We looked on Craigslist, but it was all fugly in our area. We looked at Target, but we sort of feel like those assemble-yourself pieces of furniture are only as good as the assembler, and we suck, as evidenced by our houseful of decrepit IKEA crap. So we finally ordered some plastic ones from Step2, the company that made Harry's bed and both of their toy boxes. Before I had 2 boys, I swore I would never fill my house with ugly plastic furniture. Now? Well, it's only one room that's filled. They are actually really cute, and they'll work as toy storage in a future playroom, or even as sporting equipment storage in a future garage.
Ben's the wicked witch! Ben's the wicked witch!

Plenty of storage

The room (with more space to play with this furniture configuration, we think:)

This turned out to be a really dumb arrangement. Jack is in his crib right now pulling books off the shelf instead of napping

I love Harry's cozy little bed. I'm going to be sad when he outgrows it. Which? Soon.

That growth chart on the wall? Hold lots of pictures. None of them is of Jack. Poor second kids.

4 comments:

Anonymous said...

sounds like all of you are growing up..you'll be ready to move and get what you want in the near future I would bet...I'm still enjoying Huntley, who is beside me always...Bomma

Becca said...

Those dressers are super cute! Congrats on the budget! I can't wait to see pics of your Craftsman Bungalow one day!!

AJU5's Mom said...

Really - plastic is practical for kids! In order to get wood sets that stay together, you have to shell out a lot of money! And now they can beat up on them as much as they want, and they should stay together!

Amy said...

OK I forgot to say this, but need to. Josh and I use one credit card account (we each have a card for the same account) for ALL of our spending. Every single cent. I don't even know my ATM pin. Sad, but true. But, we pay the card off in full every month. This helps us see where all the money goes and in the end, gets us a ridiculous amount of hotel points. Guess how we went to the Maldives last year? POINTS.

I would suggest maybe using a card that has airline miles or hotel points (we do United and Hilton) that allows you to get something back for all the money you spend. Using cash is great, but you don't get any points for doing it that way.