Good morning. We all have set budgets and have done budgeting in some form over the years. I really hate the word!!! LOL - It sounds so intimidating. I know there are many methods that people have used. Maybe you guys can share some of the methods you have used.
I know many have used Dave Ramsey, the envelope method and many other methods.
At my house we kept it pretty darn simple. We made XX dollars. 10%+ was saved back first. Bills were paid and then we spent on whatever. We kept our bills to a level that was manageable. Most times we tried to keep expenses to a point that ONE of us could cover the basic bills, should the other be out of work. We both invested the max we could to pre-tax accounts like 401K (it virtually made no difference in our take home pay).
Luckily we didn't have any major medical expenses in our years together and we had decent insurance. I know that not everyone has that.
Our logic was to always spend less than we made. If nothing was left over - we didn't play!
As we got ourselves on a good track - then we started stocking up and preparing for emergencies. I was lucky to have a husband that was onboard with that and even encouraged me. I gardened a lot and preserved. We loved yard sales and thrift stores and thought nothing of utilizing them. I was encouraged when I "FOUND" couponing - back when you could double and triple. I had a period of time that I spent almost nothing on groceries.
We had fun - but it was simple fun that didn't cost a fortune. We camped, got with friends and family, and wondered Indiana.
We drove older vehicles for a big part of our lives together. Luckily my Glen was a mechanic, and he took care of everything. We didn't get our FIRST new (to either of us) car until the house was paid in full. We paid the Blazer off in 2 years. (we got it in 2001 and I still drive it).
We knew that Glen had a great probability of having physical/medical problems and may not be able to work until retirement age. We worked our butts off to be prepared for that! That was our goal.
I know we have been blessed. Not everyone has had the same job and health insurance opportunities we had.
Life can make a lot of detours and success can look like the chart above. NEVER give up or give in.
Always remember - slow and steady wins the race. You aren't out to beat anyone else in getting your life and budget together. Your life is your life. Do what is important and necessary for you.
Write your goals and plans down. Keep that somewhere you can see it. It gives you incentive. Work hard. Make a plan with your finances and TRY your darndest to keep on track.
What has been your method of budgeting? What worked for you?
There are lots of people reading here and many may benefit or get that one idea that works from seeing what someone else has done.
Let us help one another. Please share your tips and tricks.
I use one of those spiral notebooks to keep track of which bills need to be paid each month, and since I was paid once per month, it was easy enough to pay them all at the same time. Like you, I always paid the bills before we had any fun. I think that's a good rule to follow. It helps me sleep better at night not having to worry about an unpaid bill.
ReplyDeleteI use a notebook for so many things. That is a good idea.
DeleteYes indeed, - everything paid - then play. Only right.
Yes, slow and steady wins the race. We should all have that tattooed on our arms. :D My husband and I met after we both had been divorced. I made the most basic of salaries as a bookkeeper. He didn't make a fantastic salary, either, but together we knew we could conquer the world. We paid cash for this house by selling a house that was too big for us and by moving a little further away from the more expensive homes. Between those two things it really paid off. Cash for our last two cars that are brand new.
ReplyDeleteNothing fantastic ever dropped in our lap, just a lifetime of frugality. If you look at it like a game it's a ton of fun.
Same here - I had been married, he hadn't. But we both came with debt baggage! Took care of that and then worked on other things.
DeleteIt is kind of like a game - and we always enjoyed seeing JUST what we could accomplish!
I should have added that we are both in our 70s now, so this was over a lifetime. 37 years of marriage,.....today.
ReplyDeleteThanks - we were together 33 years and managed it too. Now I am maintaining myself - thankfully I have a nice retirement and SS hubs.
DeleteHAPPY ANNIVERSARY!
i LOOK FORWARD TO YOUR POSTS, FILLED WITH SUCH USEFUL INFORMATION. YOU INSPIRE ME!
ReplyDeleteAahhhh thank you so much!
DeleteWe just made sure house payment is paid first, then the energy bills (phone car payment etc) then savings, then extras. We still do that this today but now our house is paid off.
ReplyDeleteGood job. It takes effort, but sure is worth it in the long run.
DeleteI kind of learned the hard way ... We both had pensions, watched what we spent, saved some, but also didn't scrimp -- if there was something we wanted or felt we needed, we would make sure we were getting the best deal, but we made the purchase. My husband was one who felt he worked hard, made a good salary, and should be able to have nice things. We both had pension funds, and my husband had a deferred comp fund for pre-tax savings and we deferred a nice % each month. He retired early and we were planning our new life and setting goals, making plans. And then he had a massive heart attack at age 62 (I was not quite 57), leaving quite a bit of debt for me to deal with. Over the first two years following his passing, I worked diligently to pay off those debts, limit my discretionary spending, and more closely track payments, all in an effort to improve MY (no longer "our") credit rating (it was good, but not excellent). I knew that, in order to do what I wanted to do, I'd need a better score. I'd always been the one to handle our bills and kept a notebook of payment due dates, amount due (what was the minimum required payment), amount paid, payment date, and check number. But, I quickly learned that, as a widow, that needed to change. As those bills came in, I factored the interest rate, along with the balance, and determined the number of months I (underscored and bold "I") wanted to have that debt gone. And I recorded THAT amount in my notebook, rather than the minimum payment. Some were easy -- pay off in 2 or 3 months; one was pay off in 18-24 months, if I was lucky! All credit cards were paid off in record time, the mortgage was paid off, and I was able to qualify for a 3% mortgage (the BEST rate at the time) when I decided to sell and move, and I was able to get a 0% auto loan when my 2007 car was about to require an exceptionally costly repair. Today, I carry no debt other than my mortgage and car payment. All credit card purchases are paid in full each month. This keeps me mindful of my expenses, and I only use them for self-service grocery check-out (no longer taking cash at self-service kiosks) and gas (because I get a $0.03/gallon rebate back on gas purchases from my credit card company). Purchases on store cards are limited to online orders only and are paid in full each month; if I shop in-store, I pay cash or write a check. So, this is not really budgeting, but more of being educated about my spending and being more responsible with my debt. Make sense?
ReplyDeleteFirst I'd like to say I am sorry for your loss. It sure isn't easy.
DeleteSecond, good job!!!! You really took the bull by the horns and won that fight.
I use credit cards for purchases too - as I get points for all $ spent - they add up. I pay off each month as well. I try to pay whatever comes in every Friday now - and I don't worry about things getting lost.
You are an educational tale and that is a good lesson for someone reading here.
Thank you for sharing. Take care.
Thank you, Cheryl. It's been 6+ years, and I finally feel like I'm finally finding myself again. Just to add, I started my "pay down" with the highest interest rates first (except that big one), realizing that the $20 shirt that I got on sale for 20% off, just cost me that much and more by carrying a monthly balance. I'm now at a point when I pay bills twice a month. :-)
DeleteI am a year and a half alone - and still do not have a clue who I really am. I was doing what I wanted - now I do ok, but I am still lost. I know it takes time. I had a friend ask me "what does Cheryl want to do?" My answer was "I was doing it". I will find my way in time.
DeleteSmart lady - a sale item isn't always a bargain. That interest can eat you up. Good job.
Sending you a virtual hug! Reach out via PM if you ever need to.
DeleteThank you!!!
DeleteI was a single mom from the time my daughter was born (I was 21) and although I worked in a bank, they paid me next to nothing. When I was promoted to customer service manager, I got less than 50% of what the previous manager (a man) made. Eventually I realized that I wouldn't ever get ahead so I quit and went to university. Student loans covered tuition and books, my mortgage, utilities and daycare for my son but little else. I was permitted to earn $200 a month extra, otherwise it was clawed back. I worked part-time during semesters and full-time in the summer. When I look at that time period, I wonder how I managed but I did. I planned menus for 6 weeks and stretched a dollar until it squeaked. When I finished university, I needed work clothes so went to thrift stores to start a wardrobe.
ReplyDeleteWithin six months I landed a good job, with regular increases in pay, and the possibility of promotion and the promise of a pension at the end of it I worked my tush off, and when the student loans were finally paid off (ten years later) I started putting money away in an retirement fund.
Around the same time, my life was turned upside down with my daughter's health issues but financially I was able to manage though I saved less for a time because of purchasing a larger house. At the time I didn't budget per se, just paid all the bills and savings first, then the rest was mine to do as I pleased as little or as much as that was. That's when I started travelling because I could do so.
Since I retired, nearly two years ago, I have really been much more conscious of the budget. I keep track using a spreadsheet, and am careful not to overspend. I continue to save a bit, while paying for house repairs and upgrades. Of course, these days, there is no travel so the funds I set aside for that is still waiting to be used.
It's a learning process, isn't it? I wish I'd known some of what I learned later in life when I finished high school. I wouldn't have wasted my time on low paying jobs and would have gotten my education earlier. But then, maybe I wouldn't have my children and grandson so...
Take care and stay well!
Oh hind sight is 20 -20. I wish I had been smarter earlier in life as well. It could have made a big difference.
DeleteMy goodness you are sure a wonderful example of perserverence and a stick to it attitude. SO glad you got the opportunity to go to university. That is wonderful that they did cover all those things for you. $200 isn't much - but you sure must have been at stretching it.
Glad you have gotten to the point that you can travel and do things FOR YOU! You'll be back at in no time.
You know I truly believe everything happens for a reason. SO it happened as it was supposed to. Like you said if one thing changed, the next generations might not be here.
Thank you.
Thank you all for sharing. Very inspiring stories
ReplyDeleteWhen we got married, I was a saver and dh was a spender with debt. We lived paycheck to paycheck. Decided to do Dave Ramsey's Financial Peace University. Got serious about paying off everything and canceled everything we could. Kids didn't miss cable as much as I thought they would. Paid off house early and paid cash for cars. Paying for kids college so no student loans. Saving for retirement. We have been through several layoffs and health crisis but being debt free has given us some peace of mind.
Peace of mind is golden!!!!! Huge!!!! You have done a fantastic job. I see a couple of gals that visit here that have paid for their kids college and that is a huge asset for the kids as well. Starting life without debt is tremendous.
DeleteHard work surely did pay off. Good job.
I love the cartoon, it is my life. So happy I have your blog to read it comforts me so much. You are my voice of sanity.
ReplyDeleteI thought it was pretty good. Notice no shovel or spoon is being used - just a rock. Using what he has to dig out!!
DeleteYou are doing great. You need to quit being negative dear!!
Thank you for your kind words.
We follow Dave Ramsey's plan. It works for us. We only have our mortgage left and we are currently putting extra towards it. We have an emergency fund and a well stocked pantry so hopefully we can make it through most storms.
ReplyDeleteYou have done so well. I do believe with the actions you have taken in the past and the ways you live you can weather any storm!
DeleteWe've done budgeting in several ways. After my DH's last layoff, we were making even less so it's certainly been a challenge. He's always worked social services jobs so we all know we're always pinching those pennies. I just list the regular expenses on a paper every month, record which paycheck will cover it, and pray a lot! In the meantime, he grabs any opportunities for extra pay that he can. By divine intervention, we always manage. We've always lived very simply and frugally. I always joke that if a burglar ever breaks into our house, he's gonna leave us $20!!! We have what we need and we're content with it. I think that comes from his depression era parents and my depression era grandparents. I lived with them several years and never knew we were poor. Life was too wonderful with them!!
ReplyDeleteIn an interesting comparison, my parents had much more but my dad complained constantly that we needed more. They were always whiny and miserable. Give me a happy poor house anytime.
There you go - you just proved my point I was trying to make the other day. Have a lot and want more - have little and need nothing.
DeleteBeing content and happy is such a blessing and a wonderful feeling. You my lady have the right frame of mind to make it through anything and you both had some good examples in your life.
When someone says "I never knew we were poor" - it means someone was doing things right. I love that.
We've been blessed with lots of great opportunities, but put them to work well & took advantage of them by being responsible. We know many people in our situation who didn't pursue that path.
ReplyDeleteI've been working since I was 13, and saving for retirement since I got my first "real" job. We've had plenty of tight months, but now are able to handle expenses much more easily because we have a large emergency fund. That large fund helps me sleep so much easier at night. It also reduces friction at home, when you are not having to worry about expenses, it reduces overall stress level, which is key for us.
Amen. Money is one of the biggest problems in marriages.
DeleteResponsibility is HUGE - so many today are not.
Thank you for mentioning that!
In all honesty, we have lived below our means for so long, we don't budget. We started tracking every penny back in 2000 and we still do and always will for awareness.
ReplyDeleteBack when we had debt, all bills got paid first, then groceries, then what was left could buy "wants". Is that truly budgeting?
We started snowballing debt back in 1992 and saving/paying cash for large purchases. This got us debt free by 2010 including our small mountain cabin.
Kind if how we budgeted. Glen used to keep a chart of everything - and where the money went. I haven't been doing that - but we always lived below our means as well.
DeleteGreat job!
I've lived beneath my means all my life. Sometimes it was only barely beneath, but I did not overspend. I can't say I've every really had a budget. I do try to stay very much aware of where the money is coming from and where it is going. Needs first, then some wants. Discernment to understand what are truly needs and what are mere wants. Discipline to make the tough decisions and stick to them.
ReplyDeleteThe best advice I could offer is to not let your emotions rule your pocketbook. Money is numbers and numbers don't care about emotions. Knowledge is power, and financial knowledge is essential. Understand where your money is and how to make it grow in sensible ways. Vote with knowledge of how the candidates/parties stand on issues that affect your finances. No one else cares more about your money than you do. Don't partner with a person who has no sense of financial responsibility (like I did with my first husband, who left me with $10 and two sons in 2000). Be willing to deal with your child's disappointment when you tell them "No, we are not choosing to spend our money on (whatever)." You are actually doing them a favor not giving them all they ask for. Don't participate in "retail therapy" when you are down or upset. Be willing to deny yourself pleasures in the short term in pursuit of the longer term goal. Do you "deserve" that treat (vacation, new shoes, expensive latte, etc.)? Or do you deserve to be able to sleep at night knowing you are debt free and have some put back for life's inevitable emergencies and eventual retirement? I know what I chose.
Oh thank you. You made many hugely great points as well.
DeleteNeeds and wants
Your partner
Needing to say no
No retail therapy
Desires on hold
Knowledge..............
and so on.
Great reminders!!!!!!
The key to watch what is coming in and going out. I have a monthly calendar that denotes what is due and when. I use the calendar as a journal to keep track of payments and very rarely miss anything. Almost all of our bills are paperless and I sit down at the computer and do everything at one time. Buying stuff doesn't make you any happier.
ReplyDeleteI haven't gotten into paperless yet. I am so old fashioned.
DeleteGood process.
No - buying things in no way makes you happy - maybe for a moment - but that sure isn't worth it.
How do you know how we have always lived? LOL. Never had a set amount for anything such as groceries. I think if you budget 40 you are giving yourself permissionto spend that much when if you look for sales, less expensive products you can do just as well on 30 and have 10 to save or buy something you need or save toward things like vacations that we tell ourselves we can't afford. If I budget 100 for a coatand find a practically new one at the thrift store for 10 then I have money toward Christmas. After you wear an item once it is used. Living well in retiremen, still in our own home and can have some luxuries with just social security and our savings are still there.
ReplyDeleteLOL - I guess many of us have lived a lot alike!!!!
DeleteI agree with you on that not setting limits. It does seem like it gives you permission to spend it all - when in actuality some can be saved. I love that idea!!!!
It is amazing how well one can live and do it on a small or middle income.
Thanks for these thoughts!
Another blog I follow suggested something that has really worked for me, when it comes to budgeting for groceries. While you may budget $40, and try to spend only $30, set $5 of that savings aside to allocate specifically toward building your pantry staples for an emergency situation. At the time this strategy was mentioned, it was intended to aid in hurricane prep. But it could apply to any emergency situation, be it snowstorm, hurricane, tornado, rioting, pandemic, or health crisis. That $5 is only to go for pantry-building, and if there's anything left over, roll it into the next month. This strategy has allowed me to add tomato paste to my stash, when it went on sale for 0.39 (I bought 12); a 2nd family pack of boneless chicken breasts, instead of just the one I'd usually buy, etc. I usually spend it on deeply discounted sale items or clearance rack dry goods, and compound the sale with coupons whenever possible. And I ONLY use those funds on items I KNOW I will use in rotation. Helps stretch the dollar while making sure I have a little extra in the cupboard, just in case ...
DeleteYes, I have seen that as well. Very good idea. $5 per visit can make a big difference in the deep pantry. Every little bit helps.
DeleteThank you
Well, I made a complete mess of the first half of my adult life. Luckily a couple of kind, loving relatives reached down into the pit I was in and pulled me up and out. It took some time, but here it is over twenty years later, I have a reliable job I like, budget in a spreadsheet, pay credit cards in full monthly, pay bills the day I get them, save, and in a few months will pay off my mortgage ( my only debt). I owe everything I am now to those blessed relatives. Celie
ReplyDeleteCelie that is a fantastic job. Sometimes we all need a hand-up. That is so wonderful you had caring family. You have done a great job is taking control of your life and finances.
DeleteYou should be proud.
When Harvey was working we always put money away. We were lucky and won a great deal of money on a scratch ticket. I invested that and once it was enough to pay off the mortgage that is what we did and that money got added to the savings pot.
ReplyDeleteNow we really have a budget which I try to stay under. Sometimes I manage it, sometimes not. I do make it a game though and that seems to help. Harvey says the budget is just a suggestion, I take it as being the most we can spend.
God bless.
Lucky you on that win! WOW - that is great.
DeleteSmart way to use those funds instead of just blowing it. You made a great investment - your home.
It can be like a game - how low can I go?
Sounds like you have a good grip on things.
Blessings