Thursday, March 18, 2010

Living on a tight budget

I think one of the most difficult things to deal with as a family is the financial ups and downs. The economical situation has changed so much in these last few years and we cannot predict what's going to happen or what will our bank account be like in a couple months. Last year was probably the hardest one for many of us...the recession hit us all very hard. Some f our husbands got laid off at work, or maybe we were lucky enough that they only had hour reduction. At the time that the recession hit its peak, while many of my friends were losing their jobs, I found myself so blessed for my husband having TWO jobs. It was a real blessing and we are so grateful for that, and he had to work really hard to continue keeping both jobs.
Even with two jobs, there were really hard times. We lived a couple of months with only a little over $1,000. How did we do it? I really don't know, to be honest with you. Probably divine help, but also our hard work on our monthly expenditure planning.

Budgeting is the key when you live on a tight income. Living on a budget is sure not easy, but it will bring you peace of mind and you'll feel more secure IF you stick to it!!!
So here's a couple of things you should keep in mind when rethinking your economical situation:

  • CREATE A BUDGET: keep a record of your expenditures. Record and review monthly income expenses and determine what you need to reduce...especially nonessential things. On your budget you have to include FIRST all the obligations you have such as tithing and offerings (for those that contribute to whatever church you are a member of), housing, transportation, insurance, food, utilities, and so on. Everybody has their own budget and limitations. Some think that $2,000 is way to little for a family of 3 (mom, dad and one kid), some think that $3,000 is too little for just the two of you.
Just to give you an idea, I here present you my budget:

Total monthly income : $2,900
Rent: $975
Cable/Internet: $85
Electricity: $65
Car Insurance: $130 (for 2 cars)
Car loan: $210 (only 1 car..the other we bought with cash)
Groceries: $250 (anything we buy at Smiths, Sam's Club, or any other grocery store is counted as grocery.)
Gas: $240 (both cars. My husband works 35 miles from home, 5 days a week, which makes 70 miles/day for him. I work only 5 miles from home, 3 days a week.)
Fast-food: $60 (we like to have a budget for fast food or any eat-out we have so we'll keep track of how much we are spending on it. Since we love to cook, we don't spend much eating out, we do all at home. But days off are usually when we spend the whole day out and we use that money for these days or any eventuality with friends. Regular days, we eat at home)
Personal: $70 for me, $70 for Brandon, $70 for Rachel. (some months I end up spending MY personal money buying things for my daughter - as all moms do :) - but I still keep it within our budget).

PS1: after paying our tithing and offerings, we still have some to put on savings!
PS2: next month we'll have an addition on our budget: health insurance ($120)

Whatever you do, however you do, just make a REAL thing for you and you family, and that works for you. Make sure you are not overdoing/overbuying and being rational about it.

  • SAVINGS: sometimes they can be impossible, but try to put aside what you can. Gradually build a reserve and use it for emergency only.
  • SHOPPING: change your shopping habits and look for good values, cheap shops rather than the ones that offer brand name. AVOID sales unless you need something in particular. Even 20% off sales + 30% off coupon can cost you a lot at the end of the day.
  • CREDIT CARD: keep ONE credit card (if you have any. I never had one!) for emergencies and destroy the rest.
  • MAKE A GROCERY LIST: before going to the grocery store, list everything you need to buy. Better yet, keep a notebook on your kitchen counter so you can write down something you need whenever you notice you need it or it is almost gone. At the store, stick to the list and don't buy any unnecessary thing. Grocery lists saves you time AND money!!!
  • MAKE A MEAL CALENDAR: when you plan what you are going to cook during the week/month you know what to buy and won't be clueless when dinner time is coming up. Check out Weekly Menu Planning for more details on it.
  • GET GREEN: pack lunch to work/school on regular food containers (Tupperware) instead of using ziptop bags. Bring you own thermos/bottle with water/juice, instead of buying bottled water or boxed juice.
  • CAR: avoid using your car unless you have to. Maybe now would be a good time to become car free.
  • INDULGENCE BUDGET: Set a personal money that you and each person can use for personal indulgences: dinning out, movies, shopping or whatever you want. And once it's gone, it's gone. In my house, this money is "rollover". If you don't spend it all the current month, you have left over for next month and so on. My husband uses his personal money to increase his arsenal of knives (he's a chef). But his knives usually cost over $100, so that means he'll have to wait 2 months to get what he wants..
And last but not least:
  • AVOID DEBT: Spending less money than you make is essential to your financial security. Avoid debt, with the exception of buying a modest home or paying for education or other vital needs. If you are in debt, pay it off as quickly as possible.

I am not a financial expert, don't get me wrong, I do have my splurges here and there. But I learned very young how to handle my money and what I could do with it. Value your money. You work the whole week/month to get it and it is very important that you use it wisely. Be smart, Be realistic. Live Happy!


The Marshalls said...
This comment has been removed by the author.
The Marshalls said...

Thank you for this post. It is s important to live within our means. My husband read (and I am finishing reading) The Total Money MakeOver by Dave Ramsey, and we are changing the way we live our lives(financially). I think we are already doing good not having any debt and having a budget, but there is always a place for improvement right?!

Bianca and Anthony said...

Hello!! I'm not a mommy, but i'm always reading this blog! Thanks for the post Rebeca, I really like it. I'm so "pao dura". I like the idea of an "indulgence budget", so you can buy something that you want and not feel bad that you are spending money that should be used for something else.
I have a question for all of you out there: What you think is better, monthly or weekly grocery shopping? And what kind of things do you buy at regular groceries stores and what do you buy at Costco?
Thank you!!!

The Marshalls said...

Things like cleaning supplies, toiletries and rice and beans I like buying it at Sam's Club/Costco.( Sam's Club is good if you like buying brands, but if you are fine with less quality products you can find somethings cheaper at Winco for example) But things like produce and dairy I like buying it weekly at the local grocery store.

Price Family said...

We should make a post on what Bianca's questions. I could think of something and post here next week if nobody else already has that day.

Barbara said...

NOSSA BEKA...LOVED IT!!! We do about the same thing, but you had some intakes that were great. I loved all the advice and I have to say you really are a great mom, wife and person....Congrats my friend. I think sticking to your budget and living debt free is one of my biggest goals in life. There's really nothing like it in life :)
Thanks again!

Aline Carson said...

We've created a monthly budget not too long ago but we're having a hard time sticking to it. We found we have a lot more expenses than what we earn, we do have a ton of bills. Good thing I have a multi-talented husband who works his butt off and also has a business on the side.
A few months ago I started this woman's savings program at our bank in which I put away 125 reais every month. It's also a life insurance (in case I die) or if I get collon or breast cancer, etc. But if we ever need the money that we're putting away we can take it out of the bank but we have to pay like, 30% in taxes, so Chris was a little mad at me when I decided to do this without consulting him. Oops. But I still think it's good and it proves that we can always save some money, even if it's just a little tiny bit every month.
I like to go to the grocery store once a week for what we'll need during the week. Sometimes if I decide to make something other than I had planed, I ask Chris to grab a couple things on his way home from work. I also like to go to sams club for diapers, wipes, rice, beans, juice for the kids, powdered milk, snacks, laudry detergent, dishwasher soap, shampoo, and all that good stuff.

Paty said...

I think we created a monthly budget a while back...but I don't even remember what it was, oops! I like your post Beka, you have lots of great tips.

Although we don't have an official budget, we usually don't spend too much. I think my worst spending is at Walmart where I end up buying a lot of our groceries and a few extras. We don't really have any debt aside from our house now. If we want something we pay cash for it. If we don't have enough, we'll wait, and if it's a must, it's needed right away, and it's a major purchase we'll get a loan but usually pay it off in record time cause we do not like debt.

We've assigned a specific amount of money that automatically is transferred to a savings, because it's always nice to have money aside for emergencies.

If we go out to eat, we usually stick to places that are cheap like Cafe Rio, 5 buck pizza, In & Out, etc. We do go to sit down restaurants but not too often.

Our vehicle is paid for, we always buy used vehicles so we can pay cash for them and not have a car payment. My husband has a company truck and cell phone so that saves us money too.

I think as mom's we spend a lot of money on our children. I for example would rather buy something for my girls than for me. However, when I buy clothes for my girls I try to stick to really good sales such as the 2.99 sales at The Children's Place.

Again, thank you for your post Beka, I think it's very helpful. I'm definetely going to try and stick to a budget for my groceries, because I feel that's one way for me to contribute to the household as a stay-at-home mom.

Jennifer and Shay said...

I loved this post.This is something we are going through right now, setting up a budget. My husband is the only one working right now,and he found out a couple of weeks ago that he is getting laid -off at the end of the month..scary! But he's been looking for something else and it seems we'll be fine. I loved the idea of this blog, because for sure being a mom is not easy, and it's nice having a place to vent!

Liesl said...

I love budgets, then I don't have to constantly worry about if we can or can't afford things, I already know. My problem is that for us it seems like things change are changing every month for us lately so we have to adjust our budget every month! It's getting really frustrating. New baby, new house, new dog, new health issue...and so on! Hopefully things will calm down for us now! Thanks for the post, it reminded me that it's time to go look at this months budget and see how we've done this month :)

Price Family said...

Thank you girls, I enjoyed writing this post.

Liesl, you said it really well! I do budgets because I dont want to worry about what I can afford or cant. That's why budgets are so good!!!

I just wanted to add something. Have you heard of "the necessity is the mother of invention"???
WE started budgets in our house when we realized we werent having enough money to pay everything..So we had to review all our expenses and see where our money was going to. Since then, we have sticked to it and things seems a lot more in control.
It's never to late to start your budget and start saving!! :)

Trevor, Kika, Olivia said...

thank you Becca, this was great! Trevor is great at saving, sometimes TOO great, hahaha I like to splurge a little more. We have no debt, which makes me so happy! Saving is always important :)