Tuesday, September 27, 2011

Our Budget

I talk often about how my husband and I are on a written budget and are trying to pay off debt. I wanted to address our budget more specifically for those interested. Most of our budgeting ideas came from the Dave Ramsey Show. Dave is a financial adviser. You can check out his website for yourself.

The first full year we were married, we attempted to do a watered-down version of Dave's budgeting system. We (my husband) wrote down our expenditures and our sources of income. We found out exactly how much debt we were in and compared that with what we made each month. We wrote down our "dreams" (purposely using that word here because they weren't actual goals..they were dreams at this point) of what we wanted to spend in each category of life.

*Side note here. It's important to know who in the marriage is the detail oriented person. Usually one of the two of you are more detailed than the other. Luckily, my husband is this person. He is the one that put together our budget. BUT, it's very important to see that we AGREED on this budget he wrote out. I argued for some changes and he argued for some changes and then we agreed on a final budget. One major argument was with clothing money. It took a number of months to get this worked out. I continually over-spent (which can be fixed with the envelope system that we initiated later...see below) in the clothing category. He finally realized that the budget was too low and we agreed to a much higher amount for clothing per month.You can read more about my emotional spending habits here.

Back to the budget. So the watered-down version left us going over our vision each month in multiple categories. If you don't actually add up the amount of money you are spending, each time you spend it...you easily wind up over-spending at the end of the month. So for each month in 2010 we overspent.

We started to realize this wasn't working at the end of 2010. This is when we turned to Dave Ramsey's envelope system. I'll tell you we saved 500$ in the first month we used the system. The envelope system is basically you putting actual dollars into real envelopes at the beginning of each month. For example, we put 100$ into our shared "fun" envelope at the beginning of each month. My husband and I actually have 3 "fun" envelopes. We put money into "Karl's Fun" envelope, "Lindsey's Fun" envelope, and into a shared "Fun" envelope. Yes, we have about 15 envelopes we put money into each month. It's a lot of envelopes. I am able to reach into my personal fun money whenever I want. If I wanted to eat out during the day, this would come out of my fun envelope. If Karl and I wanted to go on a date, that would come out of our shared envelope. The trick is, that when the envelope is out of money...you stop spending money.

There are some down sides to this plan. Someone does have to write out the budget, that can be time consuming. You and your spouse have to agree on the budget. That can be argument-inducing and difficult. But, I promise it's worth it. Having conversations about money that don't end with crying and leaving the room is healthy for couples to learn how to do. The funny thing is that the shared goal (of paying off debt) really unites you as a couple. It may not happen as quickly to all couples. Some couples are in a world of hurt related to money. That conversation is for a different post though. For now, suffice it to say that this plan works.We have had to make some difficult decisions about our fiances. We may run out of grocery money at the end of the month and have to live on leftovers for the last 3 days of the month. We did have a month where I thought we had about 80$ left in the grocery budget. When I opened the envelope I found only 20$ left. We wound up eating pasta and beans the rest of the week.

There are so many perks to this plan. One is that you and your spouse will be on the same page about money. When Karl and I first got married, he would confront me every time I came home from shopping. We got into an argument about me buying socks! Now that we have an agreed upon budget, it doesn't bother him to see me come home with shopping bags AND he doesn't interrogate me about what I bought. He is happy that I found something I wanted, because he knows I only spent what was in my envelope. Also, we save a lot of money. This money goes towards paying off our debt. We are excited as we look forward to getting out of debt and begin to build wealth. Third, this plan has changed our perspective about finances and financial decisions. When you know you only have 100$ to spend, you treat your money differently. You tell friends that you can't go out to eat. You hold off on something you think you WANT in case there is something you NEED at the end of the month. I'll write more in other posts about our money decisions, but this is a basic description of our budget system.

Goodbye Cats - Hello Farm

During graduate school I thought I would be lonely after moving to a different state. So, I took 2 cats with me. They were brother and sister. I named them Bella and Oscar. They were darling cats...until we got them de-clawed and spay/neutered. Shortly after the surgery they began peeing everywhere. I was shocked and searched everywhere to find out what I should do. We tried many strategies for getting them to pee in the litter box.

Fast forward 3 years. After seeing a few vets and trying lots of tactics I caught Bella peeing on my living room rug in front of me *in our brand new house*. It was horrifying. You know that smell doesn't leave the house. My hubby and I made the tough decision to put the cats in a small storage room in the basement...it had a window and shelves to jump on. We played with them and spent time with them, but we both knew the situation was dire. After about 8 months of them living in their "cell" and talking it over with the vet, we decided it was time to move them out of the house. Luckily my husband's parents had a farm where the cats could try and make a new life.

This past weekend we took the cats to the farm. I anticipated a lot of emotions running through me. I was worried they would have a hard time adjusting. I was worried they would be attacked by other animals. I was worried I'd never see them again.

To my amazement the cats liked the barn. I was shocked to see how well the transition went. It was as if the cats were meant to be in the barn. They were a bit nervous at first. The nervousness all started to melt away as they began to smell everything. They were excited to roll in the hay. They were so happy to be out of their "cell" and in nature. They finally had room to run and new things to do.

It was obvious the cats should have been taken there sooner. I'm so happy today that the cats are adjusting and that they aren't stuck in our little room any more!

Monday, September 26, 2011

The Big Fish - The Job That Got Away

During the few months I was working part time, I was looking for full time work. I had actually been helping out a few hours a week at an office where a position became available. I applied for the job. The strange thing was that they published the salary in the ad for the position. I thought that I would be a likely candidate for the job since I had made connections in the office. I was also excited because of the amazingly high salary the position was offering. It was a government job with a 60,000$/year income. I was very nervous for the interview, but my husband helped me prepare by quizzing me nightly with interview questions. I did some research as well. I could continue talking about how I prepared for my interview, but this post is not about preparations for an interview.

This post is really about my greed. During my interview preparations and the week following the interview I started to drift in perspective. I started to dream about all the amazing things we could buy with so much extra income. It would have been a significant jump in income, from my low paying (10$/hr) part time gig to this huge salary. I started to think about how I deserved such a great paying job since I have a graduate degree. I reasoned that my hard work in grad school would all be worth it, if I got this job. I imagined what an awesome jump this job would lead to in my career path. There would be no where to go but up... in income after this job. 

I thought about how I would "need" a new wardrobe. After all, someone that gets paid so much money should dress like they get paid so much money. Of course, I would be "reasonable"...maybe spend 500$-1000$ on new clothes over the course of 3 months. I started telling family how fast we would pay off debt if I got this job. Which is interesting considering I was coming up with the idea to spend so much of the extra income on things we didn't need.

I also experienced guilt. I thought about how fast we would pay off debt and how it wouldn't be much of a struggle. How would I counsel others, who were struggling to pay off their debt, when I wasn't sacrificing at all? Since all my friends and family know we are on a budget, what would they think of my new clothes or new purchases of nice things in our home..while we still had debt to pay off?

All this happened in just the few weeks that I studied for my interview and while waiting to hear back if I got the job. What a tremendous shift in thinking. Before I heard about the job...and the salary...I was so set on sticking to our written budget, no matter what job I got. But, immediately I started imagining how I would spend the money on things I didn't need.

It all came crashing down when I didn't get offered the position. It was difficult to hear. I threw a small tantrum. I cried to my husband and to my friends. All my hopes about how I would spend the extra income were gone. My ideas about the extra clothes and nice things were ripped from my head.

What I was left with started to make me realize how greedy I had been. I was left with a wonderful home full of stuff, a wonderful husband, a fun part time job, time to talk to great friends, good health, time to workout, time to see my family, time to make great food, and still enough money from the part-time job to make extra payments each month. It's amazing how the thought of extra income morphed my hopes and dreams for a few weeks.

Here I am a few months later waiting to hear back about a new and exciting full time job. Luckily, I didn't know what the pay would be until the day of the interview. It's less, but that's not a problem because it will still be a significant amount to put towards extra payments! I also haven't made any plans for spending the extra income on things we don't need. Lesson learned.

Tuesday, September 20, 2011

Connecting by Communicating

My husband, Karl, and I have been married for 2.5 years now. We have learned a lot about how to handle each other thus far. One of the biggest challenges has been in the communication department. When we were first married, I would share problems with Karl. He would listen and attempt to solve the problem I had. I think many new husbands would agree this makes sense as a loving response. Of course a loving husband wants to "fix" any problems his new wife has. The thing is (and I think wives would agree), I'm not looking for a solution or action to be taken immediately. What I most want is for him to hear me. I want him to show me that he understands the emotions I am feeling. I want to feel connected with him over the issues I'm sharing.

Obviously we approached the marriage with two different perspectives on communication. The way that we started to tackle this problem (yes, with solution based action steps) was by communicating what we wanted and what we expected. We had conversations about our conversations. Slowly, we realized that we had very different perspectives on the matter. Karl started to ask me, "Am I suppose to listen or solve?" and I would respond, "This is the listening activity." Mind you, tone of voice matters here! These simple changes have begun to clear some things up for us.

I should point out I'm not always in need of a husband who "just" listens. Sometimes I want him to take action. Like when I say "Babe, can you take out the trash?" I can just hear him now, "This is a listening activity right?" (oh the joy he gets out of teasing me).

I encourage others to have conversations about their conversations. Think of it as a strategy for your marriage. Remember, you're on the same team as your significant other.

Gratituesday

I am thankful today for work. You see, I spent some time recently (from July-August) only working one part time job (and I don't have any kids). Let me back up though to better explain why I'm thankful for work.

In high school and college, I was on a warpath...to get things done. I filled every hour of every day with lots of activities, classes, organizational meetings, friend time, etc. I was busy. I thought I was doing something right by filling up every hour of the day. But as a senior in college, when I met my now husband, he had a calmer schedule. He didn't think it was a good idea to fill every hour of the day. Of course, I thought he was just under-achieving. But in fact he taught me a few things. One, it's just fine to get 8 hours of sleep. It's even healthy. Two, it's fine to enjoy a meal...you don't have to rush through the necessary items of the day so you can fit in even more "activities". Three, you don't have to fill your day in order to be successful in life. See, he had a much more balanced approach to his day, week, and life. I slowly started to allow myself to balance my activities more. This didn't happen in a few months. This happened over a few years (ok...maybe 4 years).

In December of last year I finished my thesis for graduate school. What a weight off my back that was. But that's another story for another post. Anyhow, in January this year we started a small business (in relationship matchmaking) that didn't make it. We spent from January to the end of June figuring out that we could not find insurance for a small matchmaking company. Then, with the close of the business, in July I found myself with only 20 hours a week of planned work at my part-time job as a crisis counselor. I realized I did not have a full day of work planned for me as in the past.

And what's worse, I did not feel like I was contributing to our household. Sure, I did some extra cleaning and cooking, but with just the two of us around there is only so much work to be done. I also struggled to make myself do any one thing. I struggled in ways I never thought I would. I wanted to contribute to paying off our debt (especially debt from my student loans), but I could not find a full time job or even a second part-time job. I got down on myself for racking up such major debts as graduate school loans and then not even being able to contribute in what I felt was a "worthwhile" way. For two months my emotions went from "why is this house not sparkling clean when I only work part time" to "I'm worthless for not contributing to our income". It was a slippery slope. I didn't allow myself to feel very good about our clean house since I thought that I should be making a lot of money with my graduate degree instead.

Having so much time on my hands wasn't all bad. There were good days and perks. I was able to work out on a regular basis and I felt great about my body. Which generally led to my husband and I being more intimate. We ate pretty healthy because I was able to prepare and cook healthy meals. I also had time to help babysit my cousins (a 9 and 7 year old and also triplets that are 2) and plan a 50th wedding anniversary for my grandparents.

But, back to why I am thankful for work. At the end of August a former co-worker called me and offered me a job. The job was supervising parental visits for parents that were in jeopardy of loosing their children. I have been working at the job for almost 1 month now. I enjoy being around the kids and I enjoy sharing parenting tips with struggling parents. I enjoy being with others in their moments of difficulty. I am now contributing to our fiances. The income from my second job goes 100% to extra debt payments. So today, on this fine Tuesday, I'm thankful to God for my second job (one that I didn't even have to apply for).

Monday, September 19, 2011

Just Do It

I've done it. I found the courage to start my own blog and share my thoughts with the world. I hope it's as interesting and practical and I imagined it would be.

Tonight my hubby is at the bar watching Monday night football. He does this because we choose not to pay for cable. We gave up cable about 5 months ago. At first it was painful. Every time I sat down to eat in the morning, I could not watch the news I was used to watching. Every time I went downstairs to workout on my treadmill, I had to deal with not having my recorded shows to watch. I actually felt myself longing for the Food network. I definitely went through withdraw symptoms. The first 30 days were the hardest. I was mad at the TV when I turned it on, and it gave me nothing but our local 2, 7, and 9 channels. When I came home for lunch in the past I could skip right to the show I wanted. I thought I was saving myself time by paying for cable and the DVR. Oh man, was I ever wrong.

Giving up cable allowed me to reclaim the time I usually spent watching TV. I wasn't a 3 hour-a-day kind of TV user, but it was amazing how often I craved my Food network after we cut the cord. I probably stumbled around like a zombie for short periods of time throughout the days after giving it up. I had to re-purpose my time.

Today, 5 months later, we have a lot of time on our hands that we didn't before. I can't say that I've re-purposed all my time for more practical things. However, I can say it's helped to change us. I hardly think about the TV (except in the morning at breakfast...I love watching the news). I wound up getting a Jillian Michaels workout video (6 pack abs). The workout is harder and faster than anything I did while watching TV. Also, my hubby watches less sports:) You can imagine all the extra things he has time for now...I know I can. I've barely mentioned all the extra money we save. Actually, it's going towards payment on our DEBT. It's great to know that our 80$/month cable bill is now going towards our debt!

Ladies and Gentlemen, thanks for reading my first post!