Lean Mean Budget Queen
1. Make a Budget and Stick to It
Sounds obvious, doesn't it? You would be amazed at how many people make a budget, review their expenses, decide that they have $100 every month for "fun money," and go out one night and blow over $300 on eating out, a movie, a few drinks at a bar, maybe a cab ride home...you get the point. First, take a look at your income (AFTER TAXES). Then write down all of your bills. Just bills-not daily or weekly expenses. We'll get to that in a minute. If your bills are looking insanely high next to your take home income and you don't have a whole lot of wiggle room, look at what you can cut. Do you really need a smartphone with all the extra add-ons? Or a premium TV package with a bunch of movie channels? Or a car with an insanely high payment? I've actually had quite a few friends come to me for budget advice, and the very first thing I suggest they do is cut out the non-necessities. Instead of having premium TV channels, cut back to basic local stations, but get Netflix for a few bucks a month. Go to the library to borrow books and rent DVDs. Instead of having a smart phone with an expensive data plan every month, check out Virgin Mobile or other prepaid phone options. It's much cheaper to have internet at home, or browsing the web at the library than it is to have a data plan on your phone. If you are drowning from an insanely high car payment, take a good look at your daily life and determine what kind of car you REALLY need. Do you drive a gas-guzzling, expensive truck or SUV with high insurance rates and a high monthly payment? Look into selling your car and buying a cheaper (not necessarily smaller, if space is the issue) vehicle. Make a realistic grocery, gas, and other living expenses budget. Which brings me to my next point...
2. Meals, Meals, Meals
This one has been the biggest money saver for us; learn to cook if you don't already know how, and cook at home as much as possible. Make a commitment to not eat out at restaurants, or go through drive-thrus, or "pick up something on the way home from work." Fortunately for us, I love to cook and I love to make weekly meal plans. I also make meal plans based on what I have in my fridge and in my cabinets; for example, if I'm planning on making a Mexican meal one night, I'll throw the meat in the crockpot and make all the other essentials (guac, salsa, refried beans, etc). Then I'll try and incorporate leftovers into another meal for that week, changing one or two of the ingredients. Will and I recently purchased a Sam's Club membership, and while I don't do all of my grocery shopping there, it's nice to be able to buy some things in bulk. Cleaning products. Boneless, skinless chicken breasts (I can't even being to tell you how many healthy recipes there are for bs chicken breasts on cooking websites), baking necessities, etc. I have a Target Red Card, and I buy things at Target like canned goods, the juice we enjoy, milk, things that Sam's Club doesn't carry or things we don't need in bulk. I'm a stickler for quality produce, so I buy our fresh fruits and veggies at the nice grocery store across town. It's unbelievable how much money we save every week, not to mention by not eating out we generally eat very healthy meals. Lunch is the trickiest meal of the day for us; as a general rule, I don't make lunch for the whole family, and it's been tough for Will and I to avoid falling into the "want to go grab a quick salad at Panera?" trap. What works best for us is to keep the basics in the cupboard and fridge-wheat bread, PB&J, lunch meat, cheese, carrot and celery sticks, hummus, Wheat Thins, etc. That way we have plenty of options so that we're not eating the same thing every day, but we also don't feel the need to go out to eat in the afternoon.
3. Lay Your Debt Out On The Table, and Attack That Sucker
Look at all the debt you have; credit cards, medical bills, student loans, basically anything that can or should be paid off as soon as possible. I had a fairly high interest rate on my credit card when I graduated from college, so Will and I made it a point to get rid of that as soon as possible. Once the credit card debt was out of the way, we felt like we had some breathing room. I have a very low interest on my student loan, so while I would like to get rid of that particular debt within the next year or two, I'm not really stressing it because the monthly payment is very low and manageable and the interest rate is only 2.3%. We now have a policy of only using our credit card for emergencies, or for building credit (example: if we want to buy a big ticket item and have the money in our savings account, we will put the purchase on our credit card and then pay the whole amount off the next month). Pay off as much as you can every month, starting with whatever has the highest interest rate. It's not going to be easy, and it's not going to be fun. But I promise, not having financial concerns weighing on your mind every day is well worth the sacrifice.
4. Learn to Live Cheaply
I'm a huge fan of cosignment stores, especially for baby items. (Now, I will be the first to admit there are some things I would never consider buying used, like car seats). We have found perfectly good baby items for a fraction of the price you would find at Babies 'R Us or Buy Buy Baby, as well as clothes for Tony and Alessandra. Craigslist can be a great option if you're looking for gently used furniture, kitchen appliances, heck even a used car. As always, safety should come first, and for the love of everything holy make sure you're not falling victim to an online scam.
When I found out I was pregnant with Tony, Will and I sat down and discussed our wishes, expectations, and budget for having a baby. Both of us agreed that I would be a stay at home mom, and we would find a way to make it work. One thing that REALLY irritates me are the people who say, "well, it's impossible to live off of a military enlisted salary with a family-both parents need to work in order to survive!" I assure you, that's not true. It can be done. Will and I are living proof that it can be done, and trust me, if we were able to live debt-free off of an E-6 income in one of the highest cost of living areas in the country (Boston), then I have no doubt that other military personnel stationed in middle America or the South can make it work as well. However, you have to be willing to make sacrifices. We were a one-car family for a long time. As I mentioned before, we didn't go out to eat. We didn't own the newest, fanciest electronic gadgets. We didn't take expensive vacations, and we cut back on a lot of luxuries that we became accustomed to while living in Germany. For example, I stopped buying Chanel makeup and gave up my bi-weekly manicures and pedicures. Will no longer bought expensive bottles of his favorite whiskey, and he stopped buying video games. We just found other ways to have fun as a family, and honestly life became much more enjoyable. There was a beautiful state park about 15 minutes away from our town, and we would take a walk there every day. (It was particularly lovely in the fall). Our library offered half price admission tickets to all of the museums in the city, so we would use our weekly "fun money" to buy discounted tickets to the art museum, the science museum, the JFK museum, what have you, and we would hop on the T and spend the day in the city. Once we put Tony down for the night, Will and I would have a date night together (which usually included one of his favorite homemade meals, and a horror movie we rented. I know, we're weird like that!). There is something truly freeing knowing that you can live inexpensively and still have fun, without the burden of "I really want to do or buy xyz, but how in the world can we afford it?" looming over your head.
5. Make a Financial Goal, and Work Toward It
Is there a place in the world you've always wanted to visit? A home you desperately want to own one day? A degree you want to obtain? Once you have something in mind you want to work for and save for, I really think tackling debt and making a goal for saving a certain amount of money becomes easier, or at least more attainable. Will and I have always had the travel bug, and saving for and planning fabulous vacations was something that got me through his long and difficult deployments. Before he would leave, we would decide on a country (or countries) we wanted to visit, and I told him I would make it happen. I immediately began the task of making a vacation budget, and I cut monthly expenses and put extra money in our vacation fund while Will was deployed. I found out everything to know about the place(s) we wanted to visit, and I would plan the most exciting trip possible. It was fun, it gave me something to look forward to, and it made the deployment slightly easier, knowing that we had a "reward" to enjoy at the end. Find something you desperately want, whether it's a travel opportunity, an education, something tangible like a home, a car, or furniture, and work toward it. Ignore the temptations of daily life (for me, this means going to Target on a very limited basis, unless I'm there to grocery shop!), and keep reminding yourself of how satisfying it will be to not only be free from debt, but to have the ability to spend your money in a fun way.
6. Last, but Certainly Not Least...
Have an emergency savings account. Will and I have had one for years (which I have affectionately dubbed the "oh sh!t" fund). Bills will occasionally appear out of nowhere. Car repairs will need to be addressed at the worst possible time. For our family, it's the major move every 2-3 years. Even though the Army insists that they cover all moving costs (give me a moment to stop laughing hysterically!), things ALWAYS pop up. The need to stay in a hotel an extra week because our household goods shipment was delayed. The need to buy new furnishings, because the window treatments in every home we have ever lived in are completely different, and I don't want strangers seeing everything that's going on in our house. Meals that will be eaten in restaurants because a certain husband, who shall remain nameless, forgot for the umpteenth time to pack my pots, pans and kitchen utensils in the "ship ahead" shipment. You name it, it's happened for us, and we would have been screwed in so many ways if we didn't have an emergency e-fund. Yes, you CAN put expenses on a credit card, but let's be honest, your first priority won't be to pay that money off when you're living in a new place and unexpected expenses keep popping up. Better to be prepared for the worst, and hope for the best.
So, that's the financial advice that has worked extremely well for my family, and I hope it will be useful for you as well. Anything else to add that I may have forgotten? I'd love to hear from you! I would also like to leave you with a bit of wisdom I picked up years ago from a Desperate Housewives episode (you can shoot me later). Gabby and Carlos had just lost their fortune, and they were coming to the realization that their lifestyle was going to change drastically. Carlos was particularly depressed about this state of affairs, and he said to Gabby, "I never thought I would be poor at this point in my life." Gabby replied, "I've been broke many times, but I've never been poor. Poor is a state of mind." I agree completely. When I graduated college and I was, shall we say, lacking funds, it was easy to fall into the trap of "this is miserable, I can't do anything without counting every single penny, when in the world am I going to get out of this financial rut?" mentality. I had to constantly remind myself to step back and look at all the things I DID have. My health. A man who loved dearly, and treated me like gold. A loving family. Options. Yes, I had options, even if I didn't particularly like them. I wasn't lost, I wasn't broken, and I certainly wasn't poor. I was very blessed, and just because I was going through a period of financial difficulty didn't mean my life wasn't beautiful in a thousand other ways. Once I came to terms that my situation was temporary, things began to look up and I was able to move forward.