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teachingmyown
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| Posted: March 18 2007 at 5:40pm | IP Logged
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On the More the Merrier forum, the food budget thread has been picked up again, which is great. I was hoping that we could have a discussion about money in general, spending, debt, budgeting, etc.
How do you all budget?
Do you use cash or credit?
Do you think through all purchases, or do you tend to spend first, think later?
Any resources you could share for getting out of debt, living within your means and controlling the urge to spend?
We have a pretty heavy debt load. It seems that every time we start to get out from under it, we hit a wall. And the worst part is that on the surface we don't have a lot to show for it. We do have a very nice house. But other than that, most of our furniture was either free or bought used, we don't take vacations, we don't have big tv's or stereo systems,etc. My computer is 9 yrs old. and so on.
When we try to budget and read the "experts" we find that we really don't have much to cut out. Just our bills and groceries and gas max out the paychecks each month.
We are now trying to get control and not use credit anymore. We are talking about each purchase and trying not to impulse spend.
One problem that I have is that I tend to internet shop when I am bored or unhappy. Now, this shopping consists of 99% looking and 1% buying, but I still spend before I have really made sure we can afford it. And I am not buying fancy clothes or toys or anything. I am buying clothes for the kids, or books for school, or organizational things to make life work better. The problem is, there is always something else we "need"!
I used to be good about hitting yard sales and consignment shops for clothes for the kids, now I look for store sales and buy new, at least for the oldest girl and boy. I do buy clothes on ebay.
I have been reading a guy named Dave Ramsey, who has a program called The Total Money Makeover. I am trying to get my dh on board so we can really turn things around. I can't even imagine how great it would be to not worry from month to month!
I do the money and it is hard to get a handle on it all. With seven kids, there is rarely a moment to think clearly, so I operate in "good enough to get by" mode most of the time and it is not serving us well.
Please chime in here and share your experiences, your successes and mistakes alike.
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In Christ,
Molly
wife to Court & mom to ds '91, dd '96, ds '97, dds '99, '01, '03, '06, and dss '07 and 01/20/11
Remembering Today
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JodieLyn
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| Posted: March 18 2007 at 6:03pm | IP Logged
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I think one of the most useful things I've heard lately is that before you start throwing additional money at the debt.. that you should put that money into savings until you have a $1000 emergency fund.. otherwise.. as you've said.. something will happen and you'll end up using the credit you've paid down to cover the "emergency".
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mrsgranola
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Molly, I've been reading and listening to Dave Ramsey since this past fall, as well. I love hearing those "I'm debt-free!" screams people call in with! I download his podcasts regularly.
We're doing lots to pay down debt but we aren't up to gazelle speed. Building a house was a real adventure and we have a great family home now but we also have to pay for this thing as fast as we can. ANd our van bit the dust in the summer so we got a full-size van. So we still have 2 car payments but dh's little truck will be paid for fairly soon, God-willing. I've been throwing every bit of overtime pay and tax refunds, etc. at debt. It feels really great to see those totals go down on my Quicken charts.
Oh, I was going to add this on the Food budget thread but it works here: I track everything on Quicken and this is my 14th year doing so. It really helps to see where the money is leaking. If we go out to eat, that's "dining" vs. "groceries", we have clothing categories for each person, a diaper category, etc. It's really easy to do this once you go thru the initial stages of developing the habit a while. SO I can easily do a quick report and see how much we've spent on eating out this past year vs. the year before that, etc. It can be scary, however! No room for denial... 
I really juggle our money to make it go further but I have alot to learn. We have increased our giving but not enough and we still waste too much on eating out, etc. I wish I could say I was as frugal as some of the great moms on these boards but I've been spoiled the last couple of years way too often. You all humble me back to reality!
JoAnna
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Mackfam
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Molly,
My husband and I have been struggling with these issues for a few years now. We haven't made it out of debt yet, but I do feel like we're moving in the right direction. Here's what we learned.
We both read and listened to Dave Ramsey's Total Money Makeover Plan, and agreed that this was a good plan to follow. He does suggest that you set up the $1000 emer saving first, but we found that was not enough to handle our family emergencies - so we bumped it to $1500.
We agreed to do the snowball thing with debt, and we only have one form of debt left  but we're still whittling away on it!
The biggest difference came when we drastically reformed our budget. My husband and I use Quicken to keep track of our money- we set up a brand new register in Quicken and named it "virtual savings" and in that register we set up little pots of money. You can google search on envelope system software and find lots of cool programs to buy to do this for you too.
Things like medical needs and insurance are no-brainers to save for on a monthly basis, but pets and home maintenance and car tags would constantly surprise us when they came up. We would freak out in June when it was time to buy school stuff! So we sat and brainstormed one night, and came up with every category we could think of. Then, after being paid, we would transfer money from checking to "virtual savings" in Quicken - not in real life. Our money was all still in our checking acct. - but in our Quicken program, we could see how saving $20-$50 a month in each of our categories was beginning to yield nice sums that help us when they are needed. We don't panic when the van needs new tires, because we have a category that we save for auto needs.
It has removed a lot of stress. The hardest part was figuring out how much we could afford to put in each category each paycheck - we were used to just getting paid, paying bills, and eeking by on whatever was left over. It also took a couple of months to adjust categories to be more realistic. But it has worked out nicely for us now!! We live within our means much better now. If we want or need something, it is either in the account in a category already saved for - OR NOT! And if it isn't we don't get it.
We use the debit card. I was worried about accountability for myself, but it was easier to use than cash. If you're out at a store, 80% of your purchases might be from grocery money, but the remaining 20% might come from somewhere else. It is easier for us to debit, and then work out the totals on our receipts at home later.
I hope this helps some. I should also mention that we really brought this into our prayer life. We began to include this intention specifically during our family rosary. I am convinced the Blessed Mother sent the Holy Spirit to illuminate our minds, provide fortitude and particularly wisdom for my husband. The fruit of these prayers has been this new budget which has helped us tremendously. I hope I explained it ok, and that perhaps it helps offer some ideas that you might be able to adapt to fit your needs. I empathize with your situation so much. I'll be praying for you and your husband.
Jennifer
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JodieLyn
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| Posted: March 18 2007 at 10:38pm | IP Logged
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Oh Jennifer I had to  I make "virtual" accounts on Quicken too.. actually each child has one.. which lets me keep track of things like birthday money :)
And I often have a line for money I need to save for something.. like car insurance.. I just put it in the checkbook when we have the money to go toward it and "post date" it.
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Jodie, wife to Dave
G-18, B-17, G-15, G-14, B-13, B-11, G-9, B-7, B-5, B-4
All men who have turned out worth anything have had the chief hand in their own education.
-Sir Walter Scott
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Dawnie
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My in-laws are taking a Dave Ramsey class and they LOVE it...they've been telling us all about it and gave us the CD's of his talks to listen to.
Here's what my in-laws told us:
*Before you get serious about paying off any debt, set up a $1000 emergency fund--also, DEFINE what an emergency is with your spouse.
*Don't use credit cards or debit cards
*Use cash to pay for things like groceries, gas, spending money, basically everything but the bills you have to mail in. Set up envelopes to hold the money you've set aside for those things. Set aside money money to "blow," if you regularly do that.
I really like the envelope system. We have a lot of trouble with going over-budget on groceries. Having cash to spend helps us keep track of how much we're spending. If we set aside $200 for groceries, if we're paying by check or debit card, then we have to go back and add up all the checks or debits to find out if we're staying on our budget or not. With the cash, you can see at a glance how much you've got left. The only thing I don't like about cash is that if you lose it, it's GONE. So we don't carry all of our cash on us...we just take what we anticipate we're spending to the store. We're looking at buying a safe to keep cash in.
We're doing okay on debt--the thing that saves us is getting a big fat tax return every year. Most years, it has gone to pay off a credit card debt, make a big furniture purchase, and/or buy school books for the next year. Oh, or pay the medical bills for a new baby.  This year, we're hoping to stop using the credit card and use next year's tax return for....whatever we want! Which will probably be a bigger car! We just realized that we can't squeeze another car seat into our minivan and will need a bigger car when the next baby comes along!
Dawn
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Visit my blog!Water Into Wine:Vino Per Tutto!
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teachingmom
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| Posted: March 19 2007 at 12:40am | IP Logged
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Just a few quick thoughts:
teachingmyown wrote:
| Do you use cash or credit? |
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Definitely credit. But with one very big caveat. We ALWAYS pay off the credit card bill in full every month. Even with a month of dh being unemployed, we were still able to avoid carrying credit card debt, thank God!
And we use credit cards that give us free stuff. I have an American Express card from Costco that earned us almost $250 cash back this past year. I also have a Visa that works on a points system that earns us gift cards for stores and restaurants. My old Visa earned gift cards for Toys R Us that I could either use or give as gifts for birthday parties to save money.
teachingmyown wrote:
| Any resources you could share for getting out of debt, living within your means and controlling the urge to spend? |
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Two resources: The book, The Wealthy Barber. And Michelle Singletary's "The Color of Money" column in the Washington Post.
teachingmyown wrote:
| When we try to budget and read the "experts" we find that we really don't have much to cut out. Just our bills and groceries and gas max out the paychecks each month. |
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I can completely identify with you here, Molly. No real ideas, just sympathy.
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JSchaaf
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| Posted: March 19 2007 at 1:35am | IP Logged
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I've heard good things about Dave Ramsey. I also like Mary Hunt's books. Her website is Debt Proof Living. I think the plan is similar to Mr. Ramsey's.
Jennifer
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SharonO
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Dawnie wrote:
We're doing okay on debt--the thing that saves us is getting a big fat tax return every year. Most years, it has gone to pay off a credit card debt, make a big furniture purchase, and/or buy school books for the next year. Oh, or pay the medical bills for a new baby. This year, we're hoping to stop using the credit card and use next year's tax return for....whatever we want! Which will probably be a bigger car! We just realized that we can't squeeze another car seat into our minivan and will need a bigger car when the next baby comes along!
Dawn |
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I love listening to Dave Ramsey too! We have been very fortunate to get large tax refunds each year and usually pay it toward the credit card debt. This year though, I am having my dh adjust his withholdings from work so we get that money DURING the year and will hopefully be able to avoid having to use the credit cards during our summer birthday season (5 out of 6 of us have a birthday in May, June, or July, plus mother's day & father's day) and Christmas season.
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Sharon in MO
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Becky Parker
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My husband is an accountant and very budget oriented. While this drives me crazy sometimes, I truly see that it is a blessing,as I am not! To help me stay within budget I have certain times of the year that I make big expenditures. For example, this month I will buy all the kids clothing for the summer. I start by going through the various catalogs we get, or looking on the internet. I make a list of what they need and what it costs, then I go shopping and try to find it all cheaper at local stores. (BUT, I have learned that it doesn't pay to buy too cheap as then the item doesn't last through all the boys it will be passed down to!) I do this again in September for the winter months. (Sometimes I can find items on sale now for winter. I just have to be careful that they will actually fit the child in 8 months!)
School is another big item. I try to order all my school books at the same time. This is always very pricey but it helps me to really see what I am spending. If I buy things as I need them, I don't keep track and I know I actually spend more.
I do big grocery shopping once a month and keep to a budget. If I can't afford an item for that month, we just don't get it. This is really hard for me. I actually have my husband give me a grocery check at the start of the month. Once the money from that check is gone, we're done buying groceries. (This may sound a little extreme, but please know it is something I asked for, not something that was imposed upon me by dh.)
Except for the groceries, we use credit for the other items I mentioned. But, as others have said, I don't put more on the card than we can pay off each month.
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Bridget
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We are trying NOT to get a big refund from now on. We want that money up front to throw at our debt. If you have no debt than you could invest or save it yourself. You would earn the interest instead of the IRS.
We do risk owing if Kevin gets any private contract work but it's no big deal if you plan for it.
We are cash only. We even have Dave Ramsey's nifty little envelope thingy. My spendthrift husband is much more careful about letting cash slip through his fingers than with the debit or credit card.
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Bridget, happily married to Kevin, mom to 8 on earth and a small army in heaven
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SharonO
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For those of you who use the cash only method: Where do you purchase your curriculum? Do you pay cash for this stuff also? I am torn between discipline of using only cash (when it's gone, it's gone) and the ease of tracking expenses when using the debit card. We use Microsoft Money and I was an accounting major in college. I can download the statements daily from my bank and keep everything balanced.
I love my debit card for the convenience, especially for paying for gas at the pump.
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Sharon in MO
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Bridget
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We use the debit card for PLANNED purchases online.
We use our receipts to track our expenses.
It is a pain to use cash at the gas pump. It's worth the extra effort to us. Our budget is too tight for errors.
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Bridget, happily married to Kevin, mom to 8 on earth and a small army in heaven
Our Magnum Opus
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teachingmyown
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More and more online stores let you pay with a virtual check. Amazon does this now, so the money comes out of your bank account. Rainbow Resource Center used to give a discount if you paid with cash, I am not sure if they still do.
I just got my dh a rewards credit card with a low credit limit. It will be his gas card only. That way we can see how much he is spending, budget for it and pay it off each month, all while earning rewards points.
I use Quicken. How do you reconcile if you have money in "virtual accounts"? I guess I should just play with it. I have used a program called Mvelopes to help me do the envelope system. I found it a little overwhelming though and too much extra work.
I really like Mary Hunt, too. I have had her book, The Complete Cheapskate for years. I have just never been able to convince my husband to track his spending.
We don't even pay taxes, other than state, out of the paycheck and still get a large refund, because our mortgage interest is so high!  That, and we keep having a new tax deduction every other year! 
I buy things sporadically, the opposite of Becky, and I really have no idea how much I am spending on clothes and school, especially when I use credit. I see the logic in getting it done in one coherent (that is hard for me!) shopping spree. But, then you don't get to see the UPS guy twice a month!
Okay, now that everyone knows why I have money trouble, I will go re-work my budget!
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In Christ,
Molly
wife to Court & mom to ds '91, dd '96, ds '97, dds '99, '01, '03, '06, and dss '07 and 01/20/11
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JodieLyn
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you don't make any of the virtual entries be "reconciled" that keeps them out of the equation when it's figuring out what's there... just like transactions that haven't cleared yet don't stop you from reconciling.
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Jodie, wife to Dave
G-18, B-17, G-15, G-14, B-13, B-11, G-9, B-7, B-5, B-4
All men who have turned out worth anything have had the chief hand in their own education.
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JenniferS
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Hi! We have been right where you are, and we have been slowly digging out of debt. Before I read Dave Ramsey, we did what he said no to do, we refinanced our house at a better rate and paid off all high interest credit cards. I probably would have dont things differently had I read The Total Money Makeover first. We do try to keep our emergency fund up, but with all of dh's surgeries in the past year, we had to dig into it. We also get a big tax return that, this year, we used to put in a woodburning stove because propane has gotten so expensive. I like the idea of getting that money up front instead of in a big return, but dh does not, so we get a giant tax return. In the past, we used it to pay off debt. From now on, we will not(hopefully). I do highly recommend Dave Ramsey. He mdae a lot of sense to me.
Oh...we also have no credit cards. Only a debit card for making curriculum purchases and any other online necessity. Otherwise we pay cash. Credit cards are too big of a temptation for us. We always intend to pay them off each month, but we end up not doing it.
Jen
Jen
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Paula in MN
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I used to pay for everything with cash.
Then I realized that I could keep my cash in the bank and earn interest on it. Meanwhile, I use my Visa card for EVERY purchase all month long and earn cash back on my purchases - sometimes double! I pay off my Visa at the end of every month. And when you think about it, what I'm paying off is a purchase from the month previous, so my money is actually sitting in the bank for two months.
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 Paula
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Cheryl
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teachingmyown wrote:
How do you all budget?
Do you use cash or credit?
Do you think through all purchases, or do you tend to spend first, think later?
Any resources you could share for getting out of debt, living within your means and controlling the urge to spend?
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We enter all of our receipts into Quicken. We have very detailed categories set up. Since we've been doing this for years, we are able to make projections on how much we think we'll spend on each category for the next year. That becomes our budget.
If our expenses exceed our income, then we need to cut something out, or my dh needs a salary increase.
We use credit for most purchases. We pay off the entire balance of the credit cards each month. Many cards offer a percentage of cash back for purchases.
I guess we think through most purchases. My dh and I each have a set amount of spending money for each year that we can spend on whatever we want without discussing it with each other. We both check where our spending is at because when it's gone, we don't get anymore until the next year.
I'm sorry I don't have any resources for getting out of debt. I think tracking everything you spend really helps you to live within your means because you see where every penny goes. It's surprising how the little things add up. A couple of years ago (I'm scared to say this) we were spending thousands of dollars on fast food. We used to spend almost $200/year on greeting cards. Now the dc make them. We ditched the diaper genie because the refills were outrageous. (I still don't want to give up my disposable nursing pads though.) My point is that you can look at all of the things you spend your money on and ask what the real necessities are.
For controlling the urge to spend I'd say stay out of Michael's and AC Moore. Don't ever go to Amazon.com. Wouldn't it be great if I'd take my own advice?
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Cheryl
Wife to Bob ('97)
Mom to Matthew 13, Joseph 11, Sarah 10, Rachel 6, Hannah almost 4 and Mary 1
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Courtney
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I'm with you, Cheryl. I've currently acting as treasurer for a group I belong to and everything is on Quicken. The cool thing about it is that it also gives you reminders of what bills are coming up to pay. I usually don't forget to pay my bills  , but last month I never got one from the electric company and I didn't realize it until I got a late notice! I've been gearing myself up to get all of our finances on quicken. I, too, could save lots if I'd stay away from Amazon!
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Courtney in Texas
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Rachel May
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We do cash only in the category where we have the most diffucult time controlling ourselves: household needs unrelated to food and personal spending.
We get the cash once a week and keep it in envelopes. There is a "Next Week" envelope to move the cash when we buy online. Often at the start of the week, I will take $20 and put it in an envelope marked "Christmas". Everything else is done with credit/debit cards and Bill tracks it by putting the receipts into MS Money. We occasionally carry credit debt, and it is the only debt we have.
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Rachel
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4Real Forums : Tea and Conversation
Topic: Can we talk money?
