As you may have read on here before, we are a family who, like many others, live on a budget. We have recently changed our budgeting ways mostly due to the fact that we wanted healthier food options on our menu. (We plan a weekly dinner menu.) Let’s just face it; it costs more to eat healthier food. That isn’t to say that the most expensive items or organic items are the healthiest, it just means that I can’t purchase healthy food for the same price as I can typical boxed dinners. So instead of allowing ourselves $400 a month to cover everything but gasoline and utilities, we now allow ourselves $700 a month to cover everything but utilities. That $700 covers gasoline, groceries, prescriptions, clothing, pet costs, household items, etc.
I know, $700 a month sounds like a lot, but when you start purchasing local fruits, veggies, honey and eggs. And then go to the store to purchase organic fair trade flour, sugar, corn meal, etc. your grocery expenses go up. To purchase a gallon of organic locally processed milk it’s $8. Four sticks of organic butter is $4. A 5-LB bag of fair trade flour is $4.59. And to purchase local pastured eggs its $4 per dozen. It just costs more. Making a loaf of bread from scratch or pizza from scratch can cost more than the ones you can easily purchase at the grocery store too. It just costs more to eat healthier. At the end of the month, usually the last week, depending on how “good” we’ve been, we might have to resort to purchasing regular milk at $2.50 a gallon and margarine at $.99, but that’s OK. At least we’re eating healthier most of the month and we’re sticking to the budget we’ve set for ourselves.
I want to add an insert here to say that this is a flexible budget for our family. This month for instance, we purchased our new digital converter boxes and had an unexpected vet visit with medication and still stayed within our budget. It’s flexible and if there’s extra money left over it can go into savings at the end of the month.
How did we come up with this budget plan? In planning our budget we first wrote down our monthly income in one column and all of our monthly expenses (utilities, student loan, car loan, car insurance, taxes, and cc/savings) in another column. *Since Travis is considered self-employed we pay self-employment taxes each month. And yes, we added a savings row so we could begin putting a little money into our savings account each month. Beside each utility I inserted what the average cost is for us. And beside the others I inserted the regular payment or (in the case of the cc/savings) what I want to put toward that each month. What we had left over was $700, which is enough to fund our “living expenses” for one month.
How we put this into practice: Before starting this we saved up the $700 estimated monthly living expense. At the beginning of the month we took out the $700 in cash that we had saved the month prior. Taking the money out and turning it into cash helps ensure that we don’t spend more than what we want to spend and are able to control the money inside our account better (so we don’t dive into the savings money). (It helps us ration the money if we get some larger bills like $50s, that way we are aware of when we have spent $50 at a time and don’t run out before the end of the month.) Then our paychecks are put in the bank to cover our utilities, loan payments, etc. and what is left over? $700 which would stay in the bank until the beginning of the next month and would be turned into cash to serve as our living expenses for the next month. (Hopefully that didn’t sound too confusing.) The amount left over at the end of the month will vary slightly as utilities vary from month to month, but it’s always something we CAN live off of.
For us this budget has helped ensure that we set aside money for what we really want to set aside money for. When we got into financial trouble last April we reacted quickly by putting our debt onto an interest free credit card and giving ourselves a very strict budget. It’s served us well, but was hard to keep. This is a more realistic goal for our family and it still allows us to pay off our debt before any interest begins to accrue. We will make our final payment in April on the cc and once it’s paid off we will add the money that we were putting toward that to our savings fund. (In case you weren’t a frequent reader last April when taxes were due, we were hit pretty hard. We assumed self-employment taxes were 7.1% (like employment tax), but it’s 15.35% and we had an unexpected out of network medical expense on top of that. We went from having no debt to being almost $9,000 in debt. So, as you can image, to be debt free again (other than Travis’ student loan and our car payment) is very exciting.)
*On a side note I would like to say that we turned all our insurance/hospital/doctor correspondence over to our insurance agent last week and we got three reimbursement checks from the company in the mail this week. Our health insurance company did over charge us for the miscarriage. (Of course, it still cost us a lot more than it should have (IMO). It was almost the cost of birthing a baby in network!)
Well, that’s our budget. It allows us freedom yet accomplishes it’s task. What works for your family?