Budgeting 101: Start Tracking

Let’s start the budgeting series!  We’ll just see where this goes, but I’m excited to get a discussion started.  Money is one of the toughest subjects for spouses to discuss (although, a practicing family counselor once told me that sex is the most common root reason for divorce, although couples won’t say it.)  Budgets are not an emotional issue, especially when you sit down to start one.

First, a budget needs to reflect your household’s needs and wants.  Figure out what you’re spending, RIGHT NOW.  Our favorite way to do this is mint.com.  It’s a completely free website that will link to your transactions, such as credit cards, checking and savings bank accounts, and large financial institutions like Charles Schwab, Morgan Stanley, and the like.  Track your spending for a month or two, and make sure to carefully label transactions.  If you go to the grocery store and spend $100, but $60 of that is spent on diapers and soap, label those dollars amounts appropriately within the transaction so you can see your true food cost for that trip, and the true cost of diapers and soap.  I normally log on once a week or so to label transactions and check to see which charges and checks have come through, and to make sure there are no bogus charges.  (We had some troubles with magazines and gym memberships earlier this year that would NOT stop charging us.  We worked it out, but I was glad I remembered to check and stay on top of things.)

I prefer to shop almost exclusively with plastic cards, so I can easily track my spending.  Paper money is too hard for me keep track of, and too difficult to handle in a store when I’m with my little ones.  If you’re concerned about the temptation of using a credit card to excess, use your debit card.  But this is just what works for me.  We have always paid off our credit card monthly, and debt has never been a temptation, so this works for us.

One you’ve tracked your purchases for a month or two, and your incomes, you’re ready to sit down and see what patterns come out.  How much do you spend on food, restaurants, gasoline, services like hair cuts and nails, utilities, etc.  How much do you spend on hobbies and charitable donations?  Remember, there is zero emotion in this process- you may wish you hadn’t spent $50 a week on cookies, but for right now that doesn’t matter.  You spent what you spent, and what you’re looking at right now is a base-line of what your family spends AND makes.

I’m going to talk more about tracking grocery purchases later, but for now we’ll just assume that all groceries are created equal and track your total expenses.  I’ll include farmer’s markets, co-ops, etc. in this category, but you can delineate however works best for you.

If wages and income are not salaried, or are regularly spent before being brought home, you might find some surprises in your income.  Here are some examples:

• With my piano studio let’s pretend I should be making $1,000 a month and plan my expenses accordingly.  However, when I look at my records I realize I’m only bringing home $600 a month on average due to cancellations.
• I work at a clothing store and based on my hours should be bringing home that same $1,000 per month, but am purchasing at LEAST a shirt every week and only bring home $700.
• I work nights at a grocery store and purchase dinner every night at the deli, and end up bringing home only $800.
• When my husband was at his previous employer, certain expenses could be taken out of his paycheck such as group purchase tickets to shows and games, postage for packages mailed by the mail room, etc.

Make sure you keep track of spending before AND after you bring your money home!

Just remember- nothing in this process right now is emotional.  You are only learning your true income and your true expenses.  If you spend $2,000 a month on fancy restaurant meals, so be it.  Know that expenses and income will vary throughout the year- you can update your budget later if you need to.  For example, utilities are traditionally lower in the summer (unless you regularly water your lawn, for example) and so I can normally budget at least $100 lower for utilities June through September or October.  If it’s easier for you to budget a yearly “average” number, and use a budget that allows unused dollars in a category to be included in the available budget for that category in the next month, that’s fine.  I prefer to update it when things change, so we can try and be as close to budget as possible every month.

Are you still with me?  Go, track your expenses, and next up: setting up the budget!

Budgeting….on a Budget

I’ve had this idea rolling around in my head, PROBABLY because my budget has been rolling around in my head more than usual lately.

I thought, if there was interest, we could do a little series on budgeting and household finances and stuff.  Yes?  No?  Major yawn?

I’m actually hoping it will be collaborative.  I’ve gotten stuck in our household budget- try as I might, I’m not seeing many more places to trim and squeeze.  And OH how I love to trim and squeeze.  You have no idea how much joy I get out of NOT purchasing and NOT shopping.  I loathe malls.  I detest parking lots.  And checkout clerks…well, I don’t carry cash with me for shopping, because that would increase my interaction with the clerks, and I already get a little ringing in my ears just swiping my card through the machine.  *

I’m not a people person, OK?

Over the last couple years I’ve developed a system that works quite well for my family finances- spreadsheets, websites, etc.  My husband and I are both accountants, and extreme spreadsheet geeks.  I adore spreadsheets as much as I…don’t adore the perky “Hello!  How can I help you today!  Are you finding everything OK!” girls.  You know exactly who I’m talking about, don’t you?

SO.  To start this party off.

What does your family do to save money?  Are you interested in learning more ways to shave down your budget?  How do you keep track of everything, or do you shut your eyes and *hope* every time you run your card through the machine?

*YES.  We pay off our balance every month.  I’m not about to pay double or triple my original balance to a credit card company!  Besides- if we pay off our balance every month, they send us a check once a year.  And who doesn’t love a nice fat check?

Thoughts on Dirt

Three years ago last April, I stood in line at a local plant nursery listening to the garden chatter around me in awe.  A man complained about clay soil, a women spoke knowingly of “amendments.”  She had a bagged product she used, it was “like magic” and turned her clay soil into something worthwhile.

I didn’t know what clay soil was.  I didn’t know what an “amendment” was.  You mean, you could add something to your dirt…and turn it into another kind of dirt?  I was going crazy trying to bite my tongue- what WAS it that you added?  How much?  How did you get it in?  How did you know you’d succeeded?  How did you know what kind of dirt it was to start with, and how did you know exactly what magic substance to add to fix it?  Oh, and when they started talking alkaline and acidic soil…they totally lost me.  Gardening must be an occupation reserved for the elite I thought: the knowledgeable, and those with vast quantities of disposable income to use on….dirt.

This was also before I knew that (ahem) you could plant a garden in your yard.  In your own dirt.  It didn’t have to come in a plastic sack.  Seriously, I had no idea vegetables could be grown in the ground.  It sounds so dumb to say that, I know.  Just what did I think farms were?  Obviously they were foreign places, with dirt much more exalted than what I walked on.

It’s funny how much I’ve learned the past few years.  I can honestly say that for the last 3 years,  I’ve spent at least 2 weeks every winter/spring spending HOURS daily poring over gardening books, blogs, how-to websites, you name it.  I’ve spent a week at a time studying companion planting, trap crops, and veggie rotations.  Year-round gardening, square-foot gardening, square-INCH gardening, gardens in pots, gardens in beds, gardens in buckets.  I’ve studied it all.  Wild foods, heirloom foods, genetically-modified foods.  And yet, every year, I find myself drawn back into my studies.  Some people drool over seed catalogs, I salivate over my library catalog.  (I’m pretty sure we have one of, if not THE best library system in the country.  I’ve been able to order every book I’ve ever looked for, to pick up in the “hold” section downtown.)

HOWEVER, I still don’t have a successful garden to show for all my work.  Last year was the bumper year for tomatillos and plums.  The year before, we had chard.  So, you know….if anyone was feeling intimidated about mad growing skills over here, don’t be.  Ha.

As I write this, my husband is outside wrestling (literally) with a large rototiller.  I thought I knew what clay soil was until I got here- we don’t even have soil, just CLAY.  The kids grab handfuls of it and mash it around to make balls to throw.  Clay and rocks is what we’re building our garden on.  Since I want wide paths for my wheelbarrow anyway, we’ve settled on keeping the clay for the paths, and we’ll cover it with a good-looking mulch.  (Nice thing about clay is that not many weeds grow in it!  But the ones that DO grow…sakes alive, are their root systems vicious.)

Veggies will be in 2 or 3 raised boxes, the clay hollowed out a foot or 2 and replaced with good garden soil.  Once my husband finishes rototilling, it should be easier to get the clay out of the box spaces.  At least we won’t need a pick axe!

We managed to dig out an 18-foot by 4-foot section along the driveway, that’s currently host to a dozen tomato plants, a border of bush beans, and a sprinkling of purple alyssum.  (I also sprinkled the alyssum in the gaps between the paver steps, hoping to soften the edges.  We kept the kids busy for an hour or so filling those gaps with dirt, cupful by cupful.)

Here’s hoping to a lush Fall garden!