Back in September of 2011 I wrote about the first budget we put together. It was tough those first few months. We had to be tight and focused in order to make it work. We were learning about what each other valued and what we truly needed to buy for our household to work.
So what have we learned in the last 15 months? What things are we doing that make a budget work?
- One of the first things we decided was to live off of the previous month's income. This does two things: One, it allows me to have a tangible number to work with, and two, it gives us another buffer in case we forgot to add something to the month's budget. It took a lot of scrimping and focus to save that extra two to three thousand dollars in order to start, but it's definitely worth it.
- We are both involved in the budget. I'm the nerd between us and I tend to spend a lot of time tweaking the budget, colour coding the main categories, and figuring out how we can afford certain things. Brianna is the free spirit and she comes and looks through the budget when I have it pretty much finished. Usually she approves right off the bat (mainly because we talk about stuff every so often throughout the month as it comes up), but there's a few times she asks for more money in a category or we decide there's too much.
- We used the tax return to set aside for baby expenses. We didn't know if we were going to get pregnant in 2012 or not, but we decided that setting aside a thousand made sense. And I'm proud to report that the majority of the big baby items (nursery furniture, stroller, car seat, swing, and a few other things) were bought for that amount.
- We are able to cash flow (save up and pay for) medical expenses, car maintenance and various other things that needed to be done. For example, I had to get new contacts this summer and I had to save up for them. For two months I put what was necessary into the Vision category.
- Most of our expenses are able to be planned for. I am actually setting aside a small amount this year for Christmas Presents. I know that we have to get oil changes, so there's money being set aside for that.
- I also have an Undesignated category to catch the unexpected expenses. This, along with spending money for both of us, really helps.
- Okay, so the news you've been waiting for: We have paid off an incredible amount of debt this year! Lots of different reasons, but we were blessed with extra, and everything beyond our living expenses is going into our debt snowball. If everything goes as planned, we will be out of debt by the end of December 2013.
- Oh, and another key to keeping on track: Remembering that this money is not ours, that we are just stewards of it, and that God trusts us with it. It actually helps us to realize that we need to stick to a plan and keep our palms open. We tithe regularly and also sow into the kingdom with offerings above the 10%. We are strongly convicted that we need to continue giving while working on getting rid of the debt.
- Lastly, we've slacked some on sticking completely to our budget. It's easy to float things, while keeping track of what we spent into the next budget, but that is a bad habit to have. Eventually that will catch up to us. To solve this we have decided to use some of the extra money to pad our categories so that we don't spend over.
What have you accomplished this year? How do you budget? How do you live, yet pay off debt? We'd love to hear from you in the comments!
