With the economy the way it is, Steve and I have rehashed our budget over and over the past few months. When Steve was laid off from Pemstar in May of 2005, we jumped on the budgeting bandwagon to make the most of our dollars. Since then, we've taken a seminar at our church called Good Sense, read hundreds of money saving articles, clipped coupons, stretched our dollar, and learned to be good stewards of our money. When we discovered that I was pregnant, once again we rehashed our budget so that I could return to work part-time.
Now that Steve is in graduate school and has cut back his hours at work, we've again revamped our budget.
So how much can we really cut back? We've trimmed our budget quite a bit, but we still have more wiggle room and areas that we can improve on. In these past few years, we've been able to pay off my student loans early, paid off both of our cars early, put almost 20% down on our new house, have 2 months of income in savings put away (our next goal is to work that up to 3-6 months), and have started a college fund for Amaya.
I've wanted to write this post for quite some time, because a lot of my co-workers wonder how we do it - both working only part-time. While we're nowhere near close to being the next Dave Ramsey, we've talked about our finances and made a plan that's relatively easy for us to follow.
Shortly after we got married, we spent a weekend going over goals for our marriage. Relational, spiritual, financial etc. goals. Fortunately, Steve and I are - for the most part - savers. If one of us had been a saver and the other a spender, we would have had more difficulty. But, for the most part, Steve and I were on the same page with our financial goals and spending plan.
Here are some of our best money saving tips:
Tithing: Our goal is sacrificial giving. Whatever that ends up being - 5%, 10%, 20%, 90% of our income. Our giving doesn't stop when we've hit 10% of our monthly income. Our giving should never have limits.
Saving: Our goal is to save 3-6 months of income. Many financial experts are leaning more to 6 months of disposable income in case of job lay-offs, health issues, etc.
Retirement: Obviously, a no-brainer here. Our pastor told us once that you can take out a loan for your children's college, but you can't take out a loan for retirement.
College: Amaya has a 529 account already in place. We contribute what we can, when we can. It's not as high of a priority as the aforementioned retirement, but it's still a category in our budget. (and since she's BRILLIANT - she'll of course, get a full ride - ha, ha!)
Mad Money: Steve and I give ourselves a certain amount of money to spend each month, at our own discretion. No questions asked. We've frequently gone over our allotments in this category, so now we're withdrawing the money in cash and once it's gone - it's gone.
Car Maintenance: We set aside money for unexpected maintenance and regular tune-ups, oil changes etc.
Internet: With Steve in school, we've really needed to have internet service. This is also a great way to save money because we can forego the need for a newspaper - all the news we could ever want is on the internet. Also, we can keep in contact with family members easier via e-mail, I do quite a few searches to receive free coupons, etc, and we pay almost all our bills online.
Cell Phones: This is an area where we are going to cut back. We're currently on a family plan and have already received a significant discount through Mayo, but I don't use my cell phone very often - maybe once or twice a MONTH! So, we're looking at changing plans to switch our cell phones to pay by the minute. We'll save about (35 dollars a month, 420 dollars a year).
Clothing: I NEVER buy clothes that aren't on sale. I used to work in retail and the mark up on clothes is ASTRONOMICAL! Unfortunately, I LOVE CLOTHES - especially cute little girlie outfits for Amaya. I've learned to take advantage of coupons and special sales and often times will pay about 50% less than the original price. I also take advantage of garage sales. I bought quite a few clothes for Amaya and when she spits up on them or spills food that stains, I don't stress out about her messing up a 25 cent shirt instead of a $20 shirt. And if I really didn't like the outfit, or it had stains on it, I can always re-sell it or use it as a dust rag. (50 dollars a month, 600 dollars a year.) I also have a very generous sister-in-law and sister who loan me clothes. Just last night, I got a huge bag of clothes that still have plenty of use in them!
Entertainment: Steve and I have ALWAYS gone over budget in this category. We love going out to eat, getting take-out and watching a movie, going to a movie, going up to the cities, etc. This year we've again given ourselves the money in CASH and once it's gone, it's gone. We take advantage of both of our parents for babysitting and will go out to eat where we have coupons and then go to a movie. We discovered the LIBRARY is an amazing resource! Here's an example:
Movie Ticket for 2 - $14
Cheap: Renting a movie from Hollywood Video for 5 days - $5
Cheaper: Red Box - rent a movie for 1 day - $1
Cheapest: Rent a movie from the library - FREE!! (We've saved 20 dollars a month/240 dollars a year!)
All three of us LOVE books. We've used the library quite a bit to pick up new releases, board books for Amaya, and even CDs. My mom and sister are also avid readers, so we exchange books. I feel bad because I really don't contribute anything other than Karen Kingsbury books, but I'm glad that they are willing to share with me. My mom also shares her puzzles, so we're all set - free movies, books, and puzzles - who can be bored?
Baby: I NEVER spend full price on diapers or wipes. I've signed up on enough websites that I receive a steady quantity of coupons for diapers and wipes. (10 dollars in savings per month, 120 dollars in savings per year). Eventually, get Amaya potty-trained - (40 dollars in savings per month, 480 dollars in savings per year!) We also take advantage of the Mayo Classifieds and garage sales when we buy things for Amaya and ourselves.
Mayo Classifieds:
Changing Table $20 (50-150 dollars in savings)
Toy Organizer $20 (20 dollars in savings)
Banister Guard $15 (33 dollars in savings)
Garage Sales:
Exersaucer $20 (40 dollars in savings)
Toys anywhere from 25 cents to 5 dollars (300 hundred dollars in savings)
It also helps to network and ask around. I received a Boppy Pillow, a Bottle Organizer, and a Bumbo seat for FREE from my sister-in-law who received it for FREE from her friend and now my sister is going to be able to use them. (75 dollars in savings)
Gas: When gas was rising to almost 4 bucks a gallon, we had no choice but to adjust. Now, we've slimmed this category down a little, but not by much because of Steve's commute up to the cities once a week. Go to gasbuddy.com for updates on the lowest gas prices in your area.
Gifts: We are fortunate to have a large extended family, but sometimes it gets a little overwhelming to buy presents for everyone, especially around the holidays. We budget for Christmas throughout the year, and I buy presents in advance when I can use coupons or special sales. (25 dollars in savings, 300 dollars in savings per year).
Groceries: CLIP COUPONS! It's a lot of work and sometimes not really worth it, but I can usually shave 3-7 dollars off of our grocery bill a week. (156-364 dollars in savings per year). I won't buy something just because I have a coupon for it. I will plan our meals around my coupons and then if there is another brand that is cheaper, I won't use my coupon. Meal planning has been a true money saver. I get frustrated when I have to buy something special just for one recipe, so I really try to use special ingredients for more than one meal. We're also going to be cutting out POP! (I'm down to one can a day! Once our stash is gone - it's gone!) (28 dollars in savings per month, 336 dollars in savings per year). I also try to buy as much of the generic brand as I can. There are some things that I just can't buy generic - (e.g. KLEENEX) so you just have to try it out and see. We can usually shave about (40 dollars in savings per month, 480 dollars in savings per year) buy choosing generic foods without skimping on flavor and nutrients.
Hair: Three years ago, we bought a hair clipper so that I could cut Steve's hair. (I think I do a pretty good job.) I've also been going to Great Clips and use their coupons to get a 6-8 dollar haircut every two months or so. (25 dollars in savings per month, 300 dollars in savings per year).
Home Maintenance: For our birthdays, Christmas etc. we'll frequently ask for things that we can use for the house. For instance, towels, sheets, kitchen gadgets, gift certificates to Home Depot, Menards, etc. Otherwise, we prioritize what needs to be done for our house and set aside money each month. This month we saved 400-600 dollars! We've been wanting to get additional seating in our living room - either a love seat, chair, or couch. Unfortunately, we priced them and didn't quite have the money to buy something. My mom just got a new couch and offered to give us their old one. YAHOO! We bought a slipcover at Wal-Mart for $45 (Of course, on CLEARANCE) and voila - extra seating in our living room for very little cost. Thanks Mom and Dad!
Medical/Dental/Vision: We are very fortunate to have great health insurance and hope to never take this for granted. We still set aside a certain amount of money per month to cover anything unforeseen.
Heating: During the day, we get quite a bit of sunshine and warmth to our living room, so I try to keep the thermostat down and layer extra clothing. Pregnancy was the cheapest thing for our heating bills. We cranked down the heat to 62 at night and I was still plenty warm. :-)
Phone: We no longer have long distance included on our phone bill. We bought a phone card and now use that for long distance, and since I really only call my sister and chat for a few hours a month, we won't use up the card for awhile. We still have voice-mail and caller ID which we could get rid of to save additional money, but I like knowing who's on the phone before I pick up! :) (sorry telemarketers) (20 dollars in savings per month, 240 dollars in savings per year).
Water/Electric: When we moved into our house, we bought an energy efficient washer and dryer. I'm not sure how much we're saving month to month, but we did get a 75 dollar rebate just for going green. I've been wanting to cut back on the length of my showers - it's about 15 minutes, so I'm thinking about setting a timer to save on our water usage. I love taking baths, so I'm not sure I could get rid of those, but again - if need be I could.
Insurance: We can get everything covered: house, cars, and personal items (for what has been averaging lately) around 95 - 100 dollars per month.
Vacation/Trips: We set aside money each month so that we can get away. While our vacations aren't to exotic places, we still have fun. We've discovered how to vacation on a low budget - tent camping has really helped and it's fun! (Although we haven't camped with a baby yet, so we'll find out this summer how fun it really is!) Steve got a camp stove for his birthday several years ago, so we're able to eat relatively cheap too. This year, we're thinking of going to the Black Hills, Wisconsin Dells, or Chicago.
Garbage: We have the smallest garbage container as possible, with only occasional overflow. We try to recycle as much as we can to cut down on the garbage which helps slim our budget and is good for the environment. (10 dollars a month, 120 dollars a year).
There you go... nearly $5000 dollars slimmed down from our budget. We revisit our budget every few months just to make sure we're staying on track and adjust if our priorities change. It continues to be a work in progress, but this is what has worked for us. Hope this helps!