first, let's define "necessities": food, shelter, clothing. there are varying degrees of all of those, but keep in mind that the most basic forms are the necessary ones. that being said, i will address how we plan for all of those, and some ways we save.
"food" encompasses groceries and eating out. eating out is not a necessity, but i will include it in this post anyway.
we spend about $190/month on groceries, which for us includes household products such as toilet paper, etc., and personal products, such as toothpaste, etc. jake eats the same as two adults. so this really is a pretty low number (i am not trying to be prideful here; it began out of necessity, but now it's fun to see what we can get on that amount!). how do we do it? i only grocery shop every other week. that is the only time i enter a grocery store. we recently got a chest freezer so this next month will be my first attempt at once-a-month shopping. the less times you enter the store, the less you are exposed to temptations at the check out, or even walking the aisles. so the whole going to the store every day to get stuff for supper? definitely not the way to save money (yes, this does take planning. but trust me--you end up saving tons of time in the long run, too). i go in with a list, and only get what's on the list. i keep a tally of what i'm spending along the way (i know some can do it mentally, but i literally make a tally mark on my list -- this is vital, in my opinion!), so if i find i'm way under budget, i may pick up a few extras for fun. i try to not spend the entire amount every time, in case something comes up and we do have to run to the store between shopping trips -- but those times are few and far between. whenever i have it on my list to pick up dry goods, i get more than i need. that way i have a mini-stockpile in case something were to prevent me from keeping to my shopping schedule. we store the extras in our basement (regardless of where you live, you likely have room for a stockpile of your own...although it may require some decluttering, and that is a subject for a whole other post!). this way, we never fully run out of food. we pull from the stockpile to fill our pantry. so when we are out of something in the stockpile, that's when we put it on the list; not when we are completely out of it altogether. i coupon a little bit for some of our household and personal supplies. you can see some of my previous posts (sorry, i don't know how to link them :/) for more info on that. we use un-paper towels that i bought on etsy instead of regular paper towels. these can be washed and reused 40 bazillion times, rather than having to buy paper towels constantly. we do end up purchasing paper towels, too, but we rarely use them. i meet my mom at costco every now and then for things we can buy in bulk, like toilet paper and coffee and other random things. we do buy freezer bags, because i buy meat in the larger quantities, then split it up and freeze it. but as for regular ziploc bags, we don't use them. we also bought reusable sandwich bags on etsy, and wash them as needed. as for cleaning supplies: i plan to begin making my own as i run out of those in my couponing stockpile. that goes for laundry detergent too. we do not use dryer sheets. we only use our dryer for sheets and towels anyway - and that's only until sweetheart puts me up a clothesline - but we have wool dryer balls (guess where they're from - etsy) that cut down on dryer time (also saving on energy costs!). so i think that addresses everything grocery-wise.
right now our budget for eating out is $20/month. that is so super duper low. and no, it's not always fun. but cooking at home is so much cheaper and healthier! that basically allows for a meal out every month, or maybe two fast food meals every month. eating out technically falls into our "everything else" section of budget categories (see "our freaking budget", a finance blog i previously suggested), so we do allow ourselves a little extra some months. but for the most part we rarely eat meals out. there is a little bit of genius that goes into our plan: whenever any parent or grandparent offers to eat a meal out together, take it! they feel bad because they think we're way poor (when really we are only slightly poor, but way cheap). don't tell them our plan ;)
and that's it for food. you now know how much we budget for it, and how we save. as always, any questions are welcome!
Monday, September 30, 2013
Sunday, September 29, 2013
investing
whenever i talk about investing, i feel like it comes across as though we have loads of money. well, we don't. you can invest regardless of your income. we choose to do it because we are able to right now, and we know there may come a stage in life (like, when we have a million kids we're trying to feed) that we are unable to continue doing so. so here are my suggestions.
if your company offers to match contributions to your 401k, DO IT. do the max amount they will match. this is free money. the more you contribute at a younger age, the better off you will be. dave ramsey has some chart that shows if you invest x amount from ages 20-30, and never again, it is exponentially better than investing 2x from ages 50-60. the longer you let your money grow, the more you will have.
we have an edward jones man. while we know a bit about everyday finances, we know nothing about investments. so basically we told him that we want to put a certain amount back every month (which is not very much), and he handles where that goes.
to be completely honest, i'm kind of torn on the issue of investing. i strongly feel that as a christian, i should depend on God to provide. i know He will provide for my needs. and jake and i are not the type to desire to go on extravagant world adventures in our old age. also, the idea of "retirement" is really not biblical. so for us, on one hand, investments are basically savings that are doing something (growing) rather than sitting around in a bank. they are something we could use should an emergency arise. on the other hand, jake may have to stop working at a certain age because of health reasons. he's very healthy, and so is his whole family, but with powerlifting, at some point his joints or something may decide they're no longer happy with him.
to summarize: we don't invest because we want a luxurious retirement; we invest because we feel it's a wise way to save our money for whatever the future holds. we invest through edward jones, contributing a certain amount every month for now. if your employer matches, you should contribute to your 401k. hope this has helped :)
if your company offers to match contributions to your 401k, DO IT. do the max amount they will match. this is free money. the more you contribute at a younger age, the better off you will be. dave ramsey has some chart that shows if you invest x amount from ages 20-30, and never again, it is exponentially better than investing 2x from ages 50-60. the longer you let your money grow, the more you will have.
we have an edward jones man. while we know a bit about everyday finances, we know nothing about investments. so basically we told him that we want to put a certain amount back every month (which is not very much), and he handles where that goes.
to be completely honest, i'm kind of torn on the issue of investing. i strongly feel that as a christian, i should depend on God to provide. i know He will provide for my needs. and jake and i are not the type to desire to go on extravagant world adventures in our old age. also, the idea of "retirement" is really not biblical. so for us, on one hand, investments are basically savings that are doing something (growing) rather than sitting around in a bank. they are something we could use should an emergency arise. on the other hand, jake may have to stop working at a certain age because of health reasons. he's very healthy, and so is his whole family, but with powerlifting, at some point his joints or something may decide they're no longer happy with him.
to summarize: we don't invest because we want a luxurious retirement; we invest because we feel it's a wise way to save our money for whatever the future holds. we invest through edward jones, contributing a certain amount every month for now. if your employer matches, you should contribute to your 401k. hope this has helped :)
Thursday, September 12, 2013
saving
what i will be talking about today is liquid savings, as in an actual savings account.
we don't follow dave ramsey's method exactly. technically we do the 10-10-80 budget (10% tithe, 10% savings, 80% everything else), and beyond that we apply dave ramsey's basic principles, with a little suze orman thrown in (we follow her advice regarding credit -- dave says no credit, suze says protect your credit). dave says to put away an emergency fund of $1000, and then don't save any more until you have all debt paid off. but we save anyway.
if you'll remember from my budget outline, we actually save 5% and invest 5%. we feel it is wise to do both of those things, but we can't afford to save 10% and invest right now (we do put 10% of my "net" pay into savings). tomorrow i will talk more about investing.
we define "net" as being after our tithe too. so we take jake's take-home pay (the actual amount on his paycheck), subtract the amount we tithe (see yesterday's post for more info), and the amount we're left with is our "net". so multiply that by 5%, and that's how much we save. similarly to yesterday, we had to set a specific amount for this category, since we aim to end up with -0- after we have paid all our "accounts" (see our budget outline). it sure doesn't feel like much on a monthly basis. but we don't touch that money, and it adds up -- slowly, but surely.
once we have transferred the specific amount to our savings account, we have some mini-"accounts" within savings that we keep track of (for separate line item on our budget list, we have a spreadsheet we keep up with). we aim to have certain amounts in each of the following savings categories: emergency home repair, emergency medical, car replacement, and unemployment. so when we are tempted to take money out of savings to buy, say, a new coach purse, it's a pretty big deterrent to see that money coming out of the "car replacement" fund (knowing we desire to NEVER again have a car payment).
i know i didn't explain this very well. so seriously, please ask any questions you may have! hope this has helped :)
we don't follow dave ramsey's method exactly. technically we do the 10-10-80 budget (10% tithe, 10% savings, 80% everything else), and beyond that we apply dave ramsey's basic principles, with a little suze orman thrown in (we follow her advice regarding credit -- dave says no credit, suze says protect your credit). dave says to put away an emergency fund of $1000, and then don't save any more until you have all debt paid off. but we save anyway.
if you'll remember from my budget outline, we actually save 5% and invest 5%. we feel it is wise to do both of those things, but we can't afford to save 10% and invest right now (we do put 10% of my "net" pay into savings). tomorrow i will talk more about investing.
we define "net" as being after our tithe too. so we take jake's take-home pay (the actual amount on his paycheck), subtract the amount we tithe (see yesterday's post for more info), and the amount we're left with is our "net". so multiply that by 5%, and that's how much we save. similarly to yesterday, we had to set a specific amount for this category, since we aim to end up with -0- after we have paid all our "accounts" (see our budget outline). it sure doesn't feel like much on a monthly basis. but we don't touch that money, and it adds up -- slowly, but surely.
once we have transferred the specific amount to our savings account, we have some mini-"accounts" within savings that we keep track of (for separate line item on our budget list, we have a spreadsheet we keep up with). we aim to have certain amounts in each of the following savings categories: emergency home repair, emergency medical, car replacement, and unemployment. so when we are tempted to take money out of savings to buy, say, a new coach purse, it's a pretty big deterrent to see that money coming out of the "car replacement" fund (knowing we desire to NEVER again have a car payment).
i know i didn't explain this very well. so seriously, please ask any questions you may have! hope this has helped :)
Tuesday, September 10, 2013
tithing
i am not going to attempt to persuade you to begin tithing, or tithe any more or less than you already do. actually, that last phrase was incorrect. "tithe" literally means "a tenth". so if you are a christian, and you desire to tithe, but you only give 2%...well, you're not tithing. but i digress.
jake and i have always tithed, but only recently have we been convicted that we were doing it wrong. we have always gotten a paycheck and given 10% of that paycheck to our local church. but really, we weren't tithing on our income. we were tithing on our take-home. you know the whole "give to God what is God's and to caesar what is caesar's"? well, caesar was getting a whole lot more from us than God was! so we decided to begin tithing on our gross pay. but then we thought "how in the world can we afford to do that?" we had trimmed our budget down so far. but we prayed, and we crunched, and we just decided that we would do it, even if we couldn't see how it could possibly work. and you know what? it works just fine.
because we operate on a zero-based budget (from jake's income), we needed a specific dollar amount to allocate to our tithe. so we looked at the past six months of his pay, chose the highest amount, then rounded up. just to be safe. and that is the dollar amount we give. so yes, technically it's more than 10%. but guess what? we are told to tithe, as christians. we aren't told to only tithe, but we are told to at least tithe.
i challenge you to pray about how He would have you handle your finances. and if you're mad at me and still think i know nothing about you...you're invited to dinner. we'll pull out the checkbook registers. and i will show you what it looks like to not be able to afford to give any more, but do it anyway.
jake and i have always tithed, but only recently have we been convicted that we were doing it wrong. we have always gotten a paycheck and given 10% of that paycheck to our local church. but really, we weren't tithing on our income. we were tithing on our take-home. you know the whole "give to God what is God's and to caesar what is caesar's"? well, caesar was getting a whole lot more from us than God was! so we decided to begin tithing on our gross pay. but then we thought "how in the world can we afford to do that?" we had trimmed our budget down so far. but we prayed, and we crunched, and we just decided that we would do it, even if we couldn't see how it could possibly work. and you know what? it works just fine.
because we operate on a zero-based budget (from jake's income), we needed a specific dollar amount to allocate to our tithe. so we looked at the past six months of his pay, chose the highest amount, then rounded up. just to be safe. and that is the dollar amount we give. so yes, technically it's more than 10%. but guess what? we are told to tithe, as christians. we aren't told to only tithe, but we are told to at least tithe.
i challenge you to pray about how He would have you handle your finances. and if you're mad at me and still think i know nothing about you...you're invited to dinner. we'll pull out the checkbook registers. and i will show you what it looks like to not be able to afford to give any more, but do it anyway.
Monday, September 9, 2013
our budget outline
with today's post we begin the nitty gritty. i am trying to keep each day's post as short as possible, so today i will only post our budget outline. in the days to come i will go into more specifics about each category. as always, feel free to ask any questions :) you are welcome to set up your budget exactly like we have ours, but of course you can alter it to fit your family's needs.
jake's income:
jake's income:
- tithe 10% of gross pay
- mortgage
- water/trash (fluctuates, but we do have a specific amount set of the approximate average)
- electricity (we have recently signed up for duke power's equal payment plan - no charge to us, and much easier for planning the amount to allocate here!)
- cell phones ($83 total for us both! i'm proud of that one :) )
- groceries (includes couponing, household items, personal care, etc.)
- car payment
- car insurance (we pay this once a year, but still put back money for it every month)
- life insurance
- taylor's health insurance (thank you, state of nc, for making it basically impossible for us to add me onto jake's plan)
- cable/internet (we cancelled our cable yesterday, but i wanted you to see where this used to go)
- netflix
- savings 5% of net pay ("net" as we consider it is after tithe has been taken out of his paycheck, too)
- investments 5% of net pay
- home improvement - anything over $x (his pay fluctuates month to month, so x = the lowest amount he's gotten paid in the last 6 months)
- gas - jake
- gas - taylor
- car maintenance
- gifts
- christmas (this includes christmas gifts and decor or other celebratory enhancements)
- eat out
- activities
- vacation (we put back as much as we can afford - not much - so hopefully we'll be able to get away occasionally. this category's new for us)
- routine medical care (co-pays, prescriptions, etc)
- clothing NEEDS (we really have all we need. anything we want comes out of any play money we have. so this is literally for when all of our underwear has holes in it and we HAVE to have new ones.)
- beauty (my hair cuts, birchbox, makeup, etc)
- weightlifting (idk what he does with this. gets protein powder and barbells and stuff i guess)
- dolly (vet, grooming, food, etc. we're hoping to keep this as low as possible)
my income:
- tithe 10% of gross pay
- savings 10% of net pay (see "net" definition above)
- jake play money (he uses it to eat lunch out during the week)
- taylor play money (for my manis, obviously)
- student loans: minimums
- extra payment (a specific dollar amount) to the smallest loan
savings (where the money goes when we transfer it to the savings account):
- emergency home repair (air conditioning breaks, water line bursts - i don't even know what that means, whatever. this is for true "we-have-to-do-this-now stuff)
- emergency medical
- car replacement (the goal is to never finance a car again)
- unemployment
wow, this was a lot longer than anticipated. i wanted you to see every single line item. will explain more later. hope it's helped!
Saturday, September 7, 2013
our financial goals/philosophy
in order to maintain motivation, i'm going to suggest you create some sort of goal list or mission statement asap. today i will share with you our outlook on it all.
our overall end goal is related to the well-being of our family. we desire to have kind of a lot of kids (compared to the U.S. average; not compared to my ESL students!), and we want me to be able to stay home with them and homeschool, until a certain point anyway. we believe God's command to us is to be fruitful and multiply (obviously, not every Christian in the world feels this way, and we certainly don't pass judgment on others whose beliefs are different from our own). not only that, but we feel that my role as a wife and a mother is to serve my husband, my children, and our home. this is not something my husband is forcing down my throat, to make me subservient to him. it also not something i am forcing on him so i can sit at home all day and do "nothing". we believe this picture is one that can work beautifully, and does for many families, even today.
right now i only work part-time. that is by choice. although we have no children, i do have a husband and a home. i desire to throw myself and my heart into nurturing these things. we think it's beneficial for me to learn how to efficiently manage our family while there are only two of us, so as that number grows it is almost second nature to me. also, i have student loans. my income right now goes solely to pay off my student loans, and to any "extras" we feel the freedom to indulge in right now. for now, we each get roughly equal amounts of "play" money, in addition to paying off my student loans at a little over twice the speed intended by the lenders.
so to sum it all up: we want a million kids. we feel strongly that i should stay home with them, and teach them. we have to be debt-free to do that. we have structured our whole budget so that we live off jake's pay, and mine goes to debt reduction and a little "free" money for us both. it's hard. it's not always fun. but we believe it will all have been more than worth it in the end.
our overall end goal is related to the well-being of our family. we desire to have kind of a lot of kids (compared to the U.S. average; not compared to my ESL students!), and we want me to be able to stay home with them and homeschool, until a certain point anyway. we believe God's command to us is to be fruitful and multiply (obviously, not every Christian in the world feels this way, and we certainly don't pass judgment on others whose beliefs are different from our own). not only that, but we feel that my role as a wife and a mother is to serve my husband, my children, and our home. this is not something my husband is forcing down my throat, to make me subservient to him. it also not something i am forcing on him so i can sit at home all day and do "nothing". we believe this picture is one that can work beautifully, and does for many families, even today.
right now i only work part-time. that is by choice. although we have no children, i do have a husband and a home. i desire to throw myself and my heart into nurturing these things. we think it's beneficial for me to learn how to efficiently manage our family while there are only two of us, so as that number grows it is almost second nature to me. also, i have student loans. my income right now goes solely to pay off my student loans, and to any "extras" we feel the freedom to indulge in right now. for now, we each get roughly equal amounts of "play" money, in addition to paying off my student loans at a little over twice the speed intended by the lenders.
so to sum it all up: we want a million kids. we feel strongly that i should stay home with them, and teach them. we have to be debt-free to do that. we have structured our whole budget so that we live off jake's pay, and mine goes to debt reduction and a little "free" money for us both. it's hard. it's not always fun. but we believe it will all have been more than worth it in the end.
Thursday, September 5, 2013
why a budget?
so you only buy stuff on sale and you never overdraft your bank account and you pay off your credit card every month. why in the world would you need a budget? too restricting, and obviously, you're doing fine.
well, are you satisfied with "fine"? or do you want to be in control of your own money? we chose the latter. making a budget is pretty sobering. you write down $50/month for eating out, then look back at your checkbook and see what you actually spent last month was over $150. WHAT!? how?? your family only eats at mcdonald's. for a family of four to eat at mcdonald's it costs at least $15 or so (i'm totally guessing. jake kinda counts as two people, so for our family of "three" it's like $10). if you go through the drive-thru once a week, that's already $60 for the month. and of course you have to go out to eat after church on sunday, and you usually choose mexican or italian. for your family it's about $30 every time. so that's $120 a month. for your family of four to utilize the drive-thru once a week, and eat out after church on sundays, you've already spent $180 on eating out. and you think $50 is enough to budget for that?
the above is just one example. i'm trying to show you that having it all down on paper really makes you see clearly how much you are currently spend on everything. when it's all out there, you can then see where you need to cut back, or even (rarely) where you need to allow for more.
with a budget written down, you can also determine your financial goals and dreams, and plan for those accordingly.
a budget is not restricting; it's freeing. for someone who loves structure - like me - it really helps me to know that yes, we can go to the movies, but we don't have enough in the entertainment category to do popcorn at said movie. and usually i'll choose my own (homemade, better-for-you, more delicious) popcorn and a redbox movie. so just go ahead and determine that you're going to make you a budget. it'll be fun :)
well, are you satisfied with "fine"? or do you want to be in control of your own money? we chose the latter. making a budget is pretty sobering. you write down $50/month for eating out, then look back at your checkbook and see what you actually spent last month was over $150. WHAT!? how?? your family only eats at mcdonald's. for a family of four to eat at mcdonald's it costs at least $15 or so (i'm totally guessing. jake kinda counts as two people, so for our family of "three" it's like $10). if you go through the drive-thru once a week, that's already $60 for the month. and of course you have to go out to eat after church on sunday, and you usually choose mexican or italian. for your family it's about $30 every time. so that's $120 a month. for your family of four to utilize the drive-thru once a week, and eat out after church on sundays, you've already spent $180 on eating out. and you think $50 is enough to budget for that?
the above is just one example. i'm trying to show you that having it all down on paper really makes you see clearly how much you are currently spend on everything. when it's all out there, you can then see where you need to cut back, or even (rarely) where you need to allow for more.
with a budget written down, you can also determine your financial goals and dreams, and plan for those accordingly.
a budget is not restricting; it's freeing. for someone who loves structure - like me - it really helps me to know that yes, we can go to the movies, but we don't have enough in the entertainment category to do popcorn at said movie. and usually i'll choose my own (homemade, better-for-you, more delicious) popcorn and a redbox movie. so just go ahead and determine that you're going to make you a budget. it'll be fun :)
Wednesday, September 4, 2013
finance-ish blogs i follow
today's post will be easy. i do want to encourage you to begin following every single one of the blogs i am about to mention. i'll try to list them in what i think is the order of importance/applicability (is that a word? we'll say it is).
1. our freaking budget. seriously, their blog is great. they have a little (a lot) more discretionary income than we do, but they are even more determined than we are to live on less while saving saving saving. i would say 100% you have to follow them.
2. loving simple living. this is more about the mindset. go back and read some of the older posts. lately her posts have been about her life as a minimalist now, but occasionally she issues a "simple living" challenge of some sort. definitely worth following.
3. blissful and domestic. this is the blog of the woman whose family lives on $14,000/year. again, i prefer her older stuff, but she still posts some gems. she also has free, downloadable meal plans and grocery lists. she has posted about how her family lives well and enjoys their life on a minimal income.
side note to everyone reading this who lives near me now: if these people can do what they do, living near much more urban areas, imagine how much better we can do! we are so fortunate, and do not need to take that for granted. i don't know if you all even realize it, but as a "foreigner", i see it so clearly: when i can get my hair cut and colored and eyebrows waxed here for the same price i paid for a dry trim in burlington (not even big compared to other, real cities), where we live is CHEAP. yay for budgeting when it's made so easy for us!
so follow these blogs and get ready to be challenged the next few days. you can do it!
1. our freaking budget. seriously, their blog is great. they have a little (a lot) more discretionary income than we do, but they are even more determined than we are to live on less while saving saving saving. i would say 100% you have to follow them.
2. loving simple living. this is more about the mindset. go back and read some of the older posts. lately her posts have been about her life as a minimalist now, but occasionally she issues a "simple living" challenge of some sort. definitely worth following.
3. blissful and domestic. this is the blog of the woman whose family lives on $14,000/year. again, i prefer her older stuff, but she still posts some gems. she also has free, downloadable meal plans and grocery lists. she has posted about how her family lives well and enjoys their life on a minimal income.
side note to everyone reading this who lives near me now: if these people can do what they do, living near much more urban areas, imagine how much better we can do! we are so fortunate, and do not need to take that for granted. i don't know if you all even realize it, but as a "foreigner", i see it so clearly: when i can get my hair cut and colored and eyebrows waxed here for the same price i paid for a dry trim in burlington (not even big compared to other, real cities), where we live is CHEAP. yay for budgeting when it's made so easy for us!
so follow these blogs and get ready to be challenged the next few days. you can do it!
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