by Adam Dawson
We have been so encouraged by all the great ideas everyone has been leaving in the comments on the last several posts! We don’t get around to responding to everyone, but we probably do discuss every single idea and bit of advice we’ve gotten.
And so, we have some good news to share…Drumroll, please…….
We have an August Spending Plan! We are going to try several of the ideas you gave us with this month’s plan:
- Emergency Fund. We are going to start saving $300 a month to increase our emergency fund. After the discussion about having greater rental reserves and saving for home maintenance, our puny emergency fund that we had while we were renting began to feel inadequate.
- Budget Categories. Instead of having envelopes for 8-10 categories like in the past, we are going to reduce the categories to just a few necessary ones. All bills will be paid from our bank account directly. We will still use our debit cards for gas. We will set aside specific amounts for car repairs, groceries each week, pet food, and hair care. Everything else will be lumped into one big category that we will call Spending Money. We will each get $75 per week for all our personal needs: clothes, cosmetics, restaurants, coffee, household supplies, entertainment, etc. The $75 sounds like a lot but when you start some of these items, I’m sure it will go fast! I have to get tires on my car this month so I can pass state inspection, so that reduces the amount of spending money we have available.
- Cash. Our spending money will be withdrawn from the bank each week in cash. No more debit cards for day to day purchases. When it’s gone, it’s gone!
- Hair Care. This is Emily speaking: I’ve known for a while that I couldn’t keep spending that huge (unmentionable) chunk of money on my hair, so I was ready to look for other options. (I only went to such a fancy salon in the first place because they offered a really great Groupon deal for a cut and deep conditioning treatment.) Although I liked the suggestion to try Groupons for hair services, visiting a different salon every time, I am still a bit hesitant to try this because I’m afraid I’ll get hooked on another fancy salon. So at the recommendation of a few commenters, I tried going to The Aveda Institute. I have a few other options in mind, but I thought I’d start with this one, as it was something I’d been wanting to try for a while. I’ll give a full review of the experience once I’ve tried a few other options, and we can compare the results at that time. For now, I’ll just say that it was so-so. It took more than half a day to complete, they had to redo the cut AND the color, and it’s still wrong, but not totally awful. I wanted just a refresh of the color and the roots, and I ended up with a totally different style of (brown) hair. On the upside, I got a free massage, free tea (YAY!) and it was less than half of what I’d been paying. It felt great to spend so much less than I was spending, but I’m undecided about the experience. On to the next suggestion! Back to Adam: We are going to budget $100 per month for Emily’s salon visit and we agreed that if she wants to go once a month, she can find a $100 salon, or if she wants to spend $200, she can go every other month. I wish it was less money, but I learned a lot from the discussion here about what it’s really like trying to get a woman’s hair taken care of.
- Online Tools. We used to use Mint.com. It was easy when our budget was cash-based, but when we got away from using cash, then tracking all the debit card transactions in Mint became overwhelming. Since we’ll mostly be using cash, I may try to dust off mint.com and see if we can start tracking again.
It feels good to have a plan. I feel confident that we will have enough money to make it through the month, and that alone is a burden lifted. However, I know that $75 per week will be a significant pinch to how we’ve been living. I think we are both sort of dreading it. If we work together, we have $150 a week and should be able to do just about anything we want. If we act independently, it may be a lot harder. For anything that costs more than $75 and we have to save up for, we’ll have a much harder time.
So, thank you to everyone who shared their experiences and ideas with us! Hopefully August will be the month that we start gaining control over our finances!
Great job!
What is your goal for the emergency fund?
I am in process of trying to build up emergency fund too. The problem is it keeps building up and breaking down again. 🙂
Good for you for creating a spending plan. As for debt repayment, will you be listing that as well? It’s a pain to scroll over each of the loans to check the payment. I much prefer when you just list the amount paid for each like Beks used to do. Her’s was the easiest to follow for the reader. Just my opinion, lol. Will you be sharing your budget categories as well?
The emergency fund increase is a good idea. I’ve been in my home for 90 days now: just spent $260 yesterday for a plumber to clean out the main line, replaced my air conditioning condenser $1100 so I could have air conditioning, had my dryer vent cleaned out $125 (dryer wouldn’t work) and had my dishwasher repaired (paid $53 for the extended warranty since it was out of warranty when I moved in). Oh, and I had an $1800 car repair too. My emergency fund is depleted now so I am rebuilding it. And of course all of these things happened mostly after I had purchased blinds (it didn’t have any window treatments), closet organizers (there weren’t any), towel bars (there weren’t any), etc. A very expensive 90 days! I am rebuilding my emergency fund so hopefully things will settle down soon.
As for Emily’s hair, I still say to stay with what works. She pays $250 every 8 weeks ($125/month) which to me is fairly reasonable. As you can see, it’s a pain to try and locate good hair services. Saving money is great, it’s just not so easy to find a good hairdresser and hair salon.
I used Mint for a while and found it easier to do pen/paper however I do keep my master budget in Excel. I list each item out for every payday working from the master budget and record every penny. I might suggest that even if you are starting with the $75 for the spending plan, that you still record what you spend. I have one page in my bill notebook where I record groceries, fast food/restaurants and other which includes Walmart or any discretionary spending. I then sum those categories at the end of the month and record it on a master page by month. That way, I know exactly how much I’ve spent on groceries, health and beauty items, etc. I find the “other” category which includes Walmart (printer ink, non-food items), etc. is one of the categories that gets out of hand really fast. Gas is on a separate page.
Good luck. A nice first start to your budget. Just remember, it’s a “working” document so you’ll be tweaking it monthly until you get everything worked out. The $75/week seems really high to me however I know you were very distressed over the whole budget deal so I am proud of you for starting.
I go to Super Cuts every 6 weeks. I pay $13 for a GREAT haircut (I keep it short) and pay the stylist a three dollar tip. I stopped dying my hair and it is so wonderful to see a healthy, full head of hair sitting upon my head (dye destroys it) AND it’s a natural, real, honest-to-goodness color.
You’re insane IMHO to spend anywhere near $100 at a salon. Who, really do you think you are? No wonder you have such debt problems.
BTW, tea costs micros of pennies. Free tea gets you excited? Give me a break.
Wow…that’s harsh. Emily’s haircuts could be another person’s concert tickets, coffee habit, weekend bar bill, grocery store splurges (or how about groceries purchased that go to waste?) etc.
Anyone can blow $100 a month on any number of items another person would deem “wasteful”. Isn’t that why personal finance is personal?
This is just truly uncalled for. Kudos to you for being “happy” with a $13 haircut from SuperCuts. There comes a time in every woman’s life where she needs to decide either to be happy with the gray or pay more for a “younger” look. My husband is graying more and more every single day and you know what?? He looks distinguished. He looks experienced. He looks freaking awesome. You know what society today says of a woman who’s gray before her time? She looks downtrodden, she looks frumpy, she looks like she doesn’t care about her appearance.
The gender discrimination is horrific. I’m glad you’re happy with a short cut that’s inexpensive. Beating someone else up over their decisions is just childish and says a lot about YOU.
Well, aren’t you the cat’s meow. And your opinion strikes me as far less than humble. Instead of throwing out your shoulder patting yourself on the back for being oh so superior to everyone else you should stop and be thankful that your Creator gave you easy to care for hair, or that a very good haridresser works at your Super Cuts. Not everyone is sol lucky.
And, really, a good head of natural hair really is dumb luck in the genetics lottery.
You are off to a great start. I still think $100 is too much for a monthly hair visit, but considering what used to be spent, that’s a great reduction in spending. Now, a few things:
– Keep track of everything this month, every nickel you spend (even that $75 a week). That way you can see if your budget is realistic, where you are still overspending (if at all) and where you need to tweek things.
– I think car repairs ought to be its own category. Tires alone, even cheap ones, can run you $500 for 4. (yeah just replaced mine so I know!). This category needs to build up its own emergency fund as cars can hit you hard. Just this summer we have put $1700 into our van (its paid off so it doesn’t feel so bad to have to do that kind of maintenance once a year or so).
– Give yourself a minimum in your emergency fund to shoot for, like $5k. Once you hit it, keep it there. Replenish when you have to dip into it.
– What are the minimums on your debt payments per month? What is your monthly goal for over-and-above payments on your debts? Knowing these numbers, written in your budget will help keep you focused!
Best wishes this month! You can do this!
I think I might have miscommunicated some things. The car repairs ARE in their own category, and they are budgeted before any spending money is considered.
We don’t yet have an ongoing fund for car repairs but that will come in time. In the meantime, we will budget car repairs as their own category each month with what’s needed that month.
How will you handle going out to a restaurant together? I would be tempted to include an envelope for dining together, so you don’t end up nickle and diming out of your allowances.
Also, have you thought about including Emily’s hair in the monthly allowances? I have found in my budgeting adventures that my biggest challenge has been making certain I’m not wasting money on things that I don’t value.
For instance, I have a “coffee habit” (clutch your pearls, everyone). That said, I don’t spend money on alcohol at restaurants or bars. An important revelation for me has been realizing I really enjoy my coffee, whereas I’m happy to drink water when we go out to eat.
I agree on putting all personal optional things into the monthly allowance. You prioritize how you like and that’s that. Spouse can’t complain about your priorities. But when it’s gone, it’s gone.
great question! Here is what we are going to try (“try” being a key word..we reserve the right to change this in the future).
We pay the restaurant bills out of our weekly spending money. If we both agree to go to the same place, we go “Dutch,” that way one person doesn’t have to blow a big chunk of their allowance on one meal.
If only one of us really wants to go somewhere, and the other person doesn’t want to spend their $, either we don’t go, or the one who really wants to go treats the other person.
also, this gives us the option of planning a date night where one of us takes the other on a date.
it won’t just be restaurants – all kinds of shared expenses, laundry detergent, toilet paper, etc. will come out of someone’s pocket. this may or may not go well, but for right now we are thinking it will bring us together as a team as we use our spending money to take care of each other.
I could see this getting contentious. You might be better off lumping the household goods into your grocery budget. Afterall, it’s unlikely that this budget process will result in an effort to minimize your toilet paper usage…
My husband and I just had this discussion about some friends of ours about 15 minutes ago. They keep separate accounts and split the bills between them. One person has NO idea what’s going on with the utility bills. Doesn’t know if they’ve been paid or not!
We’ve been married going on 16 years. We combined our bank accounts into one account BEFORE we were married. One person handles the finances and that’s ME. In your case Emily, it sounds like it would be best suited to Adam. We have rolled this way for 16 years and it’s worked beautifully. No arguments over money. The budget is clearly laid out and everyone knows at the beginning of the month what “extra fun money” there is. Going dutch to me sounds like a couple of friends who haven’t committed. Sorry, that’s just how I see it.
I have to agree with Cathy on this one. We have been married almost 21 years, have always had a combined account and I pay the bills. I set the budget, we have a monthly budget meeting that my husband inputs on and often changes things on. We both agree on long term financial goals. We both have a set number of fun money, a set number of groceries (which includes toilet paper and personal hygiene, etc.) and all the bills are paid by me. We budget our eating out too.
You will learn through this progress, but I have never, ever known a couple who kept separate accounts and where happily married and successful financially. Every one of them turned into one spouse hiding expenses and money from the other. The worst hid the fact their mortgage wasn’t paid off, preventing her husband from retiring for an additional 5 years. I was surprised he didn’t divorce her over it – that took years to keep from him.
You are a team but you are not acting like one. Its not his money/her money, its YOUR money. You BOTH make decisions about all the bills to run your home, keep it stocked with food and keep personal care in. The only money you have personal say in is your fun money. This system has kept us argument free over money for 21 years. Okay, maybe one or two in there, but they were so long ago I can’t remember them!
I think we haven’t quite been clear in our description. We have ONE account to use for budgeting. We have line items for groceries, and I think some household goods will get bought at the grocery store.
Going Dutch on dining out isn’t a reflection of our commitment to each other – we are married 3 years now. There is an overall spending money budget and going dutch just means that we both have to agree that we want to use some of our joint spending money on going out to eat. It doesn’t change our budget or our commitment just because both people pull some cash out of their pocket. All that cash came from one bank account.
Oh, putting essentials on the individual accounts. I’ll be interested to see how this goes.
I’m wondering if you are thinking that shopping for essentials tends to also lead to other personal purchases that get lumped in, if so, I think an regular family sit-down audit is a better way to deal with that, and that the essentials come out of the household kittie. But more power to ya making a plan you think will work.
I suggest looking at http://www.gailvazoxlade.com/ to help with your cash-only venture. She has calculators, etc t o help you determine spending categories and how much cash to have in each jar. Good luck!
It’s been quite interesting from this thread and the post a few days ago to see the variety of solutions that people have employed successfully to manage the budgeting issue.
For us, mint.com is indispensable, but curiously (contrary to the thoughts expressed in this post), I feel it is so because we do almost all of our spending for the month on credit cards. (We spend less than $100 per month in cash). Whereas I have neither the time nor the inclination to keep track of transactions manually, credit cards do all of that for us, and mint.com organizes them efficiently into categories. I do spend about 10 minutes at the end of the month manually curating a few transactions here and there that get miscategorized.
We budget by “the Force”, and are fortunate not to be in debt (beyond the mortgage). Obviously we pay off the credit cards every month so there are no interest charges. This strategy works for us — we can keep track of our spending with minimal effort on actually thinking about money, which is the way I prefer to have it! Being able to take a less proactive approach like this seems to be one of the greatest dividends that you can have after getting out of debt.
I would make the final comment that this approach is probably successful for us because of the stage in life we are in (young family). I look back at my more fiscally reckless 20s and “the Force” didn’t really work as well. So, everyone has to figure out the right approach for them, and also recognize that the same approach may not make sense as one’s circumstances change.
We do exactly the same thing as you, Joe, but use the debit card instead of a credit card. I’d say our cash use is under 25 dollars a month. Mint is so easy when all of your transactions are electronic- as you said, it takes a few minutes here and there to manually categorize a few outliers, but 99 percent of our transactions are handled automatically. At this point I couldn’t imagine dealing with all cash!
when we’ve done this before I found I spent WAY too much time re-categorizing transactions in mint. and the frustrating part was it never learned the right category for some things we did over and over.
and then there’s the idea that spending with a card swipe is so much easier than parting with cash.
so i think we need to do cash for a while at least.
Ok, I have to admit that I got caught up on the “needing new tires for inspection”. Your tread depth is near 2/32″?? You need new tires more for safety than inspection!
I’m definitely curious to see how y’all do on the $75 a week. Learn to say ‘No’ or ‘maybe next time’. And walk away…
I’m glad you’re looking forward to this 😉 I’m not as excited hahaha
i ate breakfast at home today!
Good for you, we have learned to save so much money eating breakfast and dinners at home, while taking leftovers for lunch. Sometimes it is hard to break old habits, but the debt payoff makes it worth it. It is usually healthier and can bring families closer together.
I love watching you both make changes and sacrifices, because that is a sign of progress.
I am proud of you!
I’m also surprised that you are willing to take tires and toilet paper out of your $75 weekly spending money. I put $1000 in our annual budget for vehicle repairs. If we make it to the end of the year without needing it then I put it toward Christmas presents or some other investment fund. I agree with another poster that you may want to include toiletries in your miscellaneous fund with groceries. If you can buy it at the grocery store isn’t it a grocery? I think you both will find a lot more freedom and less arguing with your weekly spending money. Another option you Didnt mention for emely’s hair is that if she decides to go monthly then anything over the $100 allowed in your budget could come from her spendinglonsu. That’s how I do my Botox lol.
see comments above. the tires are not coming out of the weekly spending money. they are budgeted as their own line item. i was just saying, if the tires were NOT budgeted, we’d have more money to budget in other places – and at this early stage it would probably end up in the spending money line.
although i think we should definitely be building a car maintenance/replacement fund.
I agree with the others about creating a separate car repair and maintenance category. Regular maintenance as well as unexpected repairs can be significant, and trying to finance those out of your weekly spending money is going to be very, very difficult.
My husband makes around $40,000 a year and I stay home with our children. We each get $10/week in blow money, and we are trying a combined restaurant and grocery budget of $60/week. It will probably be this way till we get out of debt. I was really excited when I came across this blog, but it seems like maybe it’s aimed at people in a different life stage.