Back to the Budget

Not one of my favorite things to do...
Photo by Stuart Miles

Tonight we finally got our act together and worked out… not so much a budget, but a map of where our money should be going.  I figured out one of the reasons I utterly hate looking at our finances on paper:  It’s completely stupid.  There’s honestly no reason on earth why we should be struggling the way we do.  Even with my own meager earnings, we should be getting all this stuff paid with room to spare.  I just don’t understand why it never seems to work out that way…

Well, that’s not entirely true.  There’s crap like the car repairs.  Plus, we always seem to be starting from behind.  But at least we can play a little catch-up – we filed our taxes and should be getting a little refund by the end of the week.  Nothing amazing, but at least enough to keep swimming for a while longer.  I’m really looking forward to the flashcards project payout.  That’s going to give us some really good breathing room.

One of the other things we accomplished with this was that I was able to see how much I actually need to make per day to stay afloat.  Once again, what gives?  I can do this, easily.  I don’t know how it’s not happening, honestly.  But at least I can have that number in my head every day so when I sit down to work I know what my daily minimum is.  I’m not going to count the flashcards project toward that minimum.  That’s going to be gravy, as far as I’m concerned.

I’m not going to lay our entire budget out for inspection; we do need to keep some things private after all!  But I wanted to at least show you our categories.  We haven’t yet set up the categories for things beyond the basics.  Most of our expenses really are monthly.  I didn’t set up an entertainment category, although we do have a spending money category.  Once we have this running somewhat smoothly, we are going to look at options for one evening out a month and hopefully a regular date night.

The budget categories:

•  Rent
•  Groceries
•  Power
•  Gasoline
•  Water/Sewer
•  Internet
•  Emergency Savings Plan
•  Debt repayment
•  Cell phones
•  Bus fare
•  Taxes
•  Spending money
•  Netflix/Hulu

I should probably mention that I’m not counting things like insurance and such that come directly out of Gavin’s paycheck.  When we calculated our income, I only looked at the net that actually comes into the checking account.  The taxes category is for the taxes that I have to pay, since mine aren’t deducted automatically.

The next step in this process is going to be to track how much we are actually spending in each category to make sure the numbers are fairly accurate.  I think I overestimated in a few areas; groceries and gasoline come to mind.  I’d rather be over than under though.  

Our Priorities

Spending money should reflect our priorities.  But first we need to know what those are.
Image by Naypong

So, moving along in the Planner.

After we dreamt about having a million dollars, our next job was to think about our top five priorities.  Gavin, Elias and I all worked on this, with fairly different results. 

I think Elias was probably the most honest in his priorities.  I know what my priorities should be, but sometimes I forget, especially when something tantalizing is in sight.  Gavin didn’t even list “fun” as one of his priorities, but I know that isn’t true.  I also noticed that each of us interpreted the question slightly differently.

Without further ado, here are our lists:

Amee

1. Family
2. Friends
3. Having Fun
4. Responsibility
5. Health

Gavin

1. Being a good husband/father
2. Being a good friend
3. My job
4. Money
5. Myself

Elias

1. Having fun
2. Reading
3. Learning science
4. Colors (his fish)
5. Maddie

I should probably be worried that he considers Colors to be higher priority than his sister, but he is, after all, only 11.  I also don’t think it’s necessarily true.  This morning, he made breakfast for Maddie, but I had to remind him to feed the fish.

So, on to the next question.  How did spending our million reflect our priorities?  Elias’s spending decisions clearly reflect his desire to have fun above everything else.  Because he has Asperger’s, he is also limited in his ability to look past himself and his own desires. 

Gavin felt that using the million to take care of the bills and other responsibilities freed him from stress, which would in turn allow him to be a better father.

I felt like my desire to have a house represents my need to put my family first. 

Our assignment for the next week is to track our money that we spend.  This is where things always tend to fall apart, but we’ve done alright for the first couple of days.  I don’t think it will be a fair representation of our spending habits, though, since Gavin is in between paychecks and we’re trying to cope with Christmas being right around the corner.  We’ll report the results when they are in, though.  The goal is to see if our spending habits reflect our priorities. 

What are your top priorities?  Do your spending habits reflect them?

How to Teach the Value of the Dollar to Kids

Money management is the key to being successful.  It doesn’t matter if you make $25K or $250K a year.  But how do you instill these skills into your kids?  How do you make them realize just how much work goes into each dollar that goes away, and that the new video game they want with a price tag of $50 is actually a “big purchase”?  Here is one possible way to handle it...

With our oldest, we are trying a lot of tactics to get this through to him.  He has very expensive tastes, but they aren’t far from the average “tween.”  Video games, movies, and other expensive interests seem to rule his world.  When he gets a gift card for a store as a present (or any money), it burns a hole in his pocket.  Now, being who I am, I love gadgets and other stuff as well, so I know this feeling. I have had to learn the hard way in the past, and I am trying to get him to learn without the “growing pains” I had.  Here are a couple of possible ideas….

• Have him sit in and see just how much goes to help the family get day-to-day expenses paid. Show your child the power bill, cable bill, how much groceries are, etc. 
• Price out a trip to the movies for the family, right down to the popcorn.  Show them just how much of the family’s budget goes poof for a 2-hour trip to the cinema. 
• Take your child shopping at the grocery store, and show them what the food portion of the budget goes to. See if maybe they can help plan meals that are within a specific budget, to get them thinking of concepts like the price per serving.
• Have them make a wish list.  Then have them prioritize it, and use the web or go to a store to get the pricing for these items.  Assuming your kids have an allowance, it will make them aware that once money is gone, it is gone. 
• Have them take over the costs of some of their interests.  If they want that amazing new video game, maybe have them pay some or all of the cost.   The goal there is not for you to save money, but to have your child start to take responsibility for their own money. 

These are just some ideas to help make your child aware of what things cost.  Once that gets through to them, they can start making choices and saving money as well.  Not just for items they want, but for the future.