Friday, January 6, 2012
Money, Money, Money.
We all know that money doesn't grow on trees. Learning how to be wise about your money and making it work for you is one important aspect of running your home. At the beginning of each year my husband and I sit down and figure out our budget. This year was a particular challenge. Unlike most jobs my husbands is very up and down. He goes in for work every morning (M-F) at 8am and he could be done at 10am or 4pm or any time in-between. Sometimes, he will get called off the night before or even the morning of. He works for a small company that was struggling, but are doing better now. He is one of 4 employees, 2 if you don't count the owners. He loves his work and I love that he has sometimes, he gets called off on my day off, and we get a bonus day together. I don't like the fact that we have NO CLUE from week to week what his paycheck will look like. It makes for some creative financing.
We live by a few simple rules in our home to help keep our bank account as stable and level as possible. Perhaps some of these rules will help you and your family with your finances.
1. We purchase everything on our credit card. This may seem counter intuitive as most people will tell you to not use your credit cards. However, we ALWAYS pay it off every month, notice the it. We have one credit card that we use. It is a rewards card. We have been using this card for the 2.5 years of our marriage, never paid a cent in interest, fees or fines. We have however received $400 in gift cards or cash in that amount of time. These are just our normal monthly purchases. Things like our phone bill, car insurance, groceries, baby supplies. We honestly don't spend that much per month, but it has been so great to be able to put a little in savings or get a gift card to a nice restaurant for a special date. I would recommend this strategy for anyone, who can control their spending. If you are someone who gets that plastic card in their hands and uses it to buy/splurge on anything you want, this will not work for you. However, if you can pay it off every month, why not make money off your credit card?
2. Stay out of debt. Currently, the only debt we have is my hubby's student loans. We currently rent (hopefully we will be adding a mortgage to our debt in the near future, that will be cheaper monthly than our rent), we drive cars that are completely paid off, and the biggest thing, we live with in our means. This is so hard for me, especially at Christmas time. Our first year of marriage, we had practically no Christmas decorations. I actually broke down, with full on tears in Target because we didn't have the money to buy very many decorations. I wanted Christmas to be magical, but we stuck to our guns. Would an extra $50 that we couldn't pay off on the credit card been the end of the world? No, but we have chosen that credit card debt is not a path we want to go down. One way I make this easy on my self, is I pay a little towards our credit card each week, so I don't have one huge bill at the end of the month.
3. Save, Save and Save. It may not seem like a lot but $30 here or $50 there can add up to a lot over time. When I was in college, my bank started a "keep the change" savings plan. Whenever you use your debt card, they would round the purchase up to the next dollar and transfer the difference into your savings account. We still do use our debt card on occasion, as there are vendors who do no accept credit cards. But over the last 6 years, I have saved over $850 just because of this program. Savings I don't have to think about. It truly shows that a penny saved is a penny earned.
4. Splurge on occasion, but with in your means. We budget $100 for incidentals each month we use this money for random things we need that aren't already in our budget. An example that happened last month was we needed a new laundry basket, another example would be us seeing the hubby's family out of town and using it to cover the extra gas. Typically we have a little left over from this and we use it to go on an extra date, get ice cream, buy a movie or two that we have been wanting. Allowing ourselves to splurge here and there helps us stick to our strict and tight budget with out feeling like we always have to go without.
5. Budget. It isn't fun, but it makes life easier. If you know that you have x amount per month to spend on gas or groceries, and you stay with in that number you know that you are always spending within your means. Each month we have fixed bills (rent, phone bill, internet etc) and then the ones that change from month to month (utilities, gas and food). With the flexible bills we always try and find ways to spend UNDER our budget that way we have extra money to save or splurge. We conserve electricity, we drive as little as possible we shop sales etc. There are tons of ways to make it work so that you can have a little bit of extra each month.
I hope that maybe something in here helps you. We try hard as a family to keep our finances under control and to always live below or within our means each month. Please let me know if you have any questions.