Al’right. I realized recently that I can not show others how to properly budget without showing how I budget. This is my our budget for August.
We have been debt free for a few years now. Our current financial goal is to buy a house this year so we have loosened up our wallet, just a little bit from how tight it was when we were paying off out debt.
Yeah… I’m not going to share our income on the internet. Honestly, I don’t know y’all that much lol. Sorry. Here is what I am going to share with you:
Tithing/Our Monthly donations are the first item on the budget and is always 10% of that months income. (which is why I covered it with a pretty flower just in case you smarty pants gets a hold of a calculator lol.)
When my husband and I were in debt, and had only one child, we were able to live off off $500 per month for groceries and $150 per month for our sons diapers and food . Now, we are out of debt, have two kids and loosened the purse strings a little. We now live off of $700 for groceries and $200 for our monthly Amazon subscriptions that covers formula, diapers and other monthly expenses.
Next is our rent. When we moved back to Oregon we knew our goal was to buy a house soon so we hopped onto the cheapest rental we could find. We are now living in a two bedroom apartment that has mold, leaky sinks and no ventilation BUT we are saving more money towards our financial goal than we have ever done. The other option we were looking at was a 3 bedroom 2 bathroom house for $1800 a month.
“If you will live like no one else now, later you can live and give like no one else.” -Dave RamseyTweet
What was the first thing we did when we got out of debt?
Opened a vintage bottle of champagne someone gave us on our wedding.
What was the second thing we did?
Threw it out because it was DISGUSTING. Who ever said that the more expensive a wine was the better it tasted was a freaking liar!
After our stomach settled from the wedding gift from someone who must have hated us a lot, we continued living intentionally with our income and put 3-6 months of expenses into a savings account. This is our Emergency Account and we do not touch it. We do not look at it. We do not thing about it, and I hope we will never have to.
Because the only reason we would need to touch our emergency fund is if my husband was ill or injured and unable to work. This would be the cash that would keep the lights on in the house and food on the table while he recovered. Yes, if my husband was unable to work I would find some way to earn an income but with this emergency fund we wouldn’t have to worry about that.
In fact, as a stay at home mom of two, I no longer worry about what would we do if my husband was suddenly unable to provide for us. As the head of the household and the main bread winner, he provided for us by working long hours to earn more so he could pay off the debt quicker and he followed a financial plan that lead to our fully funded ROTH I.R.A.s, emergency fund and a legacy that we would never have to worry about our finances ever again.
Oh, yes. I am the luckiest person alive. And tonight my husband is going to be the second luckiest person, if you know what I mean. 😉
… Where were we? Ah yes, budgeting. My husband and I currently put 25% of our income into our ROTH.I.R.A.s or for those who don’t understand Finan-ski, it is a Roth Independent Retirement Agreement or Account. Why is it a Roth? That means when you withdraw money from your ROTH.I.R.A, you will not need to pay taxes on it. Not even if the money you pull out was grown from the money you put in.
One of the biggest worries people have with budgeting is that they won’t have the freedom to buy something just because they want it, and that just is not true. When you are in control of your budget you are also in control of what goes into it and what goes out. When we were in debt, we only budgeted out $50 a month for entertainment, and we each had $50 for personal pocket money. Since getting out of debt we have doubled our fun money.
When we first got on a budget four years ago and I held my first $50 fun money in my hand… I spent it all in an hour… The rest of the month was tasteless and boring lol. I learned to space out my $7 Starbucks coffees throughout the month. After we got out of debt and I had my $100, I felt like the Queen of Egypt. It felt so empowering holding that $100. I thought about all the things that I could do with it. All the art projects I would start. I would finally have the money to start writing my book…
Then I spent it all at TJ Max…
The point is, it was my money. My husband couldn’t say anything about what I spent it on and I can’t say anything about what he buys with his personal money. I am telling you, the personal pocket money is a MARRIAGE saver. Before debt we always fought about who was spending the money stupider… (more stupid… stupidly? Freaking English language!!)
Now, we have a plan. We only fight about whose turn it is to pay for the dates lol. Just kidding, that is what an entertainment budget is for.
And like that stuttering pig in that weird nightmare of a cartoon from my childhood used to say… “Abadee-Abadee-Abad-A-A-A-… That’s All Folks!”
That’s right. That is how simple a budget is when you are in debt and it is even simpler when you are in debt.
So tell me, what does budget look like?