If I’m being completely honest, I don’t really follow a budget. Now, that’s not to say I don’t know where my money goes, don’t save and spend frivolously. In fact, I do the opposite of all of those things. But an actual budget? I’ve just never really taken the time to create it and follow it. It seems too time-consuming and stressful, and I personally like my method of managing money. It’s allowed us to save, move across the country, invest and work for ourselves. Not to say not having a budget is for everyone, but here’s why I don’t follow one and what exactly I do instead.
Is it just me or does it seem like EVERY month something “unexpected” happens? Seriously. Just a little recap…but in July our air conditioner went out (in AZ), two weeks later we had a massive swarm of bees outside our front door ($160), in August we moved across the country, in September we bought my husband a work truck, tools for his business, insurance/licensing for his business and general house stuff to get set up in NC, and now this month we had both our cars in the shop (husband’s new truck dies multiple times in one trip // our family SUV needed a new tire). November will be Thanksgiving, time off work for my husband and the start of Christmas shopping! I’m sure something “unexpected” will happen then, too.
So how do you plan for the unexpected expenses?!?!
Ahh, the great debate – Is it better to save as much money as possible and live an extremely frugal life OR seek out side jobs to make more money?
Natalie Bacon over at The Finance Girl discussed this in depth a few weeks ago, and I wanted to share where I stood on this issue.
Based on the title of this post, I’m sure you can guess that I’m more about earning and than saving every penny. I wasn’t always this way, though. In fact, it was just in the last few months that I decided I really wanted to focus on earning more instead of save, save, save. Don’t get me wrong – saving money is good. But, what you save is somewhat (read: very) dependent on what you make.
Ways that I save include couponing (I’m new at this, but will be sharing tips and tricks as I go), purchasing necessary items off of Craigslist (tools for my husband’s job, used vehicles, etc), not paying interest (paying credit cards off EVERY month), buying generic items at the grocery store, buying items on sale only, shopping at Costco and more. I will say, though, that the main way I save is by simply not buying stuff I don’t need. Yesterday at the mall I was browsing through Bath & Body Works, and while I would love to own every single delicious smelling candle, I didn’t buy anything. I was there to walk around with the girls and let them play – not to shop. I try to avoid impulse buying and would say I succeed 90% of the time.
Now, I’m looking to earn more money. I work from home, so my options really are endless as I’m discovering. Of course, there’s only so much I can do in any given day as my two girls are my main priority 🙂 I am excited to explore more income-earning avenues as time goes on, though. My husband is also working for himself, which means the more he works, the more he’s able to make. Once we buy a house, him and I have a few ideas for side businesses that we want to start. We need space for those projects, so unfortunately we can’t start those businesses while living in our apartment.
While both earning more and saving more are absolutely necessary to financial independence, you can’t make millions quickly simply by saving (assuming you make an average salary). You need to bring in more money that way you can save more money. You need to invest your money, develop passive streams of income, possibly own and rent out real estate, minimize your bills and so on and so forth.
My husband and I are very good at saving money and living within our means. Going out to eat is spending $15 at the local BBQ restaurant to feed all four of us! We love cooking at home, going on walks and to the library, watching movies, playing cards, reading and more. This past week, though, BOTH of our cars wound up in the auto shop (more on this later) and cost us $400 (we got off VERY lucky!). Still, that was $400 we could have saved but instead had to go to our auto repairs. Unexpected expenses happen ALL the time, so instead of stressing about not saving as much, I’m changing my game and focusing on earning more!
What are your thoughts? Are you a spender or a saver? Do you focus on saving more, earning more or both? I would love to know!!
My girls are wonderful, and I love them more than anything, but at ages 2 and 1 they are a handful and a half! From the moment I wake up until they take naps, it’s chaos. I get an hour or so of peace during nap time, then it’s chaos again until bedtime.
So, how do I still manage to bring in $1500 a month (on average) without the help of daycare or family? I’m glad you asked…
I wake up early. Usually, haha, my husband would probably argue otherwise. The girls normally wake between 7:30 and 8:00, so I try to get up by 7:00 at the latest to have coffee, read blogs and relax before the chaos ensues. Sometimes, I’ll get up at 6:00 and start working, other times I stay in bed until the girls wake up. That’s one of the joys of working from home 🙂
Nap time is a MUST. Anyone with little kids knows just how precious nap time is. I couldn’t get through my days without it! That being said, I try to do an activity with the girls in the morning to tire them out for the afternoon. This morning, for example, we went to the library, walked down to a local coffee shop and stopped by the grocery store. We were only gone about two hours, but the girls are both sleeping peacefully right now.
I write lists each day. I’m a list-maker and a goal-setter by nature. If it’s on my list, the task is going to get accomplished that day no matter what. I leave no room for error, BUT…
I ALWAYS work ahead. If an assignment is due on the 10th, I complete it by the 8th. If invoices are due on the 20th, mine’s in by the 18th. THIS is how I leave room for error. If an emergency comes up and an article on my to-do list doesn’t get done, I still have a few days to complete it without panicking. (I will say, though, that this has never happened. Talk about type A personality.)
I work everyday. I know, I KNOW. This sucks, and is actually something I’m trying to get better at. How I see it, though, is if on Saturday afternoon my girls are napping and my husband is watching football, my time is best spent busting out an assignment. That gets me ahead even further and allows extra time with my girls during the week when my husband is at work. It’s really hard not to think like this. If I have the time, I’m going to be working. Having two kids allows for plenty of “unwinding time” – park trips, play dates, walks around the neighborhood, playing with toys, baking together, etc.
When I’m working, I’m incredibly focused. Whether I’m writing an article, answering emails or editing, I stay focused on the task at hand. The internet is definitely a huge time-suck, so I don’t allow myself to log onto Facebook or read my favorite blogs until I’ve completed the assignment at hand. This method not only keeps me from getting distracted and prolonging the length of time to get an article done, it also motivates me to complete it so I can goof off, haha.
I like what I do. And finally, the best reason I’m able to stay productive is because I really enjoy what I do. The fact that I can provide some extra income for my family without having to put the girls in daycare or leave the house is a blessing. I love writing and I’m excited to see where this journey takes me!
How do you stay productive?? I would love to know your secrets!!
To keep track of how we’re doing financially and how we’re increasing our net worth, it only makes sense to list out our fixed expenses for the month. Last month, you saw we only brought in $1,885. If this keeps up, we will be broke before we know it (it won’t…we moved from Arizona to North Carolina at the end of August and my husband was out of work for the month of September).
Our fixed bills
- Apartment rent $1,305
- Car payment $336
- Cell phones $130
- Car insurance $88
- Internet $35
- Netflix $8
- Electric $100 (average, probably less in the winter)
- Water $50
Total monthly bills: $2,052
Our variable bills
I’m not going to list out our variable bills because, well, they vary each month and I don’t see the point. While my husband and I do tell our money where to go each month, I don’t like to use the term “budget.” I’ll do a post on this, but our philosophy is we buy what we need and anything else we think about and see if we can afford it. I’m not going to budget $80 a month towards entertainment, because most months I don’t want to spend that much on entertainment. I’m also not going to budget $100 for diapers, because if we need more diapers before the month is over…we’re buying them! Those are a need and we will get those no matter what.
Instead of budgeting $500 for food, why not meal plan, cook at home as often as possible, buy items on sale and use coupons?…all the time. That’s what I do and it works great. Some months I’m sure I spend a bit more and others a bit less, but overall it evens out. We also only buy what we want to eat within that week. I hate stocking up on food, because most likely it will just sit in the freezer for months before getting thrown out.
Assuming we need $3,000 per month to live, that means I would like our income to get to $4,500 a month to allow us to save and invest. Since John’s income goal for October is $3,000 and mine is $1,700, this is very realistic for us right now.
Readers: How much do your monthly fixed bills cost you?
On the first of each month I’m going to lay out our goals for the month, and then at the end of each month I’m going to recap our income and see if we met our goals. Since my husband and I are both self-employed, our income will fluctuate and it will be interesting to see our income grow (hopefully!) over the months/years. I also plan on talking a lot about our investing strategies and what we’re doing to generate a passive income. Anyways, on to the goals…
Sarah income: $1700
- Editing $800
- Writing $900
- Get one financial staff / guest posting job, paid or unpaid
John income: $3000 (first official month as a business owner — not bad!! Hope we hit this!!)
Get more organized with couponing
Set up IRA’s
- John rollover: $7,990
- Sarah rollover: $1,750
Get Synchrony savings account finalized. We are putting $20,000 into a high-yield savings account with Synchrony. More on this later…but why earn .05% interest when you can earn close to 1%?
Wake up earlier. While this isn’t specifically related to finance, it will help us reach our goals. With two little ones who still wake frequently throughout the night, it is H.A.R.D. to wake up before them. Since our move involved a 3-hour time change, the girls have been sleeping in until about 8:30 every morning. While I’m thankful for this extra sleep, I know I could accomplish so much more throughout the day if I committed to waking up at 6:30 or earlier.
Research more on investing. John and I are relatively new to investing other than having our old company 401(k) accounts. We hope to grow our investments immensely over the years – getting involved in everything from SEP IRAs to real estate.
Read one actual book. I am a knowledge-junkie by nature, but when it comes to reading an actual book…Well, I can’t even remember the last time I completed one. I checked out two from the library today and am hoping to read both of them…but my goal is just to complete one.
Go to Asheville, NC / Blue Ridge Parkway. Another personal goal, but now that we live on the east coast we need to start exploring! Blue Ridge Parkway is ranked one of America’s Most Scenic Drives, especially during the fall. Leaves change color mid-end October and you can bet I will be experiencing this!!
What are your goals for October, finance or otherwise?
This is a personal finance blog so I plan on being extremely transparent with our finances, goals and how we’re going to achieve financial freedom. After all, if I don’t include “the numbers,” how are people supposed to know how we’re doing this??!
John and I both work for ourselves. It wasn’t always this way, though. After graduating college, I had a few finance-related jobs (mortgage industry, sales and a university) but didn’t really love any of them. They all involved cold-calling, sitting behind a desk for 8+ hours a day and didn’t provide much room for advancement.
After getting pregnant, John and I decided I would stay home to take care of our baby. Being a stay-at-home mom has always been a dream of mine, and I was super thankful I would be able to do it. Before having our daughter, I knew I wanted to try and get into freelance writing. Stay home with my baby and bring in an income? Yes, please!
So I did just that. I got lucky and a close friend of mine got me a small freelance job at her company. From there, my career has grown leaps and bounds and I hope to only grow even more.
John is a painting, drywall repair and handyman extraordinaire. He worked for himself for a while, but after we had our daughter he decided to work for a company. While he learned so much on the job, he knew eventually he was going to work for himself again. Let’s face it – there’s nothing better than setting your own hours and being in control of your income.
We had our second daughter and moved across the country from AZ to NC when they were 2 and 1 (that’s a whole other story, tho!). After being here a month, John decided to start his own company – Brookstone Painting and Residential Services – and I couldn’t be more proud! We’re now both working for ourselves and have our financial future in our own hands.
Breakdown of our income 9/2014
We sold our house in the summer of 2014 and profited a nice $46K. Between moving expenses, buying a new truck for John and getting ourselves afloat for the first month, we spent around $10K (I’ll do a specific moving cost breakdown in another post).
Sarah’s Income 9/2014
- Freelance writing $650
- Freelance editing $800
John’s Income 9/2014
- Job that didn’t work out $360
- First job self-employed $75
Total for 9/2014: $1,885
As you can see, we are not rich by any stretch of the imagination!! Though, John’s income will hopefully be producing 10x’s this amount within a month or so. We are also getting some of our investment accounts squared away, which I’ll go into detail later, as well.
Prior to our move, we were making roughly $4K a month after taxes. Our goal is to be back up to that number in October and go up from there.