Wednesday, February 28, 2007

Frugality

This has been a hard week of facing reality. We've been starting over with our budget and planning. We're working on the budget for our current situation, which looks great, but we're also working on the "baby budget" which is what the world will be like after I stop working (no, I'm not pregnant yet). That part is not so pretty. Not good at all. It should be fine, but isn't. My husband makes a great salary - and we've had many years now of two incomes. So, we've had the opportunity this week to think about WHY it is that things will be so tight.

We don't seem to be spendy people...at least to us. Compared to our friends and co-workers, we seem to be pretty frugal. (Ok, except for eating lunches out way, way too much. But even then... they were cheap lunches, and we weren't getting coffee everyday like many people we know.) Yet....here we are. After 8 years of living with two incomes, it is going to be really tight with just my husband's very good income. It shouldn't be. So, why?

Well, first - our house payment is pretty darn high. It's ok when it is based on two incomes, but it's too high for just his. We have a duplex we can sell if needed (to put the equity towards our principle) - that was actually our plan when we bought our house. Somehow, all the realtors, finance people, etc. convinced us to try to keep it. So, try we are... but our original plan was to sell it, and it looks like that might have been a smart plan.

Secondly, we are still paying school loans. Some of it is from undergrad, and some is from hub's masters. I HATE still having school loans. We keep playing the game of it being the cheapest money (cheaper than our house loan interest rate), but oh how I would love to just have it GONE. I do NOT want to be 50 years old and still paying for school. I also hate it because it just feels like it should be smaller/easier. My parent's paid for my schooling, but we had loans for hub's schooling, and then used some of the interest-free ones for life during college. I tend to forget about the "life" part, and tend to think this loan is just for one of us. To me, that makes it even worse to keep it around for years and years.

Finally, and most importantly, as much as I think we're not spendy people, I AM a spendy person. I'm not frugal, as much as I long to be. We don't spend money on "needless" (ha ha) things, but if we "need" something, and if it seems reasonable, and if we think it's a good price, we buy it. Immediately. Again and again. I think we need to figure out how to just not spend money. This is going to take a lot of change. I'm terrified of it. I don't know how to not buy something when I "need" it. I hate knowing that the way my brain is working is just wrong and needs to change. It's one thing to change behavior, it's quite another to change how you think.

This shall be a journey. I'm listening to Dave Ramsey everyday for inspiration, which is working well. Other than that, I just need to question every purchase decision I make and see if it's really a "need" or if there are truly any other alternatives.

So, here I am... feeling humbled, foolish, and a little beat up... but walking uphill, rather than tumbling down.

- kel.

3 comments:

momrn2 said...

May I offer a couple suggestions? Not to say we've arrived... but we have learned A LOT in the 12 years we've been married.

First, when we find something we want to purchase, even if it is on sale, we make ourselves wait at least 24 hours. Even if it is a "buy now or it will be gone"... we have learned to walk away. If it is gone, it was not meant for us to have it in the first place. If we still feel we want or need it 24 hours later, we reconsider. This has helped to alleviate a lot of impulse buying for us. And usually, 24 hours later we have decided to not spend the money on that item.

Another suggestion I have and have often heard given from Larry Burkett and Dave Ramsey, start living on one income now as much as you can. Use the money from your income to pay down the extra debt (school loans), etc. Your income also gives you a safety net in case you can't make budget on just his income for that month. That way, when you are ready to quit work and stay home, the issues will have been worked out and you will know exactly where you are in every category.

Continue listening to Dave. He's got some great advice!

Chin up and keep plugging ahead. Just the fact that you are thinking of it this much in advance is a huge success!

udandi said...

I agree the fact that you're thinking about it now, puts you in a better position.

There are many frugal and personal finance blogs out there that might help depending on where you're at, but pfblogs.org is a handy aggregator to sift through them.

good luck!

kel said...

Thank you both for your encouragement and suggestions!

MomRN - that's a good idea to wait before buying anything. I'm trying to practice that.

Udandi - thanks for that link - I love it!

The sad thing is that this isn't the first time we've thought about the baby budget or planned for it, and it's not the first time we've tried to live within hubs' pay. We always fail because we just don't have a good method for spending less. We're just not good at it. I know that sound stupid, but it's true. For example, when we recognized we were eating out way too much (although the budget said we shouldn't be) we agreed that it wasn't possible to follow the budget in this area while I was working outside the home full time. There's not money to eat out as much as we were. We were just not living in reality.

Thanks guys... keep the encouragement and ideas coming!