Hey mommas!
Raising kids on a budget sounds difficult, but it’s actually totally doable! To be honest, it’s a lot easier than just winging it from paycheck to paycheck. I am going to tell you about my experience and break each section down with a fine tooth comb to help you better understand the importance of a budget!
Sitting down and physically tallying the amount of money that we shell out on a monthly basis is extremely eye opening. You will be amazed at how those pennies here and there adds up!
Disclaimer- I AM NOT a financial advisor, CPA, or a professional money expert of any sort. These are simply my suggestions that have worked for my family. If you are looking for professional help, please discontinue reading now. But if you are interested in some helpful tips I encourage you to read on!
Budget item #1: Monthly bills
My husband and I will sit down a couple times a year to reevaluate our budget. A lot of our bills automatically come out of our checking so it can make it a little difficult to keep track on a weekly basis. So, what I like to do is write down every bill in order by the date it is taken out; I also write down the amount. (I did this back when cash was more popular than cards, as well.) Paying our bills should be a top priority. Those pesky bills are not only what keeps a roof over our heads and allows us to own a nice vehicle, but they also help to boost our credit score!
Another plus to writing everything down is it helps you prioritize. Sometimes we can have extra bills for things we don’t actually “need”. Like, satellite T.V., extra gigs on our data plans, or even for a magazine subscription. Look at your list, prioritize starting with your largest bill (generally that’ll be your mortgage) then work your way down the list: car loan, insurance, utilities, cell phone……I want to pause here.
Something that saved my husband and I some money was realizing we didn’t need a cell phone and a landline. We used our landline about once a month. It was intended to be a back up in case of an emergency, but that “back up” was costing us almost $50 a month! Decide which phone is more useful to you then seriously think about eliminating the other.
Another item I like to prioritize, that a lot of people don’t think twice about, is groceries.
groceries are a necessity
Before I had kids I never thought much about budgeting for groceries. If I needed a gallon of milk, I’d buy one. If I felt like a premed pizza for supper, I’d buy one. But then my “shock of a lifetime happened” (we found out we were having twins) and we realized random purchases were going to have to stop.
Budgeting for groceries can be a little tricky. We had a rough idea what we spent for the necessities but everything changes once the kiddos come along. You then have diapers, wipes, formula, clothes they grow out of way to quickly, and the never ending supply of wipes! Needless to say, for first time parents it was supper stressful. But we decided to take it one step at a time, do a little research, and refigure our budget as often as necessary.
Step 1: Look at your families essentials that you can’t live without. (Toilet paper, paper towels, cleaning supplies, etc.)
Step 2: If you have babies or toddlers, get an estimated cost of their essentials. (Diapers, wipes, formula, etc.)
Step 3: Make a list of your “necessary” groceries. (Milk, butter, eggs, cereal, bread, etc.)
Step 4: Add the totals of steps 1-3. You can also add a little extra for some wiggle room.
These steps will give you an educated guess on what your monthly budget for groceries should be. You can always adjust as you go to accommodate your families needs.
Annual Bills
I like to take my budget a step further and add in those bills that show up once a year, namely taxes. (My husband thinks I’m slightly over detailed.) We know they are coming so why not be prepared! Taking a small amount out of your check every month is a much less devastating blow than losing hundreds of dollars all at once.
What I like to do is look at what we paid the previous year, divide it by twelve, then round it up to the nearest dollar. Taxes can fluctuate so better to have a too much in there than not enough at all!
budget item #2: Necessary wants
So far we have calculated our monthly bills, annual bills, and our groceries. Next we are going to look at our “necessary wants”. This would include cell phones, internet, even life insurance; basically they are things we could live without yet make life easier.
Once again, make a list, calculate the total, then compare it to the budget you have set thus far. If your monthly outgoing is more than your monthly income you will need to reevaluate, cut back, and make some changes. Start with what is the most necessary; for me it would be my cell phone. I feel safer knowing that I have a way of calling for help in an emergency. If that is the route you want to go but you’re not sure how to make it happen, opt for a cheeper plan; extra gigs and an iTunes subscription will not give you better reception.
When making these decisions try using a little common sense. It’s so easy to make yourself believe that you “need” certain “wants”. If you are struggling with any of your choices, make a pros and cons list; this generally helps me.
budget item #3: ELIMINATING Loans
I was raised in a household where “debt” was a bad four letter word. My parents built their house as they could afford. (They were fortunate enough to do the work themselves with the help of a family member who was in construction.) We never had new cars, they saved up and bought a used one they could afford. I’m pretty sure they never even owned a credit card when I was little!
How did they make this happen? A VERY STRICT BUDGET! If the money wasn’t there, they didn’t buy it. They prioritized every specific necessity you could think of, clear down to new tires and care repairs. Then they would prioritize their wants, making it possible to take a vacation every year. We rarely went out to eat, I don’t remember ever going to a movie theater, and we didn’t get the newest and latest toys. As a child I felt deprived, but now that I’m grown with three kids of my own I can see the logic behind my parents strategy. If they would’ve spent every extra penny they owned on the latest trend those family vacations, that we all remember to this day, never would’ve been possible!
Pinch every penny
My husband and I knew what our top priority was going into marriage- paying off property and college loans. We wanted to make life a little more comfortable before thinking about creating a little life. So, we doubled down and watched every penny that was spent. We didn’t eat out for months, never rented a movie, and I clipped coupons every week before I went to the grocery store.
People thought we were crazy and needed to “live a little”, but within a year we had the property loan paid off! About six months later we had the college loans paid off! We were nearly debt free (we still had a house mortgage) and was so proud to say that! It took A LOT of self discipline to pass the ice cream aisle in the grocery store but it was so worth it in the end; we paid off some debts and lost a couple pounds!
However, we did not make that happen so quickly by simply snubbing a tub of ice cream, we had to make MUCH bigger sacrifices. We never “wasted” fuel. Our weekly trip to the grocery store was made on Sunday after church, while we were in town. (We live in the country.) We also cancelled subscriptions to our satellite T.V. and lowered our cell phone plans to almost no data at all! (Good-bye social media!) But prioritizing where our money went for less than two years set us up for a much more comfortable future with kids!
budget item #4: Eliminating credit card debt
This is a very common kind of debt in society today. There are more credit cards available, even for those with bad credit, than there were 10-20 years ago. I remember my parents said they would physically have to “apply” for a credit card and would sometimes get turned down even with good credit. Oh how that has changed!
Credit card companies send out “pre- approved” cards quite often. (Feels like I receive a handful every week.)
First off, I did not apply for this card. And second, why would they offer me hundreds of dollars without knowing my credit? This is a fantastic ploy for them to make a ton of money in interest at your expense. My best advice- throw it away!
I may sound slightly contradicting here but I’m not against having a credit card, to be honest I have several. Occasionally I will sign up for one at a store to save a percentage on my order. But I do not use them to make purchases for something that I don’t already have the cash for! They are used simply to earn rewards or save a percentage on something I otherwise would’ve paid cash for. If you do any online shopping then you know a credit card is a must. However, it’s not a “must” to use it as though you have free cash…it’s a CREDIT card not a GIFT card! You will eventually have to pay it all back and if you can’t the credit card company is happy to lend you more time, with added interest.
how to reduce credit card debt
Self discipline is key when owning a credit card. Credit cards are common and somewhat necessary, yet they come with a huge responsibility. However, there are certain steps you can take to prevent yourself from building up a large amount of debt. What I recommend and personally do is use a card that gives you a set amount each month and will decline your card if you try to go over. This makes you more aware of the money you are spending, thus helping you prioritize.
Something else I like to do is keep every receipt for the month, even for a gallon of milk. Add them up before making a trip to the store. This will keep you within the limit on your credit card, as well as within your budget.
Another step you can take is to leave your card at home! This is probably the most affective way, especially for those “compulsive shoppers”. (We have all been guilty of this!)
No card, no money, no over spending…plain and simple!
Reducing credit card debt also helps us eliminate debt. Watching the debt decrease boosts our confidence to continue on the winding path to freedom from debt!
Budget item #5: MAINTAINING A WORKING BUDGET
We have covered all the ways to set yourself up with a working budget, now let’s learn how to maintain that budget.
There are 4 very important things to remember when climbing this mountain:
- Have confidence in yourself.
- Don’t be ashamed to ask for help.
- Ask a close friend or relative to keep you accountable.
- NEVER GIVE UP!
Remember, you are not the first person to want financial stability, nor will you be the last. There are many resources out there, do not be afraid to use them. My hope is that this post gave you an extra boost of confidence and a push in the right direction!
For helpful budgeting tools, check out this Budget Planner.
For some fun family tips read my post, How to Spend Quality Time With Your Kids.