Budgeting Hurts my Brain

Our current envelope system. I’m going to change it for envelopes that have zippers to keep change in and change gas (which we do through debit at Costco for cheaper) to entertainment (which I forgot to include).

I’m serious. My actual brain throbs. It doesn’t make sense, but I swear the feeling is there.

So, as I’ve talked about in the past we’re doing the debt snowball method to rid ourselves of debt, I’m awful with money, blah blah blah. Everything kind of got put on hold with having a baby. I didn’t even track our spending for a month after she was born, which is something I’ve done for the last two years. It felt like we were back at that place where we were a few months ago where we couldn’t put a full tank of gas in the car for fear of not being able to buy groceries before the next paycheck. It’s not a place that I like to be.

So I decided to do something about it. I never did start up our cash envelope system that everyone recommended. I still didn’t start it until the 20th of last month (one of the days my husband gets paid). I kept thinking that if I took our income and subtracted the bills, we’d have a number for spending and we’d just put it where it needed to go at the time. That just wasn’t working. Every. Single. Paycheck. we’d end up spending into the next before it came in. I was constantly worrying if we had enough. I was avoiding doing the math on my tracking sheet because I knew that we’d be in a deficit when I did it. Something had to change.

That’s when I saw this post by That Mama Gretchen. Probably nearing a year ago, when I finished reading Total Money Makeover, I made copies of all the sheets at the back of the book that you’re supposed to write your money information on. I put those copies on my desk with the plan on filling them out in the near future. I’m living proof of why that first page where you say when you’re going to finish each page is important. I just never did them.

After reading Gretchen’s blog post, I finally decided to take the plunge. Wow. Some of those numbers were terrifying. Seeing on paper how much we’re “worth” was horrifying. Even if you don’t count in the mortgage, it was an awful number. On the other hand, some of the pages were amazing, like the one where you take your expenses over a year in categories where you’ll end up paying a lump sum and divide it by 12. How did I never know to do that?!? I feel like I’m budget illiterate. It amazes me that this sort of thing isn’t taught in schools. I need this much more than I’ll ever need algebra (though I still think we should learn that too).

An example of the ledger I keep in the envelope to tell how much we’ve spent and where.

The most important form, in my opinion, is the monthly cash flow plan that Gretchen mentions in her post. It was difficult determining exactly what we needed where. And I’ll be honest, I’ve messed up in multiple places. I forgot my student loan payment (since I took spring semester off and one of my loans is through a different company with a weird policy, I didn’t have a grace period) for April, thinking that we wouldn’t pay it because I was starting school again and therefore would get deferment again. Yeah, school doesn’t start until May. I also didn’t expect to make some money from selling diapers and one of my secret shop companies. I also entirely forgot to put spending money in our entertainment category. Like that’ll happen!

So things have been modified along the way. I’ve had to take money from one envelope and move it to another. I’ve been wrong on how much we’ll need in one category from this paycheck versus the next paycheck (obviously you can’t put all of your cash into your envelopes at the beginning of the month if you’re paid multiple times a month). Things have been changed around a lot. I’ve gotten frustrated¬†a lot. I’ve literally called my husband near tears telling him I can’t figure out where such-and-such money went. With work and determination though, it’s worked out.

I’m proud to say that we lived through a whole pay period without overspending. Beyond that, some of the envelopes still had money in them. We made it through two weeks without overspending. It may not be much of an accomplishment to some people, but it is to me. And we managed to pay an extra $155 to our credit card as part of our debt snowball too.

I’ll continue sharing our financial journey with you all. I know that budgeting may seem off topic for this blog, but it’s an important part of parenting. Other moms often tell me that they could never be a stay at home mom because they need the income. This world is truly not made for one income families anymore and I understand that. It’s a battle every day to make ourselves survive on less and, beyond that, thrive on less. For our family, it’s important that I’m the one here raising our children. I know that not every mom has the ability or want to do that and I have no problem with that, it’s just a priority for our family. It gives me the opportunity to do many of the things that I talk about on this blog, such as breastfeeding, gentle discipline, and so on. I also know that working moms can do a lot of those things too. That’s not my point here. My point is that budgeting does fall in the realm natural parenting because in my world, part of natural parenting is surviving on one income in a two income world. So I’ll continue to share in hopes that it helps some of you out there thrive on less money.

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Envelopes and Basketball

While looking at this picture, you must say "Yao Ming Smash!" in your head in The Hulk's voice.

As you all know, I started full disclosure with my finances last month. That post went up two weeks ago, but it actually documents my spending in the month of September, which means it’s really been over 3 weeks since I updated. I got a lot of really helpful comments on that post and I’ve been doing my best to put these into action.

One of the most suggested things was to start a cash envelope system. I know that I mentioned our debt snowball in my last post, but at that time I hadn’t actually read Dave Ramsey’s book. I listened to the audiobook about a week ago and one thing he mentions in there is that a budget isn’t meant to be constant. For some reason, I thought that if I tweaked things just right that I would eventually come up with the perfect budget for us and we’d just keep using it. Instead, I went over the next few months and decided what bills we had and how much money was left over afterwards. After coming up with the total for this month (which was incredibly low because I didn’t actually do this until we were over half way through the month, so I had been using my constant number, which was too high in the case of this month, up until this point) and withdrew exactly that from the bank. I haven’t gotten as far as putting specific money into specific areas (something I plan on doing next month when I actually have money to put into areas), I do know exactly how much I have to spend. It’s actually a huge weight off my chest and I’m loving it.

The second thing that people kept repeating was that we needed to cancel our cable. This was Really. Hard. To. Do. Mostly for my husband. While he is entirely on board with getting out of debt and in general changing our spending habits, he isn’t too happy about giving up things he loves. For me it doesn’t really matter if we have cable or not because I can watch all of my shows on Hulu, but for him it’s the basketball. He’s not just a fan, he’s one of those crazy people that knows Every. Single. Stat. from games a decade ago. He’s not a huge book reader (internet is entirely another story), but he read an entire book about the history of basketball in probably about a week and it was over 700 pages long. I know that guys love their sports, but he really loves his basketball (and enjoys sports in general really).

And this isn’t the first time we’d discussed cancelling our cable. We started to talk about it somewhere around a year ago. This summer we actually threatened to cancel and got $20 off our bill. What kept bringing us back was the basketball. Even with NBA League Pass Broadband, it was still a hard choice. He couldn’t get NBA TV, he couldn’t get the blackout games, he may have issues getting all the Jazz (our local team) games. So we put it off.

When I posted about our money situation and everyone said to get rid of it, I started thinking again. I brought it up here and there and eventually we had a big fight discussion about it. He said to bring him the numbers. So I sat down and worked out how much it would cost us over the next year if we A. Stuck with DirecTV and even renewed our contract when it’s up in May so that we could get a discounted price again=$700; B. Cancelled DirecTV (with a cancellation fee) and did Hulu Plus instead=$225; C. Cancelled DirecTV, got Hulu Plus, and the basketball season (which is currently in lockout in case you didn’t know) started this upcoming month (which, of course, it probably won’t considering they got a federal mediator and still couldn’t figure out a deal) and therefore we bought the cheapest Roku (so we can watch the games on the actual TV since they don’t have a League Pass app for the PS3) and the cheapest League Pass package (just 7 teams)=$500, or D. Cancelled DirecTV, got Hulu Plus, got the most expensive Roku, and got the most expensive League Pass=$600. This doesn’t even consider the fact that the basketball season may start even later and therefore League Pass would likely get a nice discounted price.

With those numbers, he finally agreed. I called today and, to the dismay of the man on the phone, cancelled our DirecTV. Whoever said in a comment that they really don’t want you to cancel was right. He wanted to offer me deals, he talked about how much we’re going to have to pay upfront to cancel ($20 for every month left in the contract, so $140 for us), he tried to get me to just put the account on hold, blah blah blah. I told him no and that he’s not talking me into keeping my service. It shuts off at midnight tonight.

I know that some of you are probably reading this and thinking we’re crazy. I know that some of you are thinking “Why do they need to get Hulu Plus or NBA League Pass to make up for their lack of cable?” It all comes down to different priorities. Television is a hobby of both my husband and me. It’s how we spend time together. Therefore, it’s important to us. I know that we need to “Live like no one else so that one day we can live like no one else,” but there is a limit. You still need hobbies in your life in order to be a happy person. I like being a happy person.

I’ll do a follow-up later this week on the actual money we’ve spent since this became a much longer section than I had anticipated.

Do you have cable TV? Did you decide to give it up? Was it as big of a deal for you as it was for us?