Monthly Budget Round-Up: July

It’s the last day of the month, so time to go through the budget I posted at the beginning of the month and see how I did! For this post, you’ll get to see the amount I budgeted in black and the final amount I spent in red or green (depending on whether it’s over or under budget).

Yucky Yucky Debt

  • Planned: $1400 + $2500 at the end of the month
  • Actual: $1293 + $5000 (!!)

Oh yeah. You read that right. $5000! I’m so freaking stoked. You’re probably all wondering, how did you get from $2500 to $5000? So, I sort of forgot that this was a three paycheck month for me (whoops!). Additionally, B.’s paycheck from the military has been sort of challenging to budget for, as it has been different every time. So I made my best guess, but my best guesses always tend toward the conservative side of things. I also underestimated with the original $2500, as I like to leave a little bit of a slush fund each month in case unexpected expenses occur (not Dave Ramsey approved…).

With that small victory dance out of the way, let’s see how I did this month:

Necessities

  • Rent: $1300                  $1300
  • Utilities: $260              $240
  • Cell Phone: $50           $47
  • Groceries: $500           $480
  • Gas: $200                      $166
  • Daycare: $980              $989
  • Maid: $206                    $174
  • Lawn care: $150          $148
  • Brian: $500                   $499

Other Expenses

  • Clothing: $200              $221
  • Gymnastics: $48           $48
  • Restaurants: $100        $87
  • Netflix: $10                    $11
  • Hair/Cosmetics: $100  $80
  • Fun money: $100         $70
  • Miscellaneous: $200    $138
  • Plane ticket: $0             $413
  • Doctor: $50                    $172

Hmmmm….I didn’t do too bad this month.  You can see, even after six years of budgeting, I still don’t remember everything that’s happening when I put together a budget. For example: doctor’s visit.  I knew that was happening (hell, it was on my calendar!) but I still forgot to properly budget for it. Also, our Netflix bill has never changed, but I apparently couldn’t be bothered to actually go look and see what the prior cost was. Finally,  I knew that daycare had some extra expenses due to a few events this month, but I also forgot about that when I was putting together my budget.

The plane ticket was unexpected, but I’m happy to have spent the money, as it will allow me to spend time with my sister, brother-in-law and their beyond sweet newborn baby.  I never ever feel guilty about money I use to spend quality time with my family! In this case, I had actually budgeted for a plane ticket, but not until August’s budget.  However, my nephew made his appearance a little early, hence the expense happening this month instead.

Overall, I’m pretty pleased with the way things turned out this month. A few things I forgot, one unexpected expense and (ahem) one category where ThredUp plus a glass or two of wine made an impact aren’t too bad. Goodness knows we’ve had much worse budgeting months than July. So, overall, I’m pretty pleased.

Final Spending Tally

  • Planned spending: $4704
  • Actual spending: $5283 

Not too bad, given that the difference between those two pretty much equals one plane ticket and one doctor’s visit that I didn’t plan for…

Tune back in tomorrow for an exclusive look at what August’s budget looks like! (Hint- not as good as this one!)

 

 

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Our take on the Dave Ramsey Method

In this previous post, I went through the basics of the Dave Ramsey method for achieving financial independence.  In that post, I alluded to the fact that while we subscribe to the general plan, there are a few areas where we differ from Dave’s recommendations. I would say that we generally follow about 85% of what he lays out (which is, incidentally, my approach to almost anything- diet, exercise, sleep, etc.  As long as it is good/works 85% of the time, it doesn’t need adjusting).

The parts we do follow: 

  1. Save $1000 
  2. Not acquire any new bad debt– both our cars are paid off and we never use the credit card we have. Any further cars will be purchased with cash.
  3. The debt snowball– it’s REALLY motivating to pay off debt, so the structure of the debt snowball really works for us.  Also, at this point, the only debt we have is federal student loan debt, so the interest rates are all reasonably low.
  4. Budget meetings and zero-dollar budgeting– When B was stateside, we had budget meetings at a minimum of weekly. Usually one big meeting toward the end of the month and little weekly check-ins each week.  Also, at the end of each month, we zero-out our money for the month and put whatever excess we have left (from areas where we spent less than we budgeted) toward student loans.
  5. Dave’s philosophy: “Live like no one else so you can live like no one else”- We are very conscious of our spending and make decisions that are different from a lot of those around us, in order to gain the financial independence we want. We rarely go out to eat, my toddler and I get all our clothing from consignment or thrift stores (for some reason, good quality consignment men’s clothing is hard to find), our cars are 15 and 11 years old, we rarely eat red meat, our phones are refurbished, older models and all our furniture is the “Ikea/Craigslist” special.  We agree with Dave’s philosophy that being intentional with your money allows your money to work for you and those are items that we just aren’t interested in spending money on.

The parts we don’t follow: 

  1. The baby steps, in exact order–  When we started this journey, we knew that even if we were laser-focused on paying down debt, we’d be looking at a minimum of 4-5 years to pay off all the student loan debt. Paying down debt is important to us, but not so important that we’re willing to sacrifice all our family time trying to hustle and pay it down faster.  We’re content with a 5 year plan. BUT. That means that not planning for the future doesn’t make sense.  As such, we have a fully funded emergency account (baby step three) and we both fully contribute to our company 401k accounts up to the amount the company matches.  Since we’re going to be paying off debt for at least 5 years regardless of whether we do these things, it didn’t make sense to us to forfeit five years of essentially free money (in the 401k match) while we paid down debt.  It’s true that in five years we will be able to pay a lot more toward retirement, but for now, we’re at least not leaving money on the table.
  2. We have a credit card– Dave swears that it is possible to not have a credit card, but that hasn’t been our experience.  None of the car rental places around our metro area will accept a debit card (we’ve tried)! Also, right now, the international charge for using the credit card is lower than our debit card would be, so B has mostly been using the credit card instead.  However, we don’t use it for daily purchases, mostly because we aren’t fully in a financial place where we trust ourselves to use it responsibly. Hopefully we’ll be there one day, but for now, it mostly sits around. I use it for gas once every six months so they don’t cancel it!
  3.  We don’t pay cash for most things– We totally used cash for clothing, restaurants, car repairs and fun money in the beginning, but we’ve gotten to the point now where there aren’t any areas of our budget that we’re likely to overspend on. I think that years of paying with cash was very necessary for us, as it helped us think about how much we were spending and how much we had already spent. But the thing is- that ability didn’t go away when we stopped using cash. I update our budget daily, so I’m always very aware of how much money we’ve spent and what we have left. As the need to self-regulate by using cash has receded, so has our cash usage.
  4. We are not “gazelle-focused”– When you look at our budget, there are certainly areas where we could cut back.  We could move to no restaurant budget at all.  We could get rid of the maid and the lawn care.  We could decrease our grocery budget and buy more rice/beans, rather than meat. We could get rid of our fun money.  But realistically, we both know that we won’t be able to stick to a budget that restrictive (and are profoundly grateful that it isn’t a necessity at the moment- I am acutely aware of the privilege inherent in being able to choose to afford luxuries).  So we tried to put together a budget that allowed us to put a decent amount of money toward debt while still allowing us to live our lives for the next five years.

So there you have it. My philosophy toward life in general is that most situations aren’t all or nothing propositions and our approach to budgeting and finances is no different. We took a lot of Dave Ramsey’s principles, combined them with our knowledge of what would and wouldn’t work for our situation and personalities and managed to come up with something that works for us, and works well. Is it 100% Dave Ramsey? Not at all. But it’s helping us accomplish our goal of financial independence so I’m okay with not following the plan 100%.

Any other Dave Ramsey followers out there? What parts do you follow religiously? Where have you fudged the rules?

 

 

July Budget

Our budget for July

download (1)

DEBT OWED: $153,000 (roughly) 

July Budget

Yucky yucky debt

  • Minimum payment: $1400
  • Planned extra payment: no less than $2500 (this is above and beyond the $1400 we would normally pay, so a grand total of roughly $4000 toward debt)

Necessities

  • Rent: $1300
  • Utilities: $260
  • Cell Phone: $50
  • Groceries: $500
  • Gas: $200
  • Daycare: $980
  • Maid: $206 (Trust me, with a deployed husband and a two year old, this is a necessity at the moment. Sanity and sleep allow me to make better choices in budget areas we usually suck at. Like eating out. Oh McDonalds, why are you so close to my house and on the way home from work??)
  • Lawn care: $150 (again, deployed husband + two year old. I feel really grateful that we can afford these small luxuries while Brian is away.)
  • Brian: $500 (Brian is in charge of managing his own money while he’s deployed. I just give him a chunk of money to work with. How he spends it is his own business.)

Other expenses

  • Clothing: $200- This is high this month. I realized that I have exactly zero pairs of shorts (note to self- clothing purging CAN be taken too far) and it’s hot.  Plus F (my rambunctious two-year old) WILL NOT STOP GROWING and has about grown out of the 3T wardrobe I purchased for her approximately two months ago.  So new (to us) clothes it is.
  • Gymnastics: $48
  • Restaurants: $100 (eating out has really declined as taking the toddler out to eat alone is a mildly terrifying prospect)
  • Netflix: $10 (because it’s cheaper than cable, but not by a lot because our Internet is freaking expensive)
  • Hair Care/Cosmetics: $100 (higher this month because I had a rare morning where I didn’t have to work but F had daycare and I got a pedicure! For the first time since…hmmm… I think my best friend’s wedding like 7 years ago. It was glorious. See you again in 7 years, oh great and relaxing pedicure chair)
  • Fun money: $100 (Mine to do whatever I want with over the course of a month. Lunch out? Afternoon coffee date? All coming out of this fund)
  • Miscellaneous: $200 (Because I’m terrible at budgeting (STILL!), I need a “slush fund” to catch random things that come up during the month.  It’s always capped at $200 because otherwise, I could probably find a lot of things I “need”)

Total planned expenditures (excluding debt payments): $4704

% of projected monthly income: about 50% (which is what we like to see!) 

We set our budget every month using Every Dollar. I love this software- it’s linked to both our bank account and our one credit card (that we never ever use except right now because it has lower international fees for my husband).