Saturday, August 27, 2011

Financial Peace

This is the blog post that is probably going to be the hardest to post. It's easy to talk about money, just not your own. For some reason, though, I feel this calling to do this post. It's been calling me for a few months now. I've resisted, given it some thought, and finally decided to take that leap.

It's not for me. Perhaps there is a family of a T-18 baby out there who's wondering how they can cut there financial lives back to a single-income household. Maybe not. Still, I feel led to write this post.

What I am not trying to do is put myself up on a pedestal and give a financial holier-than-though attitude. This is our lifestyle. Plain and simple. I am also not using this as a way to secretly ask for money. I would rather use my talents to make money than to ask for it to be given. But we're not at that place, so please note that I am not asking for money. I'd like to add that we have had a few anonymous people send us monetary gifts. There have been times when I don't know what we would have done had these gifts not come. Other times, they have lightened our financial load. Some of these gifts have allowed me and Dave to spend a much-needed night on the town. We have tried to use the monetary gifts for purchases mainly for Lily, but sometimes we've used them for Gabriel and Soleil and things they need. Occasionally, they have been for personal items, but we try not to use them frivolously. There have also been times when our parents have helped us, but it's been more like helping with gifts or vacations. We certainly appreciate all they've done, and never intend to "mooch" off of them.

Where to begin? When we found out about Lily having T-18, both Dave and I were working. I was contributing about 52% of the income. The rush to go to a single-income household wasn't really there because we didn't know what was going to happen to Lily. I didn't want to quit my job and then something happen to her and be left at home to dwell in that sadness. On the other hand, we also didn't know how we would be able to afford it. After she was born and it was time for me to go back to work, we decided to have someone to come into our house and watch her and Gabriel. This was not an easy decision because of the scary nature of that and because it was going to cost us a lot more than what we would have paid for both Lily and Gabriel to be in daycare. But daycare was not an option.

After four months of the stress of leaving work twice a day to go home and nurse Lily, and our babysitter finding a job in the career she went to school for, Dave and I decided that we would just have to take that leap and one of us stay home. Although I made more money, it was obvious that I should be the one to do just that.

We had a little in savings and had already been working on a bill pay down plan, so we stopped contributing to an IRA that we were contributing to, paid off a bill, consolidated another bill, and consolidated Dave's student loans. We set up a new budget, too.

I don't know how we've done it. There have been many contributing factors that I can say, yes, those helped, but there have also been some very mysterious happenings that perhaps God himself had initiated to help us through all of this. Income tax checks and extra work, a little government intervention and employment payouts have helped, but still, there are some things that are unexplainable.

In the time that we've been in Charleston, basically a year, we have paid off our car, our only credit card, and my student loan. Getting rid of those debts lifted a large weight off of our financial load. We have used Dave Ramsey's model for paying off our debts, but I must admit we don't have that "gazelle intensity" that he talks about. There are times when we probably buy things that we shouldn't and contribute to a debt instead, but we are human, and we know that we cannot deprive ourselves of everything. That leads to disaster. I also am a big fan of the tv show "Til Debt Do Us Part," and try to follow some of Gail Vaz-Oxlade's suggestions.

Our budget: We use Dave Ramsey's Monthly Cash Flow Plan and Allocated Spending Plan (both of which can be printed from his website) to create our budget. We do this each month.

The first item is Charitable Gifts. I must admit that we do not give monetarily as much as I would like, but we do try to give a little of our money and a lot more of our time. I'd like to see both of those types of charitable gifts increase, for I believe in the "Pay It Forward" philosophy. Since the new school year brings a small increase in income, Dave and I have been able to increase this category a little.

Savings comes next. Right now, our savings is mainly in the form of putting money away for short-term items like taxes, car/house repairs, clothing, office supplies, gifts, and goals that we have, but those aren't really in our "savings" column. I'll talk about them later. When he started this new job, Dave decided to take a break from contributing to retirement. If we don't contribute this year, we will definitely make it a priority next year. It's not something we like holding back from, but it has helped us pay off a few bills and afford to live in a slightly better area.

Housing: We were unable to sell our house before we moved. Luckily, my brother rents it from us, but we don't make any pocket money off of it. What we make goes right back into it. Plus some. We are actually putting a little more into an equity payment attached to that house as part of our bill paydown plan. We recently bought a house, and luckily, Dave's school switching to a year-round schedule gave us a small "chunk" of money with an end-of-the-year payout. We were allowed to use that towards closing costs. Plus, we borrowed a small amount from my mom, and we'll use our tax refund to pay her back. Actually, our closing costs were a lot less than we expected, and we could have depleted our short-term savings and taken that leftover amount and paid her back, but she told us to keep in just in case we needed it and pay her back later.

Utilities: We budget $150 for electricity and $50 for water. Since we've moved, we may have to adjust that. What that means is a 79 degree thermostat (in the summer) and 67 (in the winter), which we find keeps us comfortable with our ceiling fans on, not using the dishwasher every night, turning off lights and tv's when they aren't in use, taking shorter showers, and bathing the kids together. In the winter time, I give myself permission to take one long, hot soaking bath per month. Like I said before, I can't deprive myself of everything. We have cable, which we mainly got for football season because going out to watch football is not possible with three children and it can get expensive. But we also don't go to the movies very often, and we know where to get free movies and cheap movies. We both have cell phones that have internet access, but we don't have a home phone. When we bought them, it was cheaper because we didn't have internet. Now, it's become a luxury. But it does come in handy in many ways. And we pay for internet, but that's pretty cheap for us right now.

Food: This is the one I'm proud of. I was watching The Today Show or something like it the other day, and they said the average household spent somewhere around $800 on food. Blah! We could never afford that! Our grocery budget is $290--one hundred of which goes toward our CSA for fruits and vegetables. So we budget $190 to spend at the grocery store. This includes toiletries. It's actually quite easy. . .and healthy. What we don't buy are sodas (unless we have company over), a lot of processed foods, and a lot of junk. (Read Michael Pollan's books, and you'll understand.) Our snacks usually consist of a GORP mix or popcorn and sometimes ice cream, but we've been making that ourselves lately. Occasionally, I'll buy crackers and sometimes canned fruits and vegetables, but we try to make it as fresh as possible. Meats are bought when they're on sale and we try to have leftovers. It's humiliating, but I'm being as safely transparent as possible, but we do receive WIC. We usually get a lot of meals out of the eggs, tuna, and beans, too. So, yes, it helps our grocery budget, but we usually have a little money left over, so we could probably be safe without it. It's just nice to have that "safety net." Plus, with school starting back, Gabriel doesn't eat breakfast and lunch here. Oh, and I don't use coupons.

Restaurants: We budget $50 for going out to eat. Dave's a good enough cook that eating in isn't too bad, but it's nice to have a change eating out and not have to clean up afterwards.

Transportation: We budget about $250 for gas and $70 for taxes and repairs. Dave has begun to carpool with a fellow teacher, so hopefully we'll be able to cut our gas bill.

Clothing: Ladies, don't panic! We budget $40 for clothing: $20 for me and Dave and $20 for the kids. Gabriel's school has uniforms, so he doesn't need too many clothes. I do love buying clothes for the girls, but I only buy them if they are dirt cheap. It's nice having an outlet mall near you! The last purchase I made for them was for two shirts. One was $1.74 and the other was $2.38. As for us adults, Dave doesn't feel the need for new clothing. Sometimes he has to buy something to replace a worn-out article of clothing, but I am forever on the lookout for the $5 t-shirt. Since I don't work, I don't have to have nice dress clothes. I complain about it sometimes, but really, shopping frustrates me because I have trouble finding things that fit the way I like them to fit. And sometimes I look in Goodwill, but they've gotten to be expensive, considering.

Medical: We budget $200 for medical bills and $40 for medicine. Lily is on Medicaid. That has saved our financial lives. Personally, I'm not proud of it, but she deserves it, and that's all that matters. If our bills are over $200 each month, I call and make payment arrangements. Luckily, everyone has been very accommodating. But it sure is nice when all medical bills are paid up and we don't fully spend the $200!

Personal: We have things like life insurance that I'm not accounting for in this post, but we do have those bills. We put aside $5 for office supplies (also mentioned in savings), $25 for gifts, and $16 for karate for Dave (a man's lifesaver!).

Allowance: Gabriel gets $12 for allowance, but that will go up to $16 when he turns four. He puts 5o cents in each labeled jar: savings, spending, gifts, and donations. The other dollar, he puts in the jar of his discretion. Sometimes he breaks it up; here lately, he's been giving it to himself in spending. We RARELY buy him things, including the cereal that he wants (we get cereal with WIC). When we do buy him something, it's because we would like to give it to him, not because he's screamed for it. The last toy we bought him was a housewarming gift we let him pick out when we moved. I really can't remember if we bought him a toy in between then and last Christmas, but he has bought himself a few things. The way Dave and I see it, we'd rather enrich Gabriel's life by spending time with him and taking him places than to buy him things that will never truly make him happy. Plus, he has plenty of toys that he's very happy to play with.

Extra: We allot $30 to "blow" money. This is money that we can just spend on whatever. $30 goes to entertainment that could be a restaurant but doesn't have to. $50 goes towards vacations, but we don't always put that much aside because this comes out of our bank program that puts a dollar in savings every time you make a purchase. Most of the time, we're always under budget with this one.

Student Loans: We have Dave's student loan to pay off. It's a pretty hefty sum, but we hope to have it paid off in the next four or so years.

Goals: I've already mentioned that a small part of our savings consists of goals. This money does not come from Dave's teaching income. Dave also writes grants and does part-time work on high and low ropes courses. I make pies that I sell around Thanksgiving and Christmas time and do a little cake decorating. The extra money that we make goes toward our goals. There are times when people might think that we spend this frivolously, but we don't. We've made a list of things we'd either like to buy or do, put them in order of importance, and marked them in our goals column. And if it's something to buy, we wait until we find a good deal. We bought a flat-screen tv. While that may seem frivolous, Dave had been wanting one for years, but he didn't want to pay more than $10 per inch for it. About six months ago, he found one at Sam's on their clearance rack for about $10.40 per inch, so we bought it. We bought iphones. Yes, we knew we'd have a more expensive data plan, but we got the iphones refurbished. Dave paid $20 for his; I paid $9.53 for mine. They listed for $200. Some of our goals are pretty expensive. One of mine is to go back to South Africa. I'd like to take all the kids with us, and that's going to be pretty expensive. But I want to go and meet my newly found T-18 friend Taryn and let her daughter, Mikayla, and Lily play with each other. Plus, I'd like to go back to Kruger National Park. Once we get our bills paid off and if I go back to work or start doing something from home, who knows, maybe this dream will materialize. I don't mind being patient.

Our budget, our goals--yes, they require sacrifice. Sometimes, I hate those sacrifices. But I know that they are molding me and making me more appreciative of what I have and more aware of what others don't have. That awareness spurs me to want to take action, and I take action when I can. I remember when I lived in Augusta how Chick-fil-A was about a twenty minute ride from my house, so I would only go maybe four times a year. Oh, how I love Chick-fil-A! Then they built one down the road from us, and it became a five minute drive. Rani, Autumn, and I would go every Thursday, and they would get a free kid's meal and I would get my regular value meal. After a while, I didn't appreciate Chick-fil-A so much. It kinda got boring, and I got to the point where I really didn't want it anymore. Now, we don't go to Chick-fil-A very often, so I've grown to appreciate it again.

That's how I equate our sacrifices. If I could get Starbucks every day--which I would love, love, LOVE to be able to do!--I'd do it, but I think--no, I know--I would lose the love/appreciation that I have when I get that latte. I would stop enjoying it. Getting a venti decaf vanilla latte makes my day! I think I'd like to keep it that way.

If you've made it this far, CONGRATULATIONS! I know this was a long post. I know I disclosed a lot of. . .um, personal. . .information. And I know I'm not perfect. Our budget is only a budget, and we could stand to perfect it. I hope it has given inspiration to someone out there who may be thinking about staying home with the children or even to someone who may be looking for happiness in. . .things. It's not there. I know. While living our budget is hard, and I complain about it sometimes, I am not unhappy. I am fulfilled, and in the little that we think we have (because God knows, there are a whole lot more out there who have less than we do!), I find myself. . .blessed. And I know you will too.

1 comment:

  1. You were already my hero and now you are TOPS! I am terrible with finances. Sounds like you made it a priority. You are one busy momma!