Tuesday, January 4, 2011

Staying within budget ...

When Beatrice Kate was born, I resigned my position at a biotech company here in the Triangle so I could stay at home with her. Bea can't attend a public daycare until she is a little older (after 2-3) and it would have worked out to about my take-home pay each month to hire a private nanny to stay here. I wasn't about to pay someone what I got paid to stay with my baby... and who doesn't want to be a stay-at-home mommy??

So, as of July 2010, we became a one income family. It was initially a very rough transition. Casey and I had gone from living on two (relatively) decent salaries with no "real" financial responsibilities (aside from our home and cars). We were livin' it up-well, sort of. We've never really been ones for fancy electronics or new gadgets. In fact, the only television we own is the same television Casey had as a child. Seriously.

But we spent money on things that we enjoyed doing together. We traveled. A lot. We bought random things (like two kayaks). We shopped organic, non-couponed groceries ($9/lb grapes? Yes, please!). Lovely new clothes for a meeting that we might need to go to in 4 weeks? Good idea.

Of course, all this came to a screetching hault when Beatrice Kate arrived 11 weeks early. We had plans to sell our house, downsize a little and save, save, save. Those plans were quickly thrown out of the window when she was born.

So, when we made the decision for me to stay at home, we needed to change a few things about our spending and saving habits. We've tried a few things over the last few months and think that finally, we have figured out a system that works for us. A few of my other stay-at-home mom friends have asked about our system- so I thought I would share it here. It operates on a few basic budgeting techniques:

1: Tracking Expenses: We use this Excel spreadsheet to track our monthly budget. It includes our monetary input as well as our expenses, so we (theoretically) should always know where our money lies.

When we realized that we needed to stretch our dollars further than ever before; the hyper-planner in me kicked in to create an organizational system to track all of our expenses. For me, it's very easy to pay for things with the swipe of a debit card and not remember it later. Then, we're magically $200 less than what we planned at the end of the month and can't think of where the money went. To help remember, we save every. single. receipt. and every few days or at the end of the week, we'll input the expenses into the spreadsheet. Because I can't deal with clutter either- we keep a small basket on the bar in our kitchen to collect bills and receipts until they're filed away.

2: Coupons and Smart Shopping = Free Money: I've become quite fanatical about coupon shopping. It's my weekly challenge to see how little I can pay for items that we need for our home. What's my secret? Well, it starts with a little planning. I don't have the time to search out every coupon internet site on the planet; so I basically just stick to one site: Southern Savers. I've mentioned it before about how much I love this site. The lady who runs it nicely puts together all the sales from local grocery and drug stores and matches them up with available coupons. She also has a list of good "buy prices" for items to help you quickly know if you're looking at a good deal.

So, each week- I start by clipping coupons from our Sunday paper. To make quick work of finding a needed coupon, I have them organized in a 3 ring binder, in baseball card sleeves, categorized by "section" (freezer, dairy, pantry, beauty and hygiene, medical, baby and meat). Then, I head Southern Savers to figure out the best deals. Then, I plan a weekly menu (I'll get to that next) around the sales, match up the items with the coupons and specials that I have and head out to shop.

As an example for what kind of awesomeness you can produce by smart shopping with sales and coupons, we'll take a look at my most recent Walgreen Trip. For a total of $15 I purchased: A jumbo pack of diapers (in the next size up), two bottles of Pantene shampoo and conditioner,  a toothbrush, Nivea aftershave for Casey, three packs of gum, two bottles of starch, a box of dishwashing detergent and two bags of Halls cough drops. Now, what you do need to know is that we don't need all of these things right now- but we will use them eventually. And that's probably the biggest tip of all: buy things when they're on sale so you never have to pay full price.

3: Envelope Budgeting: This is a Dave Ramsey technique; but I first heard about it from this blog. Basically, it works by budgeting the old fashioned way- with real, straight-cold cash in envelopes. When the money in the envelop runs out for it's intended purpose... well, that's it. No more spending in that category. This doesn't work for most of our categories because we pay most of our bills online or by automatic draft. But, for groceries and household goods... it will work perfectly. Sometimes, I get a little too carried away with coupon shopping and turn into a bit of a hoarder. The 14 bottles of dish soap in my attic are proof positive of this. It's easy to go over budget in one category when you're spending invisible, debit-card money. So, to help get a grip on that spending, we're trying out the envelope system on our grocery money. It could get a little hairy towards the end of the month; but really there's no reason we can't make it happen. Check back later for more on this topic.

4: Meal Planning: One way to help us stay on budget with our grocery expenses is to meal plan. I've been doing this for a while now and I really, really love it. It takes out the guess work of "what's for dinner tonight" and means I only have to go grocery shopping one time a week. Really. That's it. This means we don't have to "run out" mid-week to get something to eat, where we would usually buy for convenience not price. It also helps limit the number of times we eat out each month.

I first heard of the idea on Org Junkie's web site and it's been working well for us ever since. Plus it's fun to link up to her site and see other great meal plans and menus. It's an easy way to get new, creative ideas for dinners. If you don't meal plan for your family (no matter how big or small), I highly recommend you start. It takes me all of about 15 minutes a week to plan a healthy, fresh menu for Casey and I (and now Beatrice Kate).

So, that's it! That's all our "secrets". Though, keep in mind that a budget is a highly personal thing and what works for us, may not work for you. What are some of your budgeting tips and tricks??

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