Anonymous

Dec. 9, 2009

My wife and I have started to not just track our spending but really control it. We set goals. Foremost is simply good stewardship. Second, we want to not spend the money so we can do other things with it--like pay off debt or improve our house (to sell it while the government is giving out 10%/$8k rebates). So we set a goal to exceed our goals.

The first place we started was getting rid of stuff. We are stufficated. It is very demoralizing to be owned by our stuff. I am an engineer. I love stuff--parts, pieces, stuff to tinker with. Our house has been a cluttered mess. So we would spend more money to forget about our overwhelming stuff problem. Our moods have lifted as the stuff has gone out the door. Now we want to get rid of more stuff instead of buying more stuff.

Next was controlling our money instead of being controlled by our money. We use the envelope system for common and easily exceeded budget items, like eating out (rarely done anymore), groceries, personal spending money, homeschool costs, clothing, gifts, etc. We fill the envelopes with cash (according to the budget) at the beginning of the month. If the cash is gone, we don't spend the money. We are flexible with things like groceries and clothes. There are some absurdly good clearances on clothing that we'd be foolish to pass up.

As for groceries, we are working slowly to fill our pantry (which expands as I build additional shelves). But we are also tracking grocery costs. It is amazing what a little coupon clipping and sale tracking can yield. We've even begun paying attention to what individual items cost (what a concept). We carry a notebook with us while we shop. Sometimes one store's sale price is still more expensive than another store's regular price, even with a doubled coupon. So we'll buy the item at the cheaper store that doesn't double our coupon. But we have to balance time with the money saved. But... My wife loves going out to shop by herself, while I attempt to manage our three children (ages 6, 3, and 1). She also gets a few hours each week by herself at the local coffee shop to puruse the sale adds, clip coupons, and organize her grocery list. She loves the time by herself and saves us money in the process.

We also don't fill the grocery envelope up at the beginning of the month. A fat envelope of cash is too easy to spend. So we ration the grocery cash. We divide our monthly grocery budget six ways--one sixth for each week, plus a sixth as margin for extras for the pantry or a few steaks for a cook-out on the grill with friends, plus a sixth as pure margin. The money is withdrawn weekly. The first month we did coupons plus weekly rationing (but no price tracking by store) saw a savings of about one fifth. We had money left over in many of our budget categories, not just grocery. I am excited about December as we tracked prices in Novemeber by store and have more experience with coupons and sale add shopping.

We use YNAB Pro budget software to track our spending. We can see where the major portions of our money goes via a report. We can track cumulative non-cash categories like auto maintenance, home maintenance and home heating savings. Everything is tracked. If we use a credit card, it is entered in the appropriate account register. The expenditure counts against the relevant budget line item(s). It is similar to writing credit card expenditures in your checkbook. There are no surprises at the end of the month--except to see how much we didn't spend.

We have paid off the only credit card we had debt on. We still have our mortgage, a pair of student loans and a car payment--all but the mortgage will be finished in about two years with no extra effort.

We are looking at selling our house and buying a fixer-upper for about 1/3 less money, 1/2 the taxes on more land with 1/3 more space--perfect for our kids, a garden, and some chickens. The house will need some work, though less work than our in-town house, and the work is stuff I can do myself. And we'll actually have more money to do the work with, since the house and taxes costs less.

These are exciting times.