A Taxing Lesson

Well it's April and many of us are busy finishing up our taxes.

This year looking at my taxes and reviewing my finances for the year was a real eye opener. While we were happy to see that we pretty much broke even, (that's good it mean's we are not giving too much of our income to taxes throughout the year nor are we getting too little taken out), so we have things set up correctly, although it would sure feel nice to have a lump sum coming our way.  But this is not the case and it was no surprise.

What was surprising though was what I found after I took a good look at our income and financial state for the year.  I was surprised to find that although we made much less (due to income reduction at both of our places of employment) than we did the previous year and our expenses went up drastically (due to a tuition increase as our middle child entered into a private high school), we faired well financially.  By that I mean we did not incur any extra debt, and we actually payed down much of our consumer debt.  So in sum we lived on approximately $12,000 less last year and our financial picture doesn't look any worse for the wear.  It's actually better.  Not by much but better, still.

Of course I know this didn't happen on it's own.  It took  a lot of work, planning, strategizing, self control and prayer.

I still would like to be able to save and put money away for things I've mentioned in previous posts; kids college, retirement, vacations, replacement vehicles.  But so far that has not been possible.  And looking at our income to expenses ratio it may not be possible.  It appears that we are living beyond our means in one area- our childrens' private school, but we're not willing to give that up, we've made a comittment to it and to them.  In every other area I can feel confident in saying that we are living within or below our means, which takes daily sacrifice.  So realistically it will be very difficult for us to save.  But hey, who knows, God is full of surprises.

So in the end it means that we will have to continue to depend on God's grace to get us through and that's fine by me, because grace is really what has gotten us this far, and it's enough.

How about you? Is His grace getting you through?


With loving thoughts,
Elizabeth

Budget Part 2 -Down the Drain

Is this what you feel like is happening with your money?

I know it's been the case for me more times than I care to admit.  So I'm trying my best to not let this happen anymore.  I've been following a budget designed to eliminate consumer debt and assist me with saving an emergency fund along with funding other savings accounts.

In a previous post I outlined a couple of super simple starting points for taking control of your money:

1. List your expenses

2. Track your spending.

Now as promised I'll cover a couple more points:

3.  List your Net Income  (Take Home Pay)- Be sure to include all sources of income.

4.  Subtract your monthly expenses from your Income.

Do you have enough? If Yes then Yeah for you! (I'd pat you on the back if I could, but I can't so let's just pretend I did.)  If you don't have enough then you need to look at where you can cut or you need to generate more income.  I'll be sure to share more about this in future posts.  If you have extra then you pay more on any debts you have and you can begin savings.  Your right on track.  If you don't have extra and "just make it" then be sure to stay tuned for future posts on cutting back, because you know you need to get rid of that debt and should start saving.

5.  Make some decisions on where/how to cut back.  (I'll give you tips on what I do in a future post.)


6.  Begin to create a year-long monthly budget.  This will help you plan for things that come up throughout the year that we tend to forget about till they're due then we suffer through those months.  For example budget in the months when your car registration is due, budget in for the months when you have birthdays for those in your household (kids & spouse), when your kids have school or sports registration fees, back to school expenditures, Christmas, Mortgage Insurance etc.  That way you won't be hit by surprise with a super tight month. (Nobody likes those kinds of surprises.)
Now I know all this is super basic and simple.  It really is.  The hard part is getting motivated to do it and then remaining committed.  It's gonna take changes and sacrifices.  That's really hard, especially in the beginning.

Your going to have to say "No" sometimes, to yourself, your kids and your spouse.  We don't like saying "No".  Cuz yes is so much funner.  Yes, yes it is.  We like "Yes".  We no like "No".  But the hardest part is in the beginning.  It does get easier and once your on track you'll be able to come up with lifestyle changes that you can live with long term.  That's the ultimate goal.

I'm up for it.  Are you?

Let's keep moving forward.

Warm Wishes,

Elizabeth

Budget Basics

I guess the word of the day is the B word.  "Budget".  Yes it seems like many people from Obama down to little old me and a whole bunch of folks in between are talking "Budget".

The B word can cause a visceral reaction in some.  Stomachs tightens, lips curl and shoulders slump.

This doesn't have to be the case though.

If you learn to take control of your money instead of it controlling you, you can face your budget head on and not even flinch.

People that stick to a budget and plan their purchases, even budgeting in for fun, vacations and stuff, feel good about the B word.  They know it's a tool  A tool that can help them stay out of debt and begin to build savings.

I'm not going to go in depth here and I'm no financial guru but I've learned a few things over the last couple of years and I'm just gonna share what works for me.  (For those of you that have been following a budget and have no issues with debt- Hooray for you! I'm so happy for you!- (I'm clapping right now, you just can't see me)- then you don't need any of these simple guidelines)  For those of you who are interested or may be struggling with this issue read on.

I'll begin by covering a couple basic principals:

1.  Start by finding out what all your expenses and debts are.  You can use a simple spreadsheet or any of a number of programs available for this.  You may have done this before- felt sick and shoved it in a drawer.  If that's the case then do it again.  I list mine beginning with the biggest debt, the mortgage, then I list the next one, for us it's our children's school (it's equal to our mortgage- ouch!)  Then I list the next, going from any credit card debt, food, fixed expenses like cell phone bills or cable, internet services, gas, electricity, water, trash.  You get it.  Just list them.  List every little thing.  Be as precise as possible.  You may need to pull out old statements to do this or if you pay your bills on line (like I do) you can just pull up this info and enter it onto your spreadsheet. Oh, and if you have any unsettled personal debts that you owe to friends or relatives, list those too.  You need a plan.  So many relationships are ruined over unpaid debt- you don't want that.

2.  Track your spending for at least a month.  Save the receipts.  Later you will analyze what it is your buying.  Look at how many times you are going into the stores.  Little trips to Target, Walmart etc. really add up fast. Analyzing your spending will help you later when you are looking for areas that you can cut expenses.  We'll get into this more in a future post.  We'll look at how to control those variable expenses and more importantly how to control ourselves!

Good Luck and Warm Wishes!

Elizabeth

Waiting for Wiggle Room

I can't wait until there's a little wiggle room in the budget.  I'm hoping that'll be in the next couple of months.  Cuz I'm itching to tackle some bigger projects.

Things are so tight right now because of several visits from Murphy over the last six months- while we were in the process of paying off our consumer debt.

A little recap of Murphy's visits:

August: Repair Daughter's car: $1200
September:  Repair Daughter's convertible top: $300 (even though Hubby did it himself and saved us$)
October: Oven repair: $200
October: Pool Pump Replacement: $1600
October: New Tires for Daughter's car (Yeah I know not unexpected but we didn't plan for it) $600
November: Repair my Car: $2000 (Ouch!)
December: Hubby got into an accident and we had to pay the deductible: $300
January: Unplanned Trip for Hubby to visit nephew who's being deployed: $450

Total:$6,650! Yikes!
I don't want to see Mr. Murphy for a long time.  He is not welcome here!

Good news is... We managed to pay for all of the above with hard earned cash!  We didn't rack up credit like we may have done in the past.  Instead I budgeted the best I could, we cut way back and faced Mr. Murphy head on.

Sad news is nothing's been saved, no extra dinero for fun projects.  Boo Hoo.
I'm not really complaining.  I'm hoping for a little extra real soon.... :)  It's just around the corner.

Meanwhile I'll tackle some not so fun projects like organizing the pantry...  It has to be done so I'll do it and I'll show you pics later.

Back on Track

Well it seems as if my little lesson in lamps has helped to reignite my commitment to learning to live within or below my means.  I've been thinking about how far my husband and I have come in paying off our consumer debt (I'll tell you more later but it hasn't been easy- he's a teacher, I work part time and we have a commitment to keep our three girls in private school).  All this has got me thinking of how far we still have to go.  I thought I'd share a peek into some of our goals:

1.  Live within or below our means (As a lifestyle choice- not for short term savings)
2.  Do not use credit/debt (requires living within budget constraints)
3.  Build up an emergency fund (currently we have $0 in our emergency fund- at this point if an emergency should arise we'd have to use credit- not good.
4.  Save for our daughters College Fund.  To date we do not have anything saved for them.  Our oldest is 16! YIKES! There is not much time left!  This makes me sad and remorseful over not beginning this lifestyle sooner. (Although we've never been wasteful with our money we could have been a bit more conscious with our spending and more focused on saving for the future.)
5.  Build savings for the future: Retirement, Vacations, Replacement Vehicles, Household Maintenance and Repair.
These sound like hefty goals, especially since there isn't a lot of wiggle room in our budget.  But since I've learned some creative ways to cut back over the last year and a half that helped us pay down our consumer debt, I'm confident if we keep on track we can begin to save!  Yeah.
Now what am I to do with all the creative ideas I have swirling around in my head??  Creativity can be expensive especially if I think I need to satisfy it by buying something new (like lamps) but what if I see what I can do to make something beautiful for free??  That's what I'm planning on doing this weekend.  Stay tuned and I'll let you know what fabulous things God has planned.
Bye for now.
Elizabeth