The State of Our Financial Union: Talk About It

Y’all, I am so glad that we got to chat about budgets!  Honestly, it’s something I thought that I had written more about on The Blog, but apparently I had not.  After my last post, I got a number of different texts and messages about it, and I’m glad that we’re all hacking away at our finances together.  It’s a process.

In the same way that we set our budget annually, each year, we sit down together to review our spending (and saving) over the past year and to discuss what the upcoming year will look like.  This happened over New Year’s Day weekend for us.

To track our spending/savings, Marcus uses a combination of an Excel spreadsheet, Mint.com and good old pencil and paper.  Once he ran all of our numbers, and we had a better understanding of what our financial picture in 2016 would be, it was time to discuss.

The good news is that last year, we saved $$$.  As you know, this is always a part of our plan.

One thing my parents said repeatedly when I was growing up besides pay yourself first and all of that was that we should “delay” our raises.  Which is to say that when we got a raise, instead of changing our standard of living to match it, we should just keep living the same way.  I would have to say that over the last five years, we have pretty much done just that.  There are some areas where we have given ourselves small raises over the years (groceries, allowance, miscellaneous budget all come to mind) but we have really worked to continue to keep our lifestyle the same.  We simply do not need more.  This allows us to save 10% of our income in our 401(k)s and an additional 10% of our income as cash/investments.  This also allows us the luxury of being able to separately budget for things like travel, without touching our savings.  MOM AND DAD YOU WERE RIGHT, OKAY?  If you’re not currently “delaying” raises and you have the cash flow to do it, I cannot even tell you how much I would recommend this technique.

My biggest personal victory of 2015 is that we were $360 under on our grocery budget.  At first I thought that maybe we had just way over-budgeted for groceries, but when I broke down the number as a weekly amount, it factored out to about $7 of savings per week.  I think we can all agree that it would not be very hard to blow an extra $7 per week in groceries.  This means that meal planning along with all of those mass-purchases of skin-on, bone-in chicken thighs at $0.99/lb and LaCroix when it’s on sale have been paying off!  We have also been blessed in that a new ALDI opened 3.5 miles from our house, where before, the closest store was 9 miles away.  That means that if we need some mid-week groceries, we can now make an ALDI run versus going to Cub, which will probably save us additional cash.

Our biggest continual struggle is keeping our “miscellaneous” budget under control.  If I had to put a wager on what it is that brought us over for this year, it was a combination of wedding gifts and maternity clothing purchases.  There’s really nothing to be done about it now, but we have to keep an eye on what we’re spending there in the next year.  This also has me thinking that I could probably apply the chicken thigh/LaCroix rule to this area as well with toilet paper, paper towels, and our toiletries.  If you asked me, I could tell you what kind of toiletries I use, but nothing about Marcus’ and absolutely nothing about our paper products.  Here, then, is a financial resolution for 2016: Figure out the brands we use for all toiletries and paper products, and start purchasing these things when they are on sale.  Any amount of money this allows us to save in 2016 would be a victory.

We also talked about expenses and our mortgage.  A few years ago, we made the decision to start making extra payments on our mortgage on a monthly basis.  From time to time throughout the year, we also make an additional full payment.  Slowly, but surely, we are chipping away at that principal!  As I am sure you are coming to understand, this is just one of the many cool things we spend our money on instead of treating me to that Chanel purse I have been coveting for ages.  Someday I will have that bag, but until then, a girl can dream.

While we were in the midst of this discussion, I also had the ah ha! revelation that of our friends who are homeowners (which is most of all them at this point), we have the smallest house by far.  I suppose if it has taken me six years to realize this, then it is clearly not an area in which I feel any sort of desire to keep up with the Joneses.  Will we live in our townhouse forever?  No.  But for the next few years?  Absolutely yes.  Honestly, now that the second bedroom has been converted from Marcus’ closet/seldom-used guest room to Marcus’ closet/nursery, we will get the most use out of that space that we ever have.  That’s actually sort of energizing to me.

Once again, this is a post where I asked for Marcus’ input, because it takes two of us to deal with our finances.  This week, he would like you all to know that while we do a BIG review of the past year and upcoming year on an annual basis, we also work to have a dialogue about our spending fairly regularly.  He feels that at a minimum, you should be analyzing and assessing current spending and budget status on a monthly basis if you aren’t talking about your money regularly.  He also noted that as far as his budget monitoring goes, if we are on-budget, he doesn’t mention anything to me, but if we are going over-budget, he does so that we can work together to correct it.  Do what works for you.

What are your savings strategies? 

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