Monthly budget update

This is going to be a really long post, so I apologize in advance!  I know a few of you have started creating a budget or looking for more ways to save, so hopefully a few of you find this helpful.  Also, I love having a place like this to report our progress!  Thanks to all of you for being my "accountability partners" though this.  I want to report good news on our budget progress, so it has motivated me try to stay focused! 

With that, I will try to post like this monthly on our progress, and I invite everyone do to the same!  I'd love to hear how others are doing, what is working, what's not, and what ideas you have!

As some of you know, my family has started a fairly strict budget over
the last few months, and I like to report how we are doing on a monthly
basis.  We haven't made any huge cuts such as satelite dish, car
payments, cell phones, etc, but rather we are starting smaller and
trying to make changes with our everyday spending first.  My goal is to make
us more aware of what we buy, whether it was really necessary, and to
put a small chunk into savings every month.  Actually, my main goal is
to keep us out of debt completely, except for our house and 1 car
payment (which so far we are on track for the year!).

So, here's how we did in April - terrible! :(  We went through most of our budget within the first 2 weeks (mostly just grocery budget).  We still pulled through the month with no credit card debt, so that is good, we just didn't meet the other goals I was hoping this past month.  It's ok, because I learned some important lessons in April, and I know what we need to do to get on track!

Some things that I've learned this month:

I have to be realistic and realize we aren't going to be putting hundreds to savings every month because we do only have 1 income.  We are putting a LOT into my husband's 401K every month, and we do have a nice stash in our mutual funds.  I was hoping to start building on top of what we have in our liquid savings for a 6 month emergency fund, but without cutting everything out of life we enjoy, we can't quite yet.  So, we will start small, I will add to savings every month, just not as much as I planned.  It's still ok though because we do have the resources available IF something major happened and we needed money.  So, back to reality....a little to savings each month and keep us out of debt :)  Also, we do have a few opportunities for some extra cash coming up (garage sale, economic stimulus check, etc), so that money I'm 'hoping' to put away (after the rest of medical bills come through and are paid off).

Something else I've learned - I should have not involved my husband so much in my thoughts!  :)  This has really been tough on him.  I really don't understand why because we haven't really cut that much out.  It's simply about being more organized, more aware, and yes, cutting some of the excess.  In fact, last weekend we took the baby to grandma and grandpas for the entire afternoon, and we spent the day just us and Luke.  We went to Hacienda for lunch, we took him to Notre Dame to ride his bike, we bought his a tee shirt and a football at the bookstore, and got Slurpees at 7 Eleven on our way home.  And, I didn't even take the money out of our "entertainment" budget!  My thoughts are if we can stay within our other budgets for the month, put a little away in savings each month, we can do things like this once a month and it's fine.

Here's what I should have done.  I shouldn't have mentioned this budget thing at all to my husband.  I should have crunched the numbers, gotten my menu planning, grocery lists, bills in order without saying a word!  I should have made smaller changes and incorporated them without making a big deal about it.  I should have eased the family in as much as possible without them knowing :)  My husband and I have always been on the same page when it comes to money, so I am a bit surprised that he is taking this budget so hard.  It comes down to this - he feels that because we are saving so much in one area, we shouldn't have to cut back so much in another area.  My thoughts are if it is wasteful, it goes, regardless of what "budget" it's coming out of.  Slowly but surely, I am confident we will get through the initial "shock" of the budget.  Like I said, we have always had the same thoughts on money, so I'm sure it's just going to take him a little longer to fully jump on board with me.  We have never fought about money, and I don't intend on starting now!  I think he will realize my goal isn't to deprive the family, but rather get us in better shape so we can splurge more and still meet our financial goals.  Since this isn't something that can be accomplished overnight, it's a bit more difficult for him to envision the end result.  The cuts I'm asking him to make are temporary until we get in a groove and stick to our numbers for a few months.  We'll get there :)

Another area for improvement.  I started out the month with a really bad system for keeping our cash in envelopes, and I realized it won't work at all.  I bought a new organizer (a Buxton organizer on clearance at Staples for $10), and I bought 6-ring, 2 pocketed "folders" to go in it.  I labeled each one, and I think it will help keep the cash better organized.  So far, it's working GREAT! 

I also didn't quite have my menu planning in good order for April, so that didn't help matters at all.  It is still a work in progress, but I am on the right track to weekly menu planning, creating my grocery lists according to that, and only shopping once or twice for the week.  I have truly realized that I CANNOT shop with my family, I have to take a list with me and stick to it, and I can only go to the store once a week (maybe twice if I see good deals at another store).  In the past we have been bad about shopping almost daily, and we bought so much stuff we didn't need.  So, I'm on the right track, but this is VITAL to keeping within the budget!  I'll keep working on it. 

As far as grocery shopping, I have to find a happy medium between stocking up on things we will use and staying within the budget.  Those great deals I found at Kroger saved us some money, but we ended up going way over budget because I stocked up so much!  Here's my solution - I scrapped the "grocery budget."  Before it was $200 a month for groceries, period.  When you run out mid way through the month, buying milk and bread and other staples at the end of the month is a problem!  Luckily, we do have money leftover at the end of the month, so it isn't like we can't feed the family, but it's an eye-opener!  Here is how I broke down our grocery budget.  I sat down and figured out approximately how much we need to spend on items like milk, bread, eggs, yogurt, meat, fruits & veggies, and I made a budget for each one!  That way if I find a killer sale somewhere and I want to stock up, I can, but I know to leave alone the milk, bread, egg money.  I know it seems really petty and detailed, but for us, I know it won't work unless I do this!  We are going to try this for next month and see how it does!  I have a gazillion spreadsheets set up playing with numbers, etc to get us in shape, and it does help to have it all written out.  Also, things like milk and eggs I try to incorporate in my CVS runs, so if I'm not used the milk and egg money, then I have extra to use to stock up on something else.

For menu planning: last month I made a list of meals we seem to eat most often.  I categorized them into categories such as meals that are inexpensive to make, ones that cost alot but give us enough to freeze a meal for next month, meals that are medium priced but give us leftovers for another night, and so on.  Yes, I know, again, seems very anal, right?  It is, but it has to be to work for us!  So, I started out with a blank calendar.  Fridays seem to be pizza nights for us, so I made it official...every Friday on the menu is pizza, and my husband picks it up on his way home from work.  That comes out of the entertainment budget, so it doesn't dent my grocery budget at all.  Then, my son loves eggs, so we tend to do breakfast one night a week, so that is also official....Thursday nights are breakfast nights.  Tues and Thursdays my husband stays at work and I need to pack him a lunch.  So Mon and Wed I need to make a meal big enough to send leftovers with him the next day.  So that goes on the menu too (and I can refer to my list of meals we eat alot to decide exactly what to make based on sales and what we have on hand).  I thought I would make 2 nights a week easy on myself, and one of them will just be sandwiches or grilled cheese or something really quick (but preferably half way healthy).  The other easy night is to pull something out of the freezer that I've made the previous month (BBQ, veg soup, spaghetti sauce, etc).  So I just plan on cooking a huge meal once a week that gives me enough to freeze leftovers for one night next month.  You get the idea....I just tried to create my menu with our budget in mind.  Honestly, we have been eating better the last couple of weeks than I can remember in a long time!  It is a good feeling to have this almost in place, because it really helps me with grocery shopping, I plan my meals around the sales, it's all on paper so I know how much to buy to get us through the whole month (if I find a good sale), it helps me stick to cooking because I see the menu first thing in the morning and I know what's for dinner (no more saying at 5:30 pm that I don't feel like cooking, so order a pizza). 

So, we are almost ready to start May off fresh.  I'm really excited because I am finally getting myself in order to make this budget work for us.  I'm no expert, I'm simply reporting what is and isn't working for us.  You guys may have a completely different idea of how to incorporate this for your family.  I think the most important thing to realize when starting this is that it can take MONTHS to get a good system in order.  You can't expect to do this and master it all in the same month.  I don't think it would ever work for anyone if you had that expectation.  Unless you really have no money left at the end of the month, make sure to give yourself 6 months to see what works and what doesn't. For us, the bad month has taught us the most because we see where we go wrong, and we can try to fix it for next month.

So, for those of you who actually read this entire post, how did you do this month?  Any thoughts on our progress?  Thanks for letting me ramble on....like I said, I like having this all written out so I can refer to it later, and it's great accountability for trying to stay on track :)  Feel free to write a "book" like I just did and share your experiences with us!