Depending on who you ask, the words “financial freedom” could evoke a number of different images and meanings.  But, if you were to ask ME, it would look like:

-Debt free living
-Passive income
-Ability to comfortably live below my means

And, I think for most of us, those would be some of the recurring themes in most of our ideas of what “financial freedom” is.  Over the past 5 years, I’ve learned a lot about money and frugality and thought it would be fun to start a series where we could come together to share ideas and learn new ones.  Please feel free to email me or comment here with your ideas

One of the first things my husband and I learned to do was making a budget.  Of course, we had a very “loose” interpretation of the word “budget,” when we first began.  Our first “budget makeover” came after reading Dave Ramsey’s Total Money Makeover, but has since evolved a number of times.  In fact, even my thoughts about how to even create a budget have evolved with time.  It’s a learning experience, and there’s no ONE right way to do it.  You do what works for you.

I’m going to share with you how we arrived at the budget that works for us and give you a sample of what that looks like.

When my husband had one of his first job changeovers, we had decided that SOMETHING had to change in our finances.  There was too much money OUTGOING and not enough INCOMING.  Change is hard.  And, I don’t meet many people who restrict themselves to budgets (in the beginning, at least) because they have TOO much money…it’s usually people who are trying to make ends meet, and then it just goes from there.  It was the same for us.

When we first began, we took our incoming amount (paycheck) and did all of the percentages they recommend to you – like (this percentage) of your total paycheck should be for a house, then a certain percentage for cars, entertainment, and so on…  And, when we were done, we had the perfect budget… for someone else.

Now, we have a different method for rewriting our budget (it gets rewritten as our needs change and arise).

First, write out all debts and all incoming money.  (You can use some of the worksheets from daveramsey.com or you can make your own.)

Second, take some time to write out all outgoing money in a given week.  It may take a week, or it may take journaling every time money is spent for 30 days.  Track all purchases, even the random gum purchase.

Third, write down the PRIORITIES for YOUR given situation.  Choose two.

When we took the time to write down all of our incoming and outgoing money, we knew that according to the “books” we shouldn’t be splurging on a lot of the things we’d become accustomed to.  But for US, the two priorities were being able to tithe and keeping the internet.  So, we looked in other areas for the “parring down,” and did our best to leave the internet as it was – although, sometimes desperate times call for desperate measures, so if you find yourself needing extra money, you may have to give it up for a while (or find a creative solution) BUT it’s on the “last to go” list.

Fourth, take a hard look at all outgoing expenses (including debts) and really think about how the money gets spent, or if there are any things that could be parred down or done without.

After looking at our own expenses, we quickly realized that Satellite and Netflix weren’t something we needed.  Actually, freeing ourselves from that small financial expense opened us up to blessings we wouldn’t have otherwise discovered – we began being more active and spending more time with our family and using our time in more creative and rewarding ways.  Now, we wouldn’t go back!  We also decided to cut back on gas, having the numbers in front of our faces really made us aware that we were spending a crazy amount.  So, we began organizing things in our lives so that we could run important errands and grocery shop on certain days.  There were some expenses that we couldn’t tweak, but there were so many that we could: grocery budgets, miscellaneous items, toiletries, clothing, etc.  So, we discussed and agreed on terms and went from there…

Fifth, come up with a goal.  I have a secret to tell you:  If you don’t have a goal that you’re trying to attain with your budget, you probably won’t stick to it.  Maybe you’re trying to save money – for a house, college, retirement, new car, furniture, etc.  Or, maybe you just want to live more comfortably or go on more vacations.  Talk about your goals, and if it helps, put a photo of it on your refrigerator to help you remember!

Sixth, make it flexible.  Have you ever tried making a budget but then your friend has a birthday, so before you know it, you go out and have a couple of drinks (come on, you’re celebrating) and before you know it, you just spent $50 on food and drinks – which was half of your food budget for 2 weeks…all in one night!  Or, maybe you write out your budget and then your kid comes home and NEEDS something for school.  Or, maybe your kids suddenly go through a growth spurt and just won’t. stop. eating!  Yeh, you have to be flexible.  You can put “cushions” in your budget, you can round-up to the next dollar when you’re keeping track of what you spend (so what your paper shows you have left is less than what you ACTUALLY have), you can keep “special money” in a jar to the side, etc.

I’m a list person, so what works for us in keeping our budget flexible is I keep a small notebook in my purse (or a used envelope ) and on it, I write out:  $200 groceries, $150 misc., $100 gas.  Then, throughout the month, as we spend money (after bills), it has to go in one of those columns.  I subtract and keep a running total (allowing myself to see the purchases as I go).  Occasionally we need more gas, or there’s a celebration and we need more food money, so we take it from other columns.  Generally, this works for us.  We’ve become self-disciplined enough to know that if we take $10 out of gas, then I’ll need to not drive much that week – or, I may forego a specialty body wash/shampoo/etc. that I generally like to get.  We just get creative!

Seventh, make it yours and put it in action.  Feel free to revise it as you figure out what’s important to you.  Remember, this budget is about YOU, and my needs/wants vs. your needs/wants could look completely different.  So, make it about you and then use it.

So, tell me:  Do you use a budget?  Have any other tips?  Why do you keep a budget – what are you hoping will come from it?

Welcome back!

I will be 23 this month (August 29th), and while I can say I’m doing pretty good on my life track (especially compared to others my age), but I’m not doing good enough.  To my own standards.  It has less to do with money than it does with my own determination and persistence.

I’m changing that.  WE are changing that.

Our income may or may not change any time soon – and there isn’t a lot we can do about that.  Whining about it and planning the “WHEN/IF’s” is absolutely not getting us anywhere (except maybe pushing ourselves backwards).  So, we’re fixing it.  Here.  Now.

If you’ve been reading me for a while, you know that a while back we had some pretty big financial difficulties, but we came through that (thanks to some really awesome family and friends, by the way).  And, through it all we learned a lot of lessons:

I now know that I can plan a meal where each serving only costs $1-1.50 each.
I now know that with a bit of simple tweaking, Freecycle stuff can be really awesome.
I now know that you don’t have to pay for fun.  There are games, playing outside (geocaching, swimming, exploring, hiking, etc), crafting, borrowing movies, etc.
I now know that I will NOT die without cable or satellite TV.  In fact, we are CHOOSING (because everything is a choice) to leave it off and better allocate that money.
I now know that despite the happy smiles that people put on, almost EVERYONE in this country has some sort of money issues – all self inflicted in one way or another.
I now know that if you call companies BEFORE your bill is due, most of them are nice and will help you out.
I now know that Angel Food Ministries is wonderful, although the food isn’t as healthy as I like.  But, when you need it, you need it.  By the way, if you’ve never heard of this awesome program, you can get huge boxes of food for only $25!
I now know the power in planning meals – I managed to get us by on $50 of food for TWO WEEKS.  God is awesome.
I now know that money can really do damage on marriages and it takes a lot of work and the knowledge of this to keep it from hurting it.
I now know how awesome bartering is – and how wonderful it is to give away things you don’t need so that others may have.  I’ve now been on both sides of this.

I’m very thankful for the lessons I’ve learned.  I’ve learned how to be thrifty, and I know I can survive no matter what.  I have learned to garden, and will soon learn to can.  I have learned how to make my own things if I want them enough.  I have learned to put my faith in something much bigger than me…even when things seem like you won’t get through it.  Because you will.

And, we have come so very far.  But, there is more that I want to do in our lives.  I want to change our spending habits so that we can eat HEALTHY good food under $200/month.  Preferably under $150, but I’m giving myself some leadway until I learn this.  And, I don’t mean eating processed crap.  I mean healthy stuff.  Even…organic *gasp*.

I want to start saving money.  And, guess what.  Not only have we saved some money, but we are going to make it a monthly thing.

I want to get health insurance.  I have been determined…and guess what!  This month we are sending off the first check.  It took Steven trading in his vehicle for a motor scooter and the gas savings alone will pay for it!  We are thrilled.

I want to be able to do minor fix ups on our home.

I want to pay off our debts that we’ve accumulated.

So, now I’m exploring new ways of saving money.  We’ve REDONE our budget (AGAIN) and have it all listed out.  We have 2 lists – one with all of the things that MUST be paid (mortgage, bills, insurances, etc) and then the list with these 3 things: Food ($200), Necessities – razors, face wash, diapers, TP, paper towels, etc ($40), and gas ($160) for each month.  We have the money allocated for those 3 things cashed and we will put them in jars.  We will do our best to NOT spend all of this money.  We will also make a list of 3 goals for things we want to purchase once our savings have been built up.  3 Goals – from paying off a specific credit card to building a deck to buying a new whatever…And we will make a Jar for the top item on that list as well as a Entertainment jar.  Then, when we have EXTRA money in food, necessities, gas at the end of the month, we’ll divvy that cash out into the other jars (entertainment or goal).

Once a goal is reached, we’ll mark it off the list.  Only keeping 3 on at a time.  Make sense?

Not only will our goals be specific and on paper, we will have cash money in our hands – making us less willing to give it away.  And, of course, I am forever searching for healthy and VERY inexpensive meals and other ways to lighten the grips money has on us.

By the way…I’m needing to change to a cheaper toilet paper and paper towels.  We currently use Charmin and Bounty…what do you use and love (but is cheaper?)  Stop laughing at me, this is really important!  Tell me!