Several years ago my husband and I were in the height of financial distress.
We had been married for eight years, had no children and we both worked. So we felt that we had enough money to cover not only the things that we needed, but also the things that we wanted without worrying about a negative financial impact.
This thinking, however, had slowly begun to dig us deeper and deeper into debt, so deep that we were not able to make dents in our existing debt as we continually added to it.
What jolted us into action was the unexpected news of a baby and that in less than nine months we would be down to one income. We began to make small changes (like no more Starbucks everyday) and started to think about how we could possibly make it work. As we approached the baby’s due date we realized the only way to make it work was to sell our house. This was a long process and while we waited we took the class, Financial Peace University from Dave Ramsey.
What an eye opener this class was!
Our thinking on money began to change almost immediately and we quickly jumped on board by making a budget and actually sticking to it. Our house sold during the classes and we were able to pay off all our debts, put four months expenses into an emergency fund and put a large chunk into a future home account. With this success under our belt, we were even more gung-ho about budgeting every month.
For at least nine months thing went pretty well. But then we stopped making it a priority to redo our budget every month and little by little we began to fall into our old ways again. Then came baby #2 and with him $3000 in medical bills. At the same time my husband had an emergency trip to the hospital and that cost us $2000. We also started having trouble with our car and had to put a few hundred into it only to find out we would need our transmission rebuilt for another $3000.
We like to do things big. Even emergencies.
Without a plan every month and added expenses coming out of our savings like crazy, we were beginning to burn through our emergency fund quickly. Finally we got it together and began the painful process of creating another budget and sticking to it.
It quickly became evident that we would need to sacrifice a LOT of our luxuries if we were going to stop using our savings every month and truly live only by what our income allowed. Out went cable, eating out, clothes shopping, and entertainment.
Instead we started packing lunches, cooking from scratch, finding free entertainment, and simply going outside for fun. I also had been getting better at shopping strategically and was able to reduce our household expenses significantly. Probably the biggest money saver was meal planning and only buying the things we would need for each meal. Nothing more.
Following our budget was painful.
At this point in our lives we just didn’t have any disposable income. I had to completely stay out of the stores so I wouldn’t be tempted. The only shopping I did for three months straight was to the grocery store with my list in hand. Some weeks we ran out of peanut butter and I just couldn’t fit it into that week’s list, so we had to wait until the next week.
After over three months of sticking to our budget completely, we were finally seeing how it can make life LESS stressful. During this time, we had an extra paycheck come in that would normally have just been eaten up in our daily expenses. Not this time!
I was able to carefully plan out every dollar, so that we wouldn’t spend any more than we had. Every dollar had a specific place and wasn’t wasted away on trivial things.
So is budgeting really worth it? Completely, but it is painful at first. I won’t sugarcoat it.
A few things that I have learned along the way:
So much of what we spent our money on was not needed.
Sure, it’s fun and luxuries are not off limits as long as the money is there. But I never NEEDED to buy clothes just because they’re cute and we can always pack a lunch with what we have in the house. So often, spending on those types of things is just not where our money is best used.
I have taught myself to be much more content with what I have.
When I just couldn’t afford to buy new things, I had to make do with what we already had in our house. It taught me to be more creative and more content and to be realize when something was a WANT instead of a NEED.
I actually enjoy cooking at home and baking from scratch.
While not everyone will love this part, there is a certain relief and joy that comes from the money saved by not eating out. It also makes eating out feel that much more fun and special.
A little money here and a little money there can waste a lot of money in the long run.
I was convincing myself that I DESERVED that latte at Starbucks. Totally justifying the expense. Again, these types of little luxuries are FINE if the money is there. Enjoy them, go crazy. But spending because you feel like you deserve it, especially when you can’t afford it, is a slippery slope.
Even our smaller income is more than enough.
It does feel like we’ve had to sacrifice, but those sacrifices were mostly luxury items and things we can live without. This whole process has just been a great reminder that we have enough and that our material possessions do not define who we are.
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