Friday, December 7, 2007

Living on a Budget



It's official. I'm now on a budget. Husband and I decided we want to start saving more money. Where does it all go? It doesn't seem like we spend that much, but how come we're not seeing it in our savings. We have lots of plans, vacations, college funds, retirement, cottage on the lake. We decided to take a closer look at how we're actually spending our money.

We like our credit card. I put all my groceries, gas, and other expenditures on it and the card gives a percentage back based on how much we spent. I recently received a check for $78! That really was free money. I wouldn't have gotten that check if I had used cash. The problem is, it's too easy to use the card. We took a closer look at what was put on the card. Our biggest expense - groceries! I almost had a heart attack when I added up what we spend in one month. I DO have 4 kids, but I still think I'm spending too much. That's when I talked to my friend Dee.

Dee told me she's been on a budget ever since she and her husband got married. They sat down and decided how much they can spend each month, and how much will go into their savings and emergency fund. They call their emergency fund anything that comes up each month that they weren't planning on , such as fixing their car all the way down to a birthday present! For Christmas, she has a Christmas club that she contributes to all year. She only spends the money allotted for it. I asked her how she handles the grocery bill. She told me she has an amount she can spend at the store and uses a calculator to add everything up as she puts it in her cart. She puts some extra items that she wants, but doesn't actually need in the corner of her cart. If she gets to the end of her shopping and sees she's over her limit, she has to put back some of the items in her "extra" corner until she's back within her budget. Dee said it's fun. It's kind of like a game.

Really? Hey, I like games! I could do that! My husband and I decided on a grocery budget. This week I even decided to spend $50 less than that, to make up for some of the Christmas presents I was buying. I took a calculator to the grocery store. I entered the price of EVERYTHING, right down to the price of my eggplant. I must admit, I felt a little embarrassed at first. What would people think of me and my calculator? I tried hiding it at first. Then I realized what Dee was talking about. It really was like a game! I found myself watching every single penny I spent! I wanted 4 bananas, so I looked for the smallest ones I could find. This was the first time I bought generic ketchup. It was so much cheaper! I never even looked at the price of sprinkles for my cookies before, $2.99? Forget it, I'll think of something else. Would you believe I came in $6 below what I wanted to spend? By watching EVERYTHING, I had enough money to buy supplies for Christmas cookies and some fish that I really wanted. It really wasn't that hard. I had fun doing it, too. Also, by the time I got to the end of the store, I didn't care who saw my calculator. My husband is very happy about this, too. A calculator, such a simple thing.

Everyone I know tells me they spend so much on groceries, too. Who says, "Honestly, I don't spend very much on food?" Try this the next time you go to the store. It's amazing. I can't believe I haven't tried this before. I'm going to call Dee now to thank her. THANK YOU!

Please tell me any budget tips you have!

13 comments:

Tammy said...

I too have a budget as we are trying to get out of debt completely. We aren't getting very far very fast but we are working on it. With groceries, I make a menu for the week and then make my shopping list accordingly. I spend soooo much less money at the grocery store that way and then I only buy what I need. If I don't have my menu and my list, I buy things I don't need; forget things I do need; and go way over budget. I have to stick to my menu and list for it to work.

Mary said...

I reallllllly need to budget better! I think some times it boils down to me being lazy. I really should try to do better.

Tina said...

Tammy's right. Make a menu, stick with it and it will help your spending at the store.

Another trick is to pay cash for your groceries. I know it sounds archaic, but hear me out. You'll spend less is you pay cash. Why? You'll associate more with the cash and have a harder time giving it up at the store. If you just have to swipe a card, it doesn't hold the same connection for you.

Good luck and just holler if you need help! We've been budgeting for 1.5 years and doing great.

Kila said...

Good for you! Good luck with the budget! I've been trying to talk my DH into this for many years!

Do you listen to Dave Ramsey on AM Radio, or read his books? He'll really kickstart the whole budget thing for you!

Irene said...

I should bring the calculator too! I went shopping this week, didn't think I would be spending that much, and my total was $150! Granted, it included a birthday gift, but STILL! I am doing something very wrong!

Bia said...

When my husband and I made the decision to be better stewards of our money, I was shocked to realize how much I spend for groceries . . . and I'm even careful to use coupons and buy things on sale. Anyway, it was a wake-up call and now I am much more aware of what I'm spending. I do like your ideas, and I will try the calculator idea next time I shop. P.S. I have noticed that I spend more on groceries if I have any of my boys with me. So I try to shop when my husband can babysit! God bless.

suchsimplepleasures said...

we spend all of our money on groceries...we have 5 kids. it's so hard to budget. i wish i had advice but, i need some, myself. once the mortgage is paid...there doesn't seem to be much left!

Becky said...

I love the idea of the grocery shopping 'game'. I've gotten slack about watching what I spend, and I feel it when I get to the checker, too. I used to avoid the center aisles, buying only produce, meat and dairy...and saved a lot of money, but when I venture into the packaged items...it gets spendy.

Ever read the "Tightwad Gazette" books by Amy Dacyczyn? I think all 3 books are now in one volume at Barnes & Noble. She is my hero. She is the queen of squeezing every dime out of a budget.

suburbancorrespondent said...

Good for you! It really is a game. And the key is to put the money into retirement, etc, first each month, rather than waiting to see what you have left over.

By the way, with the exception maybe of gas, the percentage back on the credit card doesn't save you money. Because it is a statistical fact that consumers spend 20 percent more when they use credit than when they use cash. That is why stores can afford to pay the charge fee for each transaction to the credit card companies - the store owners know that you are buying more when you use the credit card. We use the credit card for gas and for online purchases (not many). Cash everywhere else. It really does slow down your spending when you have only 30 bucks in your wallet and it has to last until the next payday.

becky - Amy D is my hero, too!

Maria said...

I think I'll check out those Tightwad books!

Amy said...

hey Maria,...here's some coupon sites to help with that too
http://www.thegrocerygame.com
http://www.thecouponclippers.com
http://www.refundingmakessense.com
let me know if you have any questions...

gengen said...

I am a big fan of budgeting--if you want some good ideas for being thrifty or saving money, go to www.miserlymoms.com

Thanks for being a good example!

Burgh Baby's Mom said...

You've been missing out on the generic ketchup. If the bottle is shaped remarkably similar to a Heinz bottle, that's because it IS a Heinz bottle. Totally serious. Bunches of grocery store brands are Heinz with "Private Label" branding stuck on them.