Step 2 - Starting to Budget

Step 2

Setting up AND following a budget

Budgets? We ain't got no budgets. We don't need no stinking budgets! 

It is tough enough juggling (its akin to cat-juggling) and paying for a large family without the added stress of having a financial mess that rivals the current mess that is The Kardashian’s. When dealing the extra challenges of raising a large family (all worth it of course, wink wink), do you really want to be in financial distress? I didn’t think so.

No a budget isn’t a magic wand that makes everything alright. But it will help give you some financial peace of mind. And any task that can reduce stress is a thing worth doing (smoking weed being an exception).

I’ve seen budgets with anywhere from 3 (needs, savings, wants) up to 70 categories, yes 70. My current budget spreadsheet as 22 categories and next to each category is a column labeled “budgeted” and one label “actual”. There is a 3^rd column labeled remaining that tells be how much is left in each category or how much I have gone over. Plus the columns are totaled at the bottom for the big picture view. I also have a table to track my income. And then there are columns and rows were I list every purchase made it each month as they happen.

It may seem like a lot of work. But once you have the initial setup done it’s not hard to use at all. You do have to enter everything you spend money on but I enjoy doing it. And it gives you a great handle on your finances. And at the end of each month you know exactly how you did. You are either in the red, black or even-Steven.

If this seems overwhelming than maybe a simple 3-category budget might be better at first. You first list all your needs and how much they will cost you. Mortgage, food, utilities, charity, insurance etc…and no, going to Five Guys for a burger and fries is not a need (although it is pretty close). Neither, sadly, is shopping at Victoria Secrets a necessity. Second, you write down the amount you want to use for savings and paying down debt. Then whatever money is leftover goes in the “wants or blow” category. Just remember once you have spent everything in the “wants” category, you are done for the month. So plan well. This is an easy way to get started on budgeting until you feel that you are able to switchover to a more detailed budget. Some people do just fine on the simple budget but I find that I do better on the more detailed one.

Just because you have money left in a category doesn’t mean you can spend it. Let’s say it is the last day of the month and you have $10 left in your food category. Should you rush out and buy a box of Ritz crackers, a can of Cheese Whiz and a bottle of Mad Dog 20-20? Or should you add that $20 to your retirement account or apply it to a credit card balance? 

Here is a mocked-up sample of the spreadsheet I use.

Step 1 - Tracking Spending

Step 1 - Tracking Spending

Where does one start? For beginners or those in trouble or those whose finances just need an overhaul, you have to start somewhere. You can’t do everything at once. You’ll be overwhelmed and do a half-bottomed job at it. So if you are swimming in debt and can’t get a handle on your finances, don’t fret. Just do like Bill Murray in the movie What about Bob? And take baby steps.

Step 1 – Track your spending

Track your spending for a month or two before attempting to make a budget. This will tell you where all your money is going each month. I bet you don’t know, I sure didn’t. Do this even before you attempt to make a budget. Having a month or two of detailed spending will make budgeting a lot easier on you. If you are to ADD or impatient to do it for this long try and do it for at least 2 weeks.

You may also be able to do this in reverse and go through the last few months checking and credit card statements. If not, start recording everywhere that your money goes. From your double-whipped-caramel-skinny-latte at Fourbucks to your mortgage payment, track it all. Make some basic categories and first list all the fixed expenses that you know you have each month: mortgage/rent, utilities, phone etc… Then add in everything else you spend money on that month, write it all down or use something like excel or an online tool like Mint. I personally prefer using an excel spreadsheet for expense tracking and budgeting. Christian Personal Finance has a list of good ones (http://christianpf.com/10-free-household-budget-spreadsheets/). I use the one called “Personal Budgeting Spreadsheet”. It is in Excel format and you can customize it to fit your needs, and it’s free. 

You might think you know where your money is going, but I think this will be an eye-opening exercise for some.  You might find that you spent $150 last month on toys for your Mr. buttons, your cat or $300 on running shoes. I’ve done that before. Running shoes are a necessity, right?

After you have an idea of where the money is going, start thinking about ways to cut your spending so you can increase your savings rate and/or pay down debt.

Also think about just how frugal you want to be. Maybe you are doing alright and just want to cut the fat a bit so you can boost your retirement savings. Or maybe you are living paycheck to paycheck and drowning in debt.  There is no right answer to how much you have to slash from your spending. Some people, like my wife and me, are very frugal and refuse to go into debt for pretty much anything at all. We did finance our house but have since paid it off. We prefer a nice home cooked meal to swinging into the drive-thru at McDonald’s or Pizza Hut. Besides being very expense to get meals out for a large family, the food at most fast-food joints and chain restaurants is nutritional garbage. So let’s see $75-$150 for low-grade dog food at a place like Burger King or Applebee’s, or $20 bucks for a nice meal at home? Tough choice. And yes I can feed my family dinner for $20 and no that is not Ramen noodles and PB&J. We spend an average of $46 dollars per day on food, but that’s a subject of a future post.

 So as you read how we go about organizing our finances and what we spend our money on, just remember that this is how we have chosen to live. It’s certainly not the only way but it is the best way for us. We enjoy seeing how much we can save and we look forward to actually being able to retire and have some $$$ cause it’s not like we can count on Social Security.

Personally I’d much rather save my money than by junk-food and more crapola for the house.

How much can you save after slashing your budget to a more reasonable level? Well here is a teaser from a future article, we save 30% of my income each month. And no I don’t have a high paying job, just a regular old job. Above minimum wage obviously but not some high flying salary. And lower than most of my friends who have fewer kids and are struggling to make it financially. It’s about choices people. Sure we all have bad financial luck at times…car breaks downs, kid needs braces, hours get cut at work…stuff happens. That’s why you have to plan and be prepared. We live in a very high expense area so it can be tough at times to save a third of my income but it is worth it to us. My bride, who works much harder than I, sadly does not get paid monetarily.

After tracking your spending for a while you’ll be ready to make a budget and get your financial goals on track. Wait! You do have Financial Goals don’t you? If not, start thinking about them. This can be part of Step 1. Maybe you want to pay off your student loans or your credit cards. Maybe you want to expand your garden gnome collection or your vintage Barry Manilow 8-track tape collection. Maybe you are getting older and have neglected your retirement planning. Maybe you are retired and just need to fine-tune your finances so you don’t run out of money in your dotage and have to live off of Alpo.

If you find that your finances are completely hosed, you may want to try a "spending fast" for a certain period of time. Think Lent, but instead of meat-less Fridays, you don't spend any money on non-essentials. We are doing one for the month of July and are almost finished (another future post). I'll be the first to admit that it has been difficult. I thought it would be a breeze for us since we don't shop a lot. I was wrong. You can see my wife's blog for her thoughts on how it has been going. I sure do miss the UPS driver and the lovely Amazon packages he used to bring me regularly.

Back and better than ever.....well back at least

So I got bored a few years ago writing this blog, and I know people got bored reading it way before that. So I figured I’d write a bit about a subject I’ve spent a lot of time working on over the years…no, not making babies…keep your shorts on. I’m talking about Financial Planning for Large Families.

What is a large family? Well you could say in the U.S. that it is 2 or more kids since the birth rate in this country is 1.89. Me? I prefer to say that you have to have at least 10 kids to have a large family, why do I say this? Mainly to annoy my friends with 9 kids or less, that’s why. Lets just say that large families are like tight undies, you know them if you have them. And no these ideas don’t apply to just larger families, the basic principles work for just about anyone. Well maybe not politicians, but for real people they do.  But I want to focus on big families since in my research (googling stuff) there doesn’t seem to be a lot out there.

Financial Planning for Large Families…sounds like a bit of an oxymoron, eh. But it’s not only possible, its essential. Even more so than “normal” size families I would argue. We can’t afford to make mistakes in this area. I single person or DINK’s can probably absorb financial errors easier than we can. Not that they are any better with their money, just that they have more wiggle room for mistakes.

So if anyone out there is interested in this, let me know what topics you would like covered.

Here is a list of ideas I have for topics/categories:

·         Tracking spending – track spending for a month or two to see where it’s all going.

·         Budgeting-make one…simple or complicated…just do it

o   Resources – software/spreadsheets/online

·         Spending (food, clothing, household items, entertainment etc…)

·         Buying a home

·         Buying a car

·         Debt (paying it down, not incurring it)

·         Credit – best way to borrow if you must

·         Going all “cash”

·         Saving/investing  money

o   Short term/emergency fund – stop living paycheck to paycheck. Go on a spending fast

o   Medium term/saving for a car….college….

o   Long term/retirement/401k’s/IRS’s

·         Insurance –health, life, auto, home

·         Kids and money

·         Marriage, love and money….oh my

·         Working/careers

·         Taxes

·         List of resources – books, websites

Happy Father's Day

Tipping Thursday

Twilight Tuesday

Sure its an easy target to mock but it's still fun to do 

Demotivational Monday

Because the weekend is over and Mondays are just horrendous at times

Happy St Patrick's Day

to my Mick wife and half-mick kids.

"At an Irish wedding reception someone yelled, "Would all the married men, please stand next to the one person who has made your life worth living. 

The bartender was almost crushed to death"

Saturday Silliness

Today's Workout

Weather: cloudy and 60
Time of Day: 3:30pm
Distance: 8.17 miles
Time: 1:14:06
Pace: 9:05
Running Shoes: Mizuno Elixir 6's
SCD Running Shoe Ranking: 4
Comments: still suffering the effects of the stomach bug I had earlier in the week. Felt weak, dizzy and slug-like...more so than usual.

Woman addicted to drinking urine

Woman addicted to drinking urine

Thankfully there are no pictures in article below.


Some people like to drink soda, others water – but for 53-year-old Carrie, she prefers to drink her own urine.
Carrie, who will be featured on Sunday’s season finale of “Strange Addictions” at 10 p.m. on TLC, said she has been addicted to drinking urine for more than 4 years.
She drinks about 80 ounces of her urine each day – sometimes by glass, sometimes using a Neti pot to drink it nasally.
“When you are nasal drinking, the pain is different than any pain you’ve experienced,” Carrie said.
Dr. Keith Ablow, a psychiatrist and contributor to Fox News Channel, who has not treated Carrie, said she is ultimately suffering from a form of Pica disorder, an umbrella term for people who eat inorganic things, like dirt or wood.
“I think what this women is describing is really a form of obsessive compulsive disorder,  where she has a compulsion to do something that has nothing to do with nutrition and that she probably thinks about a good deal of the time in an obsessive way,” Ablow said.
Carrie said most people in her life don’t know about her addiction, but in Sunday’s episode, she will tell her friend Denise.
“I drink almost all the urine that comes out of my body,” Carrie said in the trailer.
“All of it?” Denise asked.
“It tastes like water for me,” Carrie responded, adding she will put the urine in her eyes, use it to brush her teeth and save it to rub aged urine on her skin.
Ablow said that Carrie is likely addicted to drinking to her urine because it allows her to not think about the stressful things in her life.
“(Pica) has been linked to lots of things, like parental neglect and disorganized families,” Ablow said.  “(Drinking urine) shows a real failure shows a real failure between what represents you as an individual and what represents waste products to be discarded – she probably has guilt over ridding herself of her bodily functions.”
Ablow said he had a patient who used to repeatedly inject herself with dirt and would present to the hospital with infections. Ablow discovered the woman felt ‘soiled’ because of previous sexual abuse. Antibiotics and therapy was helpful in treating her.