New Year! New Budget! #MyLoveLanguage

Getting ready for January in our house means going over the past years’ budgets vs. expenses and seeing where we nailed it and where we blew it. It’s my absolute favorite time of the year.

Turns out we nailed it pretty well! Came in almost 100% on budget, which means we have successfully disciplined ourselves into Financial Awesomeness.

In fact I was just complaining to my mother in law that I had to hurry up and buy husband’s Christmas gift if I wanted to use the debit card, because I have until noon on payday to use the card before he literally pays all of the bills, cashes out our spending money, and sends the remainder over to our Financial Advisor to put into Locked Up Savings.  From there, if we want money, we have to explain ourselves to our dear friend and advisor who totally spends more time walking us through our naivety than we pay him for. (Or we can hack into another savings account that is not Locked Up, but we agreed not to — we spit shook and everything.)

It’s great in all the months that aren’t December. But this year, I wanted to go off budget (gasp) and buy him tix to see Dave Ramsey live, which for us will include a hotel and some restaurant splurges and some lattes. HAHAHAHA. Yes really, Dave Ramsey tix were my splurge. It’s the only time I’ve ever gone off budget. And because we are on Baby Step 6 I figured it was okay.

Anyway, it’s self policing discipline. It’s ruthless. But it is that discipline that took us from a 5-figure negative net-worth to a six-figure positive net worth in just five years.

This is how we live on a little and have lots left for giving and saving:

In addition to doing a real, hardcore budget every single month of our lives, this year we also did a January BallPark Budget. The rationale was that, then we could look at big numbers and make more informed choices. $200 a week for groceries, which is what I wanted, comes out to $10,400 a year! Insane! Inappropriate! Uncalled for!

So here’s what we did.

First, we figured out our anticipated net income for the year. We based it on the last several years.

Then we figured out a ballpark Necessary Outgo. 25% for giving and investing, ala Dave Ramsey (#BigChief #TheBest).  Then add up our absolute minimum yearly expenses: We just copied the budget from the year we lived on beans and rice and made our own soap and didn’t buy coffee and used all our excess to pay off $100k in debt.

THEN, we subtracted all of that from our anticipated BallPark Post-Tax Salary.

That left us with a hefty chunk of change with which to enjoy our lives and family, change the world, update our home, and pay off our last debt, which we lovingly named Mort.

We named a big chunk “Extra Mortgage Payments,”and we were left with the excess to do whatever we wanted. We started reaming  and came up with awesome ways to spend the leftovers. Now that we are debt free, I did add in fun stuff like PREMADE Dishwasher soap!  And… COFFEE. Yes coffee was first thing to make it back into the budget.

This year, we’re going to do lots more hiking and backpacking, (SEE we’ve learned to have loads of fun for FREE). Like, twice a month. Plus seven trips to my Old Man’s (free sans gas and whatever we buy for him while we are there; but we do all grocery store food and no dumb souvenirs), and some babysitting costs for #$2datenight (we pay our sitters well because they’re worth it…without them, we don’t go on dates.) Maybe a car trip to the Grand Canyon, or some other National Park (backpacking and grocery shopping, not resorting). I found some places where we can buy mosquito nets or chickens or lean-tos or sewing machines and have them delivered to people in non-developed countries, along with education on how to use the items, so families across the globe can maybe make enough to support their families, maybe avoid horrendous diseases, and maybe make it another day. So, definitely some money going there. Finally, this year it will also include a slew of functional home updates to make this place more energy efficient long term, as well as tricking out our garden.

I’m telling you this to encourage you to make a BIG PICTURE BUDGET. Because looking at $1200 per year is more fun than looking at $25 a week. If you can teach yourself to view that daily latte as a choice between … a latte and a VACATION, then you can more easily say no to the latte. ($3 times 365 days equals $1095 bucks. Enough for a fun roadtrip or weekend getaway, at least. Especially if you do it on grocery store food and car camping). If your spouse is indulging in a daily latte, or a daily tin of chew, or a daily lunch out, that could be another $1000 or more. That’s $2000, a fun vacay right there. Or maybe you prefer the daily latte. Whatevs. Just sayin.

All this money doesn’t come all at once (dang it.) So that means we won’t actually see all of the money until the end of the year. But we were able to assume that, some stuff (home energy improvements) we wanted to do at the beginning of the year, so we’ll fill up that cookie jar first. Then start working on the Grand Canyon cookie jar. Etc.  So… then we have to go BACK THROUGH the budget and reallocate the money monthly. We know that a couple times a year, we get weird checks (like a tax return) so we decide what that money will be used for. Etc. Extra mortgage payments most likely will happen monthly, and most of the giving. But those vacations and day trips might come from something like the tax return or another random check.

A little cumbersome but at least I am more willing to say NO to Pad Thai when I know I’m saying YES to the Grand Canyon.

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