For all my talk of budgeting and knowing where your money goes, I sat and reviewed our numbers last night and was shocked that our "bare bones" budget (the amount of money we need every month to keep food in bellies and lights on overhead--the essentials only) was frankly much higher than I thought it would be. That is, at first glance, I saw no way that we could reduce our monthly expenses. Considering I sat and did the initial budget in January, it's strange that I still didn't know exactly how much money we spend a month. A few things have changed, though, and I hadn't really done the math on how that affected us. As well, I had not factored in vehicle maintenance, house repairs/maintenance, kids activities, Christmas. Once I did, I found my budget to be grossly out of reach, especially if the worst does happen.
After my initial panic I was able to see the budget more clearly and have found a few ways to cut spending. What's more, I have decided that it works better for me to move specific amounts of money into accounts that are designated for 1) savings/Christmas/pending bills and 2) vehicle maintenance, home repair/maintenance, "slush fund", and kids activities. Once that money disappears from our joint account I will simply have to work with what's leftover. For me, the important thing is getting used to living within reach of our "bare bones" budget so that, if worse comes to worse, we can quickly and easily adapt to the new reality.
What I realize I must change:
- I am doing well with my $600/month budget for food. However, getting this even lower would be necessary if Husband were out of work for a significant length of time. I am going to try to have a surplus of money leftover in March. (Whatever is not spent on groceries will be moved into Savings fund)
- I intend to have one month's free groceries/year using air miles reward dollars at Safeway and my PC Plus card at Superstore. I need to be very strategic in using coupons and flyers and planning my stockpile of food. This is a change in philosophy from saving up all the points and using them on "special" groceries at Christmas time. At $600/month I'm spending $7200 a year on food. I used to spend more than that plus spend any extra free points on things like cream cheese, havarti, etc for fancy meals. By budgeting smartly I expect to still afford some Christmas treats and also have a month's free food. So hopefully I will spend around $6,600 on food and eat just as well. It's a challenge that I am oddly excited to begin :)
- Our power bill is only charged every 3 months. I make monthly payments to that account so that we are never caught with an outrageous bill we weren't expecting. But I need to sit and figure out an "average" monthly amount for power so that I know I am budgeting enough. Ditto with natural gas.
- Buy greater quantities of pet food when it is on sale.
What I am not changing...yet:
- Husband has a Sirius Satellite Radio. He basically listens to it all day and he is in vehicles/equipment almost non-stop on 11 and 12 hour workdays. It is a last resort to take this away from him, but at $20/month we are realizing that it is a luxury that could be cut if need be--particularly if he was no longer working as much. I have also discovered that I can reduce that cost by about $5/month and I plan to do so soon.
- I cut my cell phone plan by $21/month awhile back. This could be cut further and probably in the summer when our contract is up I will shop around a hopefully save even more.
- We were in a situation where we basically had to get a new truck for Husband for work. We knew it was a poor time to do so, but being broke down in the winter or even having an unreliable vehicle at work is stressful. We are now deciding if we will sell the old truck, or my car, or keep both and only insure the old truck when we need it...obviously in a pinch we could sell one. For now we are keeping both car and truck insured for driving but we need to make a decision soon.
My Goals for March:
- Write ourselves each a cheque and deposit them into each of our personal accounts (the plan is to do this every month--March will be my first). As I mentioned above, one account will be Savings (Christmas, land taxes, a few bills that are coming at us soon), the other will be vehicle and home maintenance/repair fund, kids activities fund, "slush fund".
- create a spreadsheet for each of these accounts keeping track of how much money belongs to each designated fund and recording any transactions.
- Into the kids' activities fund I will transfer their Christmas money from Grandparents in Newfoundland. We usually save the money for something big for them so this year it might be a camping trip. Likewise, birthday money from my mom is always spent on swimming lessons, and their other birthday and Christmas money goes into their own bank accounts. Once the kids activities fund gets to a certain amount I plan to make a lump transfer to each of their RESPs.
- Repay money from vacation fund that we have "borrowed". The cash from our bottle/can recycling, along with other bits of cash that we end up with, are stashed in an envelope waiting for a summer trip of some kind. Twice now I've taken money from it when I needed cash so need to put $40 back!
- Register the kids for swimming lessons at the pool.
- Continue to bake all of our bread, buns and sweets.
- Continue to put $5/week into the egg jar.
- Continue to explore ways to make money myself, without incurring childcare costs.
It is my absolute goal right now to begin saving one year's expenses in case Husband is out of work. I realize now that we should have had that saved all along. We are doing well and with all my extra cuts I hope that in March we can set aside a month's expenses while also doing the transfers I have spoken of. This is the new game plan for 2016--for every dollar earned I need to save 50 cents!