How Our Budget Changed Since Having Kids

wpid-20150530_150552.jpgIt goes without saying that having a child will change your budget, maybe drastically, maybe not. Though there is some way to predict how things will change, until it happens and you know exactly what you’re dealing with, you don’t really know. Some changes in our budget genuinely surprised me, others not so much. Though every family will have a varying experience, here is mine.

Food Spending: Decrease

How did we go from a family of two to a family of three and spend less? We started planning a heck of a lot better. Before kiddo was born we weren’t the best when it came to grocery shopping and proper planning but being forced into it while on mat leave changed that. It’s a habit we still stick with pretty well and so glad. I realize a time will come when this will increase but for now, toddler sized portions are our old leftovers that would usually end up going bad in the fridge. With eating out, a lot of the time she and I will share a meal which works out well too.

Entertainment: Big Decrease

We have a 3.5 year old. That is now our entertainment, and time. Though the category overall is decreased there are a few increases within in it like cable and Netflix. Both of which I consider an entertainment category we have increased since having a kid. Where we used to spend more time out (think watching a big game at a local pub for a few hours), we now stay home at watch at home, usually while she’s asleep but have ordered a sports add-on package to ensure we get the games we want- still cheaper than a single night out involving food, transportation and pitchers of beer!

Extra Curricular Activities: Increase

We have an extra person in the house who is developing her own interests which cost money. My hobbies are pretty cheap to free (/I have a three year old so little to no time to do much of anything) and Mike plays soccer year-round. He’s always done this so no real change there. Maria played soccer this summer and will dance this winter/spring. A brand new cost in our budget which I’m happy to pay. My lack of hobbies more than make up for it.

Travel: (soon-to-be) Increase

No real change for the first, what will be four years, of her life. We managed with one car and it was fine(ish). Happy we were able to survive so long with one car cost but as I have said in the past this is coming to an end. Summer of 2016 we will, if all goes according to plan, buy a second car. This means: cost of new-to-us car, insurance, gas, registration fees and second car seat. My sister-in-law was gallivanting around Europe for two weeks this month and lent us her car. Having two cars was glorious. It was literally life changing and so much less stress in our day-to-day life. This is an increase I will happily take on.

Miscellaneous ”Stuff”: Increase

This is something we’ve honestly never tracked- the packs of gum, coffee, change for meters. Small stuff that adds up. This has indefinitely increased. We go to the local Dollar Store and she’ll usually end up with a small ”treat”. Though I have no way of tracking this I know we’d be spending less overall without her.

Baby Stuff: Increase

Needless to say, before she was born we didn’t buy any baby stuff. I received enough diapers at my shower to last a full 10 months (I think I bought one newborn pack) and we spent another 14 months worth of diapers (fully potty trained at 2, didn’t bother with stuff like pull-ups). Diapers were our biggest ”baby” expense. We received a lot in gifts (so grateful) and being frugal I was able to find great savings in things like clothes. I think we did well with sticking to necessities.

Holiday Spending: Increase

Though our Christmas budget didn’t change much (until this year), we spent money on other holidays that we hadn’t really before, like Easter. While we spent basically nothing on the holiday before, now we play the role of the Easter Bunny, which is fun. Same for basically every ”holiday” out there, though it might not be much we spend something.

Kids are an expense but they don’t have to be as expensive as some ”professionals” will have you believe. Like anything, there is often savings to be found with a little effort. You’ll also be surprised how few things you need. Having a kid also really aligned my priorities in all aspects, including money and some things that used to be important no longer are.

How did kids change your budget?

How Do You Decide on a Christmas Budget?

wpid-20141201_222038.jpgI’ve mentioned before that we essentially don’t have a budget but rather monitor our money. The only case this is not true would be Christmas. We make a detailed budget and stick to it. It usually starts with me figuring out a total dollar amount and then dividing it up how we see fit. Like any budget we start with the ”fixed” or non-negotiables like buying a tree from a local farmer and fit in everything else, like hosting a Christmas party.

Our Christmas budget hasn’t changed that much since we’ve been married or, initially with having a kid either. She’s the only ”baby” in the family and well taken care of, especially during the holidays. Being so young she also wasn’t very ”into” Christmas, but this is changing. There’s no more pretending Santa doesn’t yet exist, ignoring when she voices that she wants something, and the fact that we want to do more during the season, as a family. What I’m saying is that this is the first year our Christmas budget has been increased in a while  (though still very modest in my mind) and I’m not entirely sure how to balance it out.

I Love Tradition

As my sister and I got older, experiences soon replaced gifts. Instead of many gifts, we’d do very few, and my mom would take us to the local theater on Christmas eve to watch the Christmas play then we’d go home for a nice family dinner. I loved it and am very much looking forward to creating similar traditions with my family.

Maria loves dance. There isn’t a doubt in my mind she wouldn’t love seeing a local professional production on The Nutcracker, one of my favorite plays too. It is this kind of thing that I want to start budgeting in every year. While almost all of my Christmas traditions cost little to no money, this is one I would like to add in as a regular and will thus need to find the money in our budget.


I know everyone has a different feeling about this topic. I personally love Santa. I love how excited kids get when talking about him and have a ton of fun with it as a parent. Last year we gave her a gift from Santa and it was very much a ”oh that’s nice???” semi confused reaction. She didn’t quite get it. Now she definitely does. She wants to write a letter. She knows to will ask for something and potentially get it. For a few reasons, I like the idea of one or two Santa gifts only. Not only does this put a limit on things it also gives her a reasonable expectation for what Santa can do. I never want her to write a list and expect to get it all, this isn’t realistic in most avenues of life.

Given that our budget for her has been very small, we’re now at a point that realistically we need to increase it a bit. We will still be very modest in our gift giving with her (not the focus of the season for us), but we need more than we have in our old budget.

Some people spend $0.00 on gifts and that is 100% fine. We’ve gone through years where we haven’t exchanged (at least with each other) and been fine with it at the time. Though Christmas will always be Christmas even without the gifts, there is a part of me who gets genuine joy with the exchange of a gift. Again I think we’re already pretty modest in our budget but now we need to sit down and get comfortable with a new budget. It will force us to sit down and figure out how we want to experience it all.

How do you decide how your budget will get broken down? What are your non-negotiables?

Why We’re Taking a Debt Repayment Break

I mentioned last month that we managed to death-murder-kill one of our loans. The loan we had been throwing most of our money towards. It felt great and I feel like I can breathe a little…just a little because we still have quite the road ahead of us.

After paying off this particular loan, we decided to take a very short, two month break from throwing every single penny towards debt and this also feels nice. More normal and I feel like it needed to be done.

Stress Levels…

Near the end of paying this particular loan off, my stress level was increasing. I was laser focused on doing everything we possibly could to make it happen. My original date was Nov 6th (my birthday) but when the possibility of earlier became evident I went after it. I was to the point of throwing money at it without thinking about any repercussions (taking away all cushion room in our budget). Thankfully we made it to the other side and are now focused on our next goals but I wanted to take a little break.

I’m happy to report that we didn’t take a bunch of cash and party it away. Day-to-day hasn’t changed much at all. Our budgeted amounts for everything else remained the same (though we may have gone over a bit, guilt-free). Instead of putting our normal amount towards debt, we instead saved some, in both our ER fund and for our upcoming trip in March, will be setting aside money for my passport renewal and put money aside to pay for kiddo to start dance classes in the new year.

Going Forward…

I took some time last week to start our 2016 budget. It still needs a few changes but it’s pretty much completed until July 2016 and I’m happy with it. There is little to no additional debt repayment (ie minimum only on student loans) until this time since we’ve decided to go ahead and buy a much needed second car. I haven’t factored it in yet but I’d also like to pay off one of my remaining student lines of credit (currently at $2,500) within that time frame but it isn’t a priority until car is purchased…we’ll see 😉

After the car is purchased and our budget is again readjusted with insurance and gas changes, we will refocus our efforts on debt repayment with the hopes of paying off Hubby’s remaining student line of credit but we’ll have to see how the next few months unfold.

For now we’re happy and finally have a little room to breath and decide how to work our money rather than basically being told what to do.

Have you ever taken a ”break” from debt repayment or other financial goals?

When Being Frugal Backfires

wpid-wp-1446991438929.pngBeing frugal is a way of life for me. I’m always looking for a good deal and looking to figure out ways to get the things I want for the best price possible. Though this is often a good thing, sometimes I end up losing out on a deal because I end up taking too much time thinking about it or doing research, and sometimes I jump on what I think is a great deal and it’s not.

Most of my frugal choices in life work out. Unfortunately though, there have been instances where my money-saving ways have not worked out so well, and my intentions blew up in my face.

Wedding Band

When we got engaged I couldn’t find exactly what I wanted for a wedding band around here for, what I considered at the time, a decent price. I did find a wedding band but it was about $300 more than I wanted to pay. The Canadian dollar was doing pretty well at the time so we ended up buying our rings online from a jewelry store in the US. We got both our rings for less than $700. Though the experience of buying the rings online was overall quite good, the problem that I didn’t consider though, was that because we didn’t buy here, stuff like having the ring sized, scratches fixed or loose diamonds wouldn’t be covered. While I did price out the initial sizing knowing it would need to be done, I’ve had my band re-sized a total of three times, I also had to have the gold re-dipped because though it was white gold the color was a slight difference in tone than my engagement ring and needed to pay to have it re-plated. Now I’m faced with a missing diamond and a second loose one, a repair bill of $150 plus tax.

Had I bought a similar ring here, for about $200-300 more, it would have been much cheaper in the end since all of the repairs I would have needed would have been covered by the store I bought at. Lesson learned.


About two years ago we needed new tires for our truck. We called around everywhere, doing our homework and were eventually talked into a good deal. Long story short, less than six months later we found out our good deal wasn’t such a good deal because the ”green” tires that were put on our vehicle were not actually made for our type of vehicle and we literally wore through them within a few months. We threw away $700, that was a tough pill to swallow but thank goodness for emergency funds.


I’ve wasted my fair share of money on clothes I didn’t need, weren’t exactly what I was looking for, or were just cheap. One dress comes to mind as a discounted dress I bought for a wedding. I paid $20 for the dress on clearance, again settling for it because I was tired of looking. I put the dress on right before the wedding and felt the zipper split right up the back. With no other options, we stopped at the tailor on the way to the wedding and had a new zipper sewn in ASAP. The zipper ended up costing more than the dress itself!

Living a frugal life has, for the most part been great to us. Though there are things in life we do enjoy spending out money on, I like that we have a good balance between money saving abilities and saving up for what we enjoy.

Has making a frugal choice ever back-fired on you?

Top Credit Cards for Savings and Rewards

-1Even though a great deal of people tend to shy away from credit cards, having a way to invest in yourself, your credit, and your future are important. Even though you may not think of credit cards as an investment, a credit card that offers rewards for each dollar you spend can not only help you gain credit but also pay off major purchases more quickly. And if your credit card behavior is healthy, extra perks can make your life easier.

Ensure you have a backup plan for when you need a little extra money and get the rewards you need for things along the way. Whether you travel often or just like to earn cash back for everyday things, a credit card is the perfect way to make your financial situation easier. Take a look at the best credit cards for saving money and earning rewards.

Chase Sapphire Preferred Card

If you travel often, the Chase Sapphire Preferred Card is perfect for rewards on flights, hotels, and travel related purchases. Like most rewards cards, the Chase Sapphire card offers an extra 40,000 points when you spend $4,000 in the first month. If you are planning on going on vacation, this is the perfect opportunity to take advantage of the signing bonus.

Not only that, but you’ll earn 25 percent more rewards when you spend your points on the Chase Travel portal and 2 points on the dollar for every travel purchase you buy. Most travel cards require a yearly fee that will be charged on the card regardless of your purchases; however, the Chase Sapphire offers a $0 annual fee the first year. Since the card is open internationally, it’s perfect to be used on foreign travel.

The Susan G. Komen® Pink Ribbon Card

1Sometimes it’s better to give back than it is to get the best rewards. If you’re more interested in charitable contributions and less about what kind of money back you’ll get, the Susan G. Komen Pink Ribbon Card is perfect. Partnering with Bank of America, the foundation gets a percentage of each purchase made with the Pink Ribbon Card. Just by using the card, you can ensure the foundation receives $3 and .08 percent of every purchase you make on the card and money for each time you renew your card.

Not only does this add to breast cancer treatment for women and men all over the country, but it aides in breast cancer research. With help from Bank of America and you, the foundation is guaranteed $3 million in donations in the next few years. Think of all the lives you’ll be helping.

Starwood Preferred Guest American Express

When traveling, finding a great hotel isn’t always easy. Not only do hotels get booked quickly, but affording a good one can be difficult. If you’re looking for a credit card that offers the best hotel rewards, the Starwood Preferred Guest Card from American Express is the perfect solution. Not only does the card offer amazing options for purchasing hotel reservations, but it has a higher average per dollar reward value than any other card available.

The card great for those on personal vacations, and it makes a wonderful option for business travel as well. You earn reward points for each dollar you spend, and you’ll get double the points when you use them on a Starwood affiliated hotel chain. Don’t worry that you’ll be stuck in second-rate hotels. Starwood affiliates with major hotel brands and resorts all across the world.

Chase Freedom Rewards Card

Even if you don’t plan on traveling or staying overnight anywhere, it’s always good to get rewards on the things you purchase everyday. The Chase Freedom rewards card offers the best cash back points on the things you buy every month. Not only do you get 5 percent cash back on special purchases, but you’ll get 1 percent cash back on every other purchase you make on the card.

For the best earnings, use the card each month on spending to get the best rewards. If you spend at least $500 in the first three months, you’ll automatically get $100 cash back to spend on whatever you like. Each month, check to see what special 5 percent rewards you can receive. From groceries and gas to popular restaurants and shops, you can earn special cash for spending money on things you already purchase.

The Positive Effects of Paying Debt Off

Debt sucks. You work hard for your money and watching it go to someone else is no fun. The only thing worse than debt is when you’re in debt and not in control of it. I’ve been there once and I never want to go back. I had just graduated and got married and had yet to face the reality that was (mostly my) debt. My husband brought a small amount into the marriage but by comparison to me, peanuts.

We were making the minimum payments but never came up with a plan to pay it off, we were incredibly stressed out. To add to it all we now had a baby on the way and I was about to go on maternity leave (with significant reduced income). We came up with a plan and I’m happy to say we’re making great progress. Along the way there have been many amazing side effects from paying our debt off.

Emotional Well Being

There is an indescribable feeling that comes with having full control over your money. When you finally know how much is coming in and going out, is an amazingly peaceful feeling. The anxiety goes away. Though it’s never fun sitting down for that first time to calculate debt owing, it’s necessary and brings a total calm with it when you finally know. As you start paying your debt down it just feels good, an accomplishment that you can see as you log into your accounts.

You Have More of Your Money

As your debt is paid off, more of your money is actually yours. Now that we paid off one of our large loans, we can finally work on saving to buy a second car that we desperately need. We’re still working on our remaining debts but we have the flexibility of taking care of something that our family needs as well, and it feels amazing.

You Appreciate What You Have

When you’re not in a situation to drop a wad of cash on new clothes for example, you appreciate what you have much more. You become resourceful too. There were times we may have needed something but many times we made do without whatever it was. Though we have never embarked on a deliberate no-spend challenge, we have lived these last few years really only buying things we literally need, there have been very few wants. Even once the debt is gone, are we have more disposable income, I know our appreciation for things (including our money), will stay. We will forever be conscious consumers, never a bad quality.

Being in debt can be down right terrifying and paying it off is required. It isn’t all bad though, there are many positive effects that come when you pay your debts off that can be hard to imagine when you’re at the beginning but ask anyone who’s already started, or already succeeded and they will confirm that facing your debts will be one of the best decisions you ever make.

What was the best thing that came from paying you debt off?

Would You Rather Have a Dream Home or Dream Budget?

Source: Free Digital Photos

Source: Free Digital Photos

I admit that though we’re a few years away from moving, I waste far too much time perusing the local real estate market. Consider it homework. I’ve said it before but this house is far too small for our family. We will probably bring another child home in this current house but will need to move before the kid needs their own space since we really only have two dedicated sleep rooms (third bedroom is necessary home office space which Mike uses for work). I have no issue with kids sharing a room, especially while young, but this is only one reason on a big list why we need to move, and so, I obsessively search the local listings to see what we may want when time comes.

Though we don’t love our current location there are quite a few perks to living where we do such as proximity to childcare (daycare and family), great school zone, convenient for amenities and we’re a decent location for family visits, which we love. We however crave much more privacy (not an option anywhere near our current house, regardless of price range), more storage space (indoors and out), and a neighborhood with more kids (a lot of retirees in our area despite great school zoning).

Though we love a lot of ‘non-negotiable’ items about our current house (schools, family), we’re not against totally picking up and moving within, I’d say, a 45 minute radius of where we currently live which is one of the reasons we’re looking now, so in a few years we have a better idea of areas we’d like to narrow our search.

The issue I’m finding though, is deciding if I’d like my dream house (a term I use loosely) or stay within my dream budget.

I like where our numbers are at now (especially as debt decreases and our wages continue to increase). Though we could comfortably afford it when the time comes, I really don’t know if I want to increase our mortgage by $500-$600 per month. I know it will go up when we move, for no reason other than there’s an 80% chance we’ll move to an area with increased property taxes (we’re currently crazy low for the area we live) but I like the idea of keeping our mortgage and property tax payment lower than $600 per month difference.

Accepting a $500-$600 per month increase would definitely get us the house we want, and need, with quite a few options to choose from. My homework is showing me that less than this (predicted) increase and we’re looking at older homes that will require a decent amount of work. Though this isn’t always the case, $500 seems to be the threshold between finding a home we could move in and be immediately happy in, and finding a home with the space we need and maybe even the location we want, but requiring quite a bit of work.

Obviously there are ways to decrease this dollar difference, we could save longer for a larger down payment. Realistically by the time we’re done paying our debt off, have another kid and oldest starting school (I don’t want to move her once she’s too established), time won’t be on our side. I’m not completing all the above and then saving for another 18-24 months, I’ll just be honest. We will be gone within three years. If the housing market remains the same that it is, we won’t get anywhere near what I’d like for our current home too, a fact I’m bracing to accept.

So as I continue to play imaginary number games, I’m curious, would you rather have the dream house (great location, layout, school, mostly move-in-ready with 1-2 young kids and working full-time) OR get a home that you may not love but works better for your budget? (Again, it’s not even a matter or affordability, we could comfortably do it, I think I’d rather just have more money for other stuff, stuff I can’t even define right n0w, probably travel??).

Vacation Destination Real Estate Prices Help Property Owners to Make Interesting Moves

Real estate prices in popular vacation destinations have recently skyrocketed. This has driven rent prices up with it. If you rent or own a seasonal getaway home, then there are a few things that you can do to save money. You might even be able to profit from some of these shifts in the market.

The Nantucket Case Study

Nantucket, Massachusetts is surprisingly small for a place that’s so popular as a vacation destination. It’s located on a 50-square-mile tract of land that’s south of the Cape Cod area. Due to it’s small size and prime location, real estate prices in Nantucket have been skyrocketing for years.

A four-bedroom residence once went up for sale on the island for slightly under $30 million. Rent costs have been increasing along with the costs of property.

Real estate mogul Louis Ceruzz made a very smart move when he decided to stop renting a home on Nantucket and instead bought a home. He’s the chief executive of a prominent real-estate developer in Connecticut, and he knows a good deal when he sees once. He had been spending his summers on the island in rented homes for 20 years before that.

While renters are free of most of the obligations of owning a home, they have to pay whatever property owners demand. The cost of owning a home in a popular vacation destination can ultimately be lower than the cost of renting one each year.

Some enterprising individuals may even decide to rent out their summer homes during the winter months. This can help to defray the cost of owning the home. It might even be profitable in some situations.

Southern Winter Living Becomes Permanent

Many people who are retired or who work in seasonal industries keep second homes in warm southern states. These individuals often live the rest of the year up north.

This type of a seasonal migration can become quite expensive, but it’s more popular than ever. An estimated 1 million people move to southern states in motorhomes each year. So many people own second homes that analysts haven’t even been able to provide any reliable statistics on the numbers.

Those who are finding the cost of making the trip down south every year are finding that they can sell their northern homes and make their second homes permanent destinations. Real estate prices have rebounded in many areas, which make this sort of a plan possible. It can put cash directly into the pockets of owners as well as help them to avoid a costly trip.

Landlords Sell Off Homes

In a few areas, particularly in the Four Corners region, some people have purchased several different homes near popular vacation destinations with the intent to rent them out. Some of these property owners have found that their homes often sit empty. This can get rather expensive.

This has made some people put a little work into their homes and then list them on the real estate market. Vacationers and seasonal travelers who are looking for bargains have often been paying prices for these homes that help their current owners to take home a decent profit.

Deciding What to Do

If you already own a second home, then you might not want to act too quickly. Take a moment to examine the current market conditions. The same goes for if you’re looking to buy something in a popular destination. Shopping around can help you to find the best deals. Always make sure to do your due diligence before opening your wallet, and you can end up really loving your living situation.

Rant: Why is Halloween So Expensive?

We lucked in this Halloween. Our daughter asked to be a princess. A generic princess with no specifications (besides shiny shoes). If any of you have kids, you will know, had she asked to be a specific princess (Elsa, Anna, Cinderella…) no other costume would do, and if we didn’t buy the exact dress we’d be in trouble. Kids are smarter than we give them credit for and if you try to pull off a generic princess dress as anything other than a generic princes dress, they will call you out on it and make your life a living hell.

So when I confirmed a pink princess dress would do (a dress-up costume she already owned), I was more than pleased. Have you seen the cost of children’s costumes lately?! Even at usually reasonably-priced stores like Costco we’d be looking at $40 minimum. Online, some were even more so I feel like we dodged a bullet in the costume department. We will use a dress-up dress she already owns (A post-halloween find from last year) and purchased shiny shoes from WalMart for $10. We can thank the dollar store for her crown and jewels, again she already owned. I simply cannot justify $40-$50 for an outfit she will wear 1-2 times, mind-blowing actually.

I think what boggles my mind more is the cost of candy. I’m not a Halloween Scrooge, though I don’t love it, I do enjoy participating in the giving out of candy and see the kids all dressed up. We’ll get probably 100 kids but with it being on a weekend this year maybe more? (but maybe more parties will mean less trick-or-treaters?). I went to the store to look at a box of candy, 90 pieces $17.99. I know there are better options out there (I’m sure we’ll go to Costco), but $18 seems like a lot for a single box of candy. Why do the evil people in the world deem it inappropriate to bake something cool or make candied apples for the kids?!

Kiddo will also have a party at daycare next week which, though not necessarily expected, parents usually bring a little treat. In the past she has received small gift bags from other kids and I’ve usually made a treat for them to enjoy. Needless to say I don’t usually have many halloween-esque ingredients in my pantry and can predict a $10-$15 trip to my local bulk store and dollar store for the kids at the party.

We got off lucky this year so far. With candy, costume parts and treats I don’t expect to spend more than $40 total. A fraction of what I suspect most will spend. I’ll tell you what though, If kiddo really wanted to be a specific princess, it’s a battle I would probably would not fight. In the frustration that is the lack-of-understanding in the three to five year old age group, I probably would have bought it for her and been $40 poorer.

How much do you expect to spend on Halloween, if at all? Do kids still make their own costumes (like we did last year)?wpid-img_20141031_081143.jpg

Confession: We Don’t Have a Budget

Source: Free Digital Photos

Source: Free Digital Photos

I tell people all the time that we have a budget. Friends, co-workers, you guys, but if I’m being honest I’m totally lying to you. We do not have a traditional budget. Honestly, traditional budgets just don’t work for our lifestyle and it took me a few years to figure this out. Everyone was telling me that we needed one. If we were going to be successful at anything we absolutely needed one. But guess what? As I just wrote about, we paid off over $27,000 worth of debt in the last year, and we didn’t have a budget.

I’m not a budget hater, in fact I’m a huge advocate for them. I really think 9 people out of 10 will benefit from having one, I also think there is a small portion of the population who can manage without one and that’s ok. It is personal finance after all.  I’m not suggesting you throw all caution to the wind though. I said we didn’t budget, I didn’t say we weren’t monitoring our money. Big difference.

The frustrations I was having with a traditional budget was that it was usually done monthly based on salaried income. We’re paid bi-weekly and have varying income. Living by a traditional monthly budget was leading to major frustrations for me. I’m not saying it can’t be done but I’m explaining I didn’t like doing it, so I started to look into a system that made more sense for us.

How we control our cash

Though we don’t have a budget what we have instead is a money monitoring system. Mike created a spreadsheet that is broken down into our specific pay periods. We happen to be paid on the same day which makes things a little easier but basically the speadsheet is established in such a way that it does this through calculations:

$$ amt in bank account + predicted income*- expenses**=leftover ”carryover” amount to next pay period; automatically repeated as many times as you want, calculation carries forward.

Note: * predicted income: I predict our incomes for months at a time (usually in a worst case scenario) and then change to exact amount when we actually get paid. If pay is different than predicted, I adjust other categories like debt repayment amount. Our **expenses are all monies out for the two-week period.

What’s Different?

To start, all cash gets deposited into account ‘B’, where 100% of bills are paid from. Every two weeks I transfer $xx from account ‘B’ to account ‘A’ where we do our day-to-day non-budgeted spending.

The difference between what we do, and a traditional budget, is that I don’t ”budget” for any non-bill (groceries, eating out, gas, clothes, cash etc). Instead I allocate a dollar amount to us for the two-week period and we then decide how to spend it. Sometimes, usually, we don’t decide at all and we just know we have that amount to ”live off” for two weeks. Sometimes we spend $250 on groceries and $50 on eating out, other times we spend $150 on groceries, $100 on eating out and $50 on candy. Obviously this is an exaggeration but our two-week spending varies (I almost always allocate the same dollar amount to us though, and it’s more than the $300 example I just gave).

I should also note, what I consider a fixed expense is also different from the traditional budget vocabulary. Our minimum non-mortgage debt payments every month are about $950/month. Obviously this won’t pay off $27,000 a year though, so our minimum payment is actually set at $1,650/month in my spreadsheet, the $700 difference is its own payment with a date attached. It gets paid as its own bill. Same with stuff like birthdays. If we have an upcoming birthday we set aside $xx the pay period prior to, and treat the gift as a bill.

I also don’t add any of our freelance/extra/overtime/expense income to my spreadsheet. If we make anything, it is decided when the time comes what is done. No surprise that 95% of the time it goes on debt, but sometimes we splurge and have fun, like buying a 60″ television 😉 I don’t like the idea of creating a system based on monies over and above what we earn in our careers.

Don’t tell me how to spend my money!

Sometimes I like the idea of playing the money game of ”you only have so much money for X thing” but most of the time it drives me kind of crazy. When it comes to our Christmas budget, it is a true budget that we follow to a T. I have fun setting out to see what I can get for my husband and daughter within our set dollar amounts, but month-to-month I like a little more fluidity. If I want to blow my whole two-week dollar amount on chocolate and wine (though we’d die of starvation and had no gas in the car to get to work), I want that freedom which is why our money monitoring system works. It works because our priorities are set and we live life around them.

Do you have a traditional budget? Why, why not?