This month I'm writing about our budget.
This took a while for it to come about and for it to finally be something that works for US.
When we first started DR (Dave Ramsey) I had SO many things on our budget list. They were a list of:
Gas and Oil
Car Repairs and Tires
Clothing – Arnold
Clothing – Miranda
Clothing – boys
blow money (spending money)
medical (co pay and prescriptions)
Next big thing – Piano tuner
Next big thing – Camera
Next big thing – Computer/Photo drive
NOT included are things like bills/rent/CC's, anything paid for directly from our account
- the last 3 things "Next big thing" were not part of the DR program but I needed themNow our "budget" looks like this:
Rent Bank Fees Offering Internet Resp Insurance Student Loan Cell Phones Mir Visa - CC Arnold Visa - CC Arnold MC - CC Mir MC - CC Mental Health Food Gas/oil/car Entertainment/Eating Out Education/Book Orders Medical/Health Christmas/Birthday Commuting Cost
While there may be "more" lists they aren't as detailed as they were before. We have found some things work better for and some don't. For example... We save about 40.00 a month for Christmas/Birthday. But during the summer months we kinda "lax" on that. Not because we don't want to do it but because we don't have many birthdays or anything to go to or do.
About 2 months ago we added in our "Mental Health" fund. It's $40.00 a month. It's mainly for when I just can't handle cooking, we have nothing ready or I just need out of the house. we use that to help with whatever the cost might be. So if we have 20.00 left in our entertainment/eating out budget that's enough for a babysitter. And Arnold and I can go out on the 40.00 from the mental health category.
We have also switched pays since we started DR. When we had started we were paid on the 15th and the last day of the month. Now we are paid every 2 weeks. This means that there are 2 months where we get paid 3 times a month.
This just happen for us. We were paid 3 times this month. Last year I didn't quite "get" it so this year I was really careful. I put away the 2 weeks worth of grocery money, 2 weeks worth of gas money, part of our rent money and 2 of our things that have to be paid every month. we had enough "left over" to put $500.00 on a CC and $500.00 into savings for this summer's boat trip. And to help this summer if needed.
So here's the breakdown of our budget, so you have an idea:
Rent: Our rent is taken out on the 1st of every month. Our Rent budget include our utilities (which are included in our rent cheque). We save the month before for the next month. For example. This month we have been putting some money away each pay to cover July's rent.
Bank Fees: We pay more than we "should" but this covers anything and everything. We have unlimited bank accounts (we currently have 6); up to 10 e-transfers a month (we use anywhere from 2 to 4 a month); and unlimited transactions.
Offering: We have started to do our churches direct withdraw from our bank account. It comes out on the last day of the month.
These three accounts (Rent, Bank Fees and Offering) are saved for in one account labeled "Rent" in our bank.
Internet: My husbands work pays for a portion of our internet. This is because Arnold is on at least 1 pager rotation a month (prime and secondary) and needs the internet at home in order to keep it working. While it doesn't cover it all it does cover part of it. We have this bill automatically taken out from our CC. This was something that was needed to set it up. And for us, it works well (not recommended by DR). We take the first pay each month and put on the amount of our bill to the CC right away. Then the bill come in and the amount we have put on "credits" the amount that is billed. Then the money we get from hubbys work goes into our budget as well. We have had to upgrade as we host a server in our house and we have enough people using the internet that it's needed.
RESP: We started this when Kyler was born. It's a Registered Education Savings Plan. We put $25.00 per month per child away for this. It's not something that we *should* be doing yet (according to DR) but this was something we needed so Arnold would feel more comfortable doing this program. He wanted to know that even if it took us 18 years to pay everything off our kids would have something for school.
Insurance: We pay this from our bank account every month. It comes out on the 22nd or so. It's for our liability, our car, Arnold's bike, and our contents.
Student Loans: My Student Loans were paid off last year (thank you for all your help!) and now we are plugging away at the loans Arnold has. Which is a lot. These will take us way more time than we want them too but that is ok. We know why we got them and they are a loan we can handle for now. Every few months Arnold does apply for "interest relief" because we can't afford the complete payment. We have been blessed in the past few months to be able to put a little more on the loans. A few hundred here and a few hundred there have helped us to get them down a bit more.
Cell Phones: One thing you will see is we do NOT have a home phone on our bill. When we moved to Toronto we got a home phone and something happen and it fried! So we figured, why keep 2 cell phones and a home phone. So my cell is our "home phone". Arnold's phone is truly the cell phone. My phone doesn't stay at home however. This has been a bit of an "issue" when hiring babysitters. Our Babysitters need to have cell phones or something to contact people if help is needed. We have left one of our phones at home every once and a while.
Mir Visa/Arnold Visa/Arnold MC/Mir MC: These are our credit cards (duh!). We made some serious mistakes years ago and are paying for them now. Truly. We are working on getting them paid off. When we started the DR program we had 6 CC, a family loan and 2 student loans. We are now down to 4 CC's and that's it :) This does make me happy. I realize not for everyone but we are good with this. The DR program recommends that you put your lowest amount CC first. You pay that off then use the payments you would have paid to "snowball" to the next CC and get it paid off asap. While I believe you can "live" without CC's in Canada I feel like we need to each have one. I'm closing my VISA and Arnold will close his MC. This way we have one VISA and one MC. Each, that we are keeping, are the lowest interest rates of them all. However... DH's VISA is our lowest balance. We aren't paying that one off as fast as possible but it is on our list.
Mental Health: As I explained above, this one was just added in to make sure I don't go crazy!
Food: Our Food budget is taken out in 2 week intervals. I used to do shopping once a month (see last post) but now I'm going weekly. This is helping us out a lot more. And it makes me putting money aside for it every month helpful. Our food budget does include things like Food, cleaning products, possible needs for the house.
Gas/Oil/Car: This budget is mainly for the Gas/Oil part. See, we started, what most people call, a "sinking fund" for the Car. We know one day we will need to replace it. For now. We have about $1,000.00 put aside to help repair the car, or help to buy a new one if we need to. We just recently brought our car in to get the AC fixed (cause I don't want to melt in the car) and that came out of our car budget. We will build it back up as "extra" cash comes in. We never let it go under $500.00
Entertainment/Eating Out: I don't know about you but I have never been able to go a whole month without eating out. And with our crazy schedules sometimes it's good to have this as an option. This covers going out to a movie (which we rarely do) and going to have dinner out. If we go as a whole family (5-6 people depending on the day and time) it can cost us anywhere form $50-$80.00. This isn't too bad, but sometimes I'm in shock how much we spend. This helps us to realize we need to pick good days to go out.
Education/Book Orders: We put this in when K went to school. There were so many things I had forgotten about that I wanted to be able to do for K and Q at school. They have a "Nutrition Program" where you pay $2.00 a week (Toonie Tuesday) and we get money to help run the program. I've begun to learn more about it and know that at last 2 people in every classroom NEED this program. They didn't have breakfast or anything so they can't make it to lunch. If they have a lunch. This program helps our kids have food to eat. We also have book orders. Lately we have limited how much we can spend on it each month. One month K picks a book (below $10.00 unless they pitch in their own money) and the next month Q does. It's a great help for keeping the cost down.
Medical/Health: This covers drugs :) I am on BP meds and this covers my meds. I get most of the cost covered by our health plan (taken right off Arnold's pay cheque) but I still have to pay the fee for getting it. It also covers things like headache meds, drugs for my sinus cold last month, the kids meds when they have colds or are sick. That kind of stuff. This is something we do have a "cap" on. We never have more than $100.00 in this budget. It just doesn't make sense.
Christmas/Birthday: This one, as I've said above, is hard. We have K's bday in March, Q's bday in April, my bday in October, Arnold's bday in November. And then Christmas. So we don't "need" money in the summer time for birthdays but it changes now and then. We are also beginning to experience friends birthdays and going to their parties. We have had to increase our budget a bit. We know that at Christmas we spend, maybe more than others. So we take what we spent last year, add about $50.00 (since prices always climb) and we budget that out for 12 months. Then add some extra for birthday times as well. Every year it's different but generally we can handle it. all.
Commuting Costs: This is part of the reason our "Gas" budget isn't as high. And why we only have one "car". Arnold has a bike that is a big part of our savings. He saves about $5.50 a day by biking. While that may not seem like a lot to you, and sometimes to him (mainly on days it's raining) he loves biking. It keeps him in shape, he does something, most others don't and he loves setting an example to the kids of what he can do. In a month, if Arnold bikes every week day, and there are no vacations, we save $110.00 a month. This is in our budget, not as a saving, but knowing that we still need to spend money on it. Arnold's bike needs new things all the time. It's like another car (and sometimes I'm pretty sure it gets more KM's than our car does!). We try to put aside $40.00 a month to help with the costs of repairs. If it's not all used it gets socked away for the Bike Show in Toronto when we go and he gets new shoes/gloves/tubes/ect to stock up at home. He also takes the TTC to get to work in the winter months (sometimes) so we pay for that, which means our costs go up in October until March. They are between $95.00 to $110.00 (depending on vacation times/days).
Anyway... this is our budget. I know there is so much more I wish I could help you understand but I can only tell you what I have done. If you have questions please let me know. I'll do my best to answer them. Remember this is what works for US. Not the whole world but what works for US.
Next month I'm going to write about "sinking funds" and how important it is to have those around. Even if you don't own a home!