5 Reasons Why Falling off the Budget Wagon Sucks

It’s no secret that Dave Ramsey lives in my house. Even if we don’t have a budget set for the month, he’s still in these four walls. Here’s the thing about not having a monthly budget, he’s here in a not fun way. I know it’s a reflection of his principles and our belief in them that causes the guilt, but man, the guilt. I’m too afraid to look back to the last month that we actually made a budget, but I’m pretty sure it’s been a good six months. Here’s the thing, some months (most?) it worked in our favor. Meaning, we didn’t spend more than we would have wanted to. That doesn’t mean we don’t still feel guilty.

  1. Guilt. Even when you don’t spend too much money, you still feel guilty that you spent any because it wasn’t accounted for and tracked. I think, for the most part, when we don’t create a budget we get in each other’s heads and go into extreme savings mode. We assume that since we aren’t tracking the money, then we don’t have it to spend. Which in turn makes more guilt when you do spend money. Money that you probably have to spend. But, you don’t know that because you didn’t create a monthly budget. You see where I’m going with this?! When you live like no one else, you can’t turn it on and off. You have to commit and be diligent.
  2. Miss goals. We’ve missed some family & financial goals over the past few months. The irony is that it’s not because we spent the money. It’s because we weren’t focused on our monies or goals. We could have started projects sooner, but we were in this self-inflicted feeling of not having any money. We didn’t realize that our savings had reached the point of moving forward with the project. When we got antsy to move on projects, then we had to spend extra time going over every dollar and figuring out if we really could start. Just because we saw the money, didn’t mean we hadn’t missed something else over the past few months. It wasn’t a complete setback, but it still took a lot of time and mental willingness to move forward.
  3. Inaccurate spend. There have been a few changes to our normally line items over the past few months. For instance, we’ve spent the past six weeks carpooling and are driving a shorter distance. We have absolutely no idea what our gasoline budget is for the month. One, because we aren’t sure what an accurate amount was when we stopped budgeting. And, we didn’t do a budget last month so we have to do some research on spend last month to predict this month. Again, time wasted. Another item is our grocery spend. We’ve been buying most of our groceries out of the organic section and with it being summer we’re going through a lot more fruit. This is another item that has been ongoing for quite a while and we don’t know where it’s at. Each monthly budget is based on the past month and then things coming up this month. We can’t accurately plan without knowing how these line items have shifted. More time wasted.
  4. Failed savings. We said this winter that we needed to start Quinten’s college savings fund. It’s July and we haven’t done it yet. Nor have we investigated to see if we’re doing the same thing as we do for Maximus. It’s one of those unchecked items that continues to linger in the background. Adding to the guilt in item one. We rarely move money from one savings account to something else, so even though we’ve been saving money that could be for his college, we haven’t been. We work under the philosophy that the accounts stay as they are and money doesn’t getting taken out of them. If we want something new, we add it to the goal list and save up for it. Or, we look at our monthly spend and add it to the current or next month. {This philosophy is probably what makes us end those non-budgeted months with more in savings than we thought!}

As you can see, we’re spending July getting back on track. We’ve put our Excel budget spreadsheet on hold and are testing out a new budget app that we put our monthly budget into and then track our spend. So far we like it. It helps us see what we have left to spend on each line item and I enjoy seeing the pie charts of categories. July is always a tough month because of summer life and Maximus’ birthday. We know it’s coming, but that unexpected extra spend always gets us. Like, how much should we really spend?? We’re 4 1/2 years into this financial journey and we still have a hard time staying focused. I can tell this is going to be a lifelong journey!

What are your tricks to staying focused on your budget?

Baby Steps Four and Five

I’ve talked a lot about our financial peace journey and how we’re following Dave Ramsey’s Baby Steps plan. Until yesterday, we were on Baby Step 4. We really shouldn’t have been, but our own laziness kept us there for a very long time. With the new year, I’ve seen and been part of quite a few conversations related to money management and getting out of debt. It’s exciting to see and I wish everyone the best of luck. The Ramsey plan has worked well for us and I know many others who have used it also.

We were stuck on Baby Step 4 for at least a year. The problem started when we kinda, sorta stopped paying attention to Baby Step 3. We were saving but hadn’t decided how much we wanted to put away. One day last spring, we sat down and came up with a number that covered four months worth of bills if we both lost our jobs and eight months if just one of us did. Next {read: months later, more procrastination}, we transferred that money out of our savings account into a designated account that had a little ability to make some money.

With our emergency savings out of the way, we started talking about goals. We created a priority list that included maternity leave, medical bills, new living room furniture, nursery furniture, and a new car fund. We continued putting money away for our goals and started talking about the next Baby Step.

Our company has a 401K matching program and we both put 10% away. We’re maxed out on our current plans so our first road block was determining where to put that extra 5%. Bryan has done a lot of research to determine the types, benefits, and rules to pre- and post-tax plans. He’s the planner and doer in the family when it comes to our finances and I’m the free spirit. So, he knows the specifics and I remember as little as I need to survive in a conversation with him. 🙂 He had finally made the decision on what we should, we just had to make the changes.

Month after month we had the goal of getting that finished and month after month something came up. Wait until that raise goes into affect so we know how much our new take-home is. Let’s wait and see what happens with the fiscal cliff and how that affects our take-home. I’m having a baby and want to get the house in order instead of focusing on FINANCES.

I am excited to say, after way too long, we’ve finished Baby Step 4! Working by the glow of his computer screen, Bryan did one more round of research and updated both of our retirement portfolios. While I fed a newborn, he crossed off another Baby Step. It left us both wondering why it took so long! We don’t know how it affects our paycheck yet, but I’m glad it’s finally done even if that means we “lose” some of that monthly spending money.

Last week Bryan did something that’s kind of illegal when it comes to the Baby Steps. He completed Baby Step 5 before we’d finished 4. Again, Bryan had done an insane amount of research into what was best for education savings plans. He was getting a little nervous about Dave’s recommendation and the impending vote for the fiscal cliff. A Yes vote would take the yearly contribution max and cut it in half. So, he found a compromise between what Dave suggested and what wouldn’t be affected by a Yes vote. {Good thing, huh?} Since the vote, Dave changed his recommendation and it aligns with the 529 account that Bryan opened up.

So, Maximus is going to college! Heh, we were already planning on it and had a general savings* account set up with a monthly direct deposit. But, it wasn’t nearly the amount we needed to be saving per month. Now that’s completed and we can cross that off our mental to-do list! As he excitedly turned to me and announced that Baby Step 5 was complete, I lifted up our second born in a Symba-like style and reminded him that Quinten wanted to go to college too. Tomato / tamato. I say we aren’t done with the Step until we get one set up for Quinten too. 🙂

*Now that general savings account has become the yearly Christmas account! And that makes me so excited. Excited go be making smart decisions for our family so we can live like no one else! That’s something we’ve been talking about doing for years and guess what? We just hadn’t gotten around to it! Do you see our theme? Next year we won’t have to pull the money out of our savings account, which means we won’t have to put any goals on hold.

We lost our motivation and got a little sidetracked on our financial peace journey in 2012, but with the new year comes a drive to keep pushing forward. We’re over the moon excited to cross Baby Step 4 off the 2013 family goals list! I might even give 5 a status percentage. 🙂

What keeps you motivated to continue moving forward with your financial goals?