Being examples and teaching our children how to budget is super important.

Making your money work for you is important.

We’ve spent most of our marriage struggling to climb out of debt while keeping up with too much stuff, wanting this and that – and more, more, more.

As a large military family living on one income, it’s often difficult to keep our heads above water.

We strive to teach our children the value of things and experiences. I want them prepared for real life with all its financial ups and downs.

We teach our children that a trip to Florence is more important than that new Lego set. We want them to realize that rent and food and utilities and insurance have to be paid, but sometimes we have to buy the hamburger instead of the steak to offset the expense of fixing the van. Internet and smart phones and TV are luxuries, even though we’ve come to see them as necessities, like utilities.

We have to be prepared for surprise financial setbacks with a savings account and budget in place.

Growing up as an only child, I was privy to how my parents ran our household and planned for the future. I am fortunate that I accompanied them on home and car purchases to learn how that works. They’re very organized with their investment portfolio. Since they are both retired government employees, they lived on fixed incomes, but with careful planning for many years, they live very comfortably.

Financial education is important.

Isn’t that the goal? We want to prepare for the future. We want to help jumpstart our kids into a financially successful adulthood. We want to live comfortably in retirement. We want to leave our children a legacy. We want to be able to bless others.

How do you set a budget?

Creating a budget or spending plan for the first time can be overwhelming.

A budget dictates to you what you can spend, where, and when; a spending plan allows you the control of your money every single month. It realizes that your purchases change and expenses vary from month to month and that a one-size-fits-all monthly budget doesn’t truly fit anything.

~Becoming Minimalist

What’s Your Income?

Know your income.

This should be a no-brainer, right?

Also, I know some couples who really don’t share this info with each other. That’s a warning sign and y’all should work that out.

So, know how frequently you get paid and how much.

Take into account any other income you receive and what you will use it for. Alimony, child support, investment dividends, tax returns, affiliate income, inheritance, etc. Don’t just blow that money. Have a plan for it.

I know not everyone has a set amount every pay period, with commissions or bonuses or hourly rates or whatnot…so you need to average that out to know what to expect. Then consider the lowest possibility and set your budget for that.

What are Your Bills?

Know what bills you have.

You should be organized with this, right?

We took the “no-paper option” so we get email notifications and most of our bills are automatically deducted from our accounts.

Bills are typically the ones that don’t change (or change very little) from month to month – like rent, insurance, car payments. Our utilities are in this category because they’re a set amount each month and we reconcile annually.

I also put any debt in this category. While ideally, credit cards shouldn’t be used at all or paid off monthly…we’re getting there. And I have set that payment high in order to pay it off sooner rather than later.

What are Your Expenses?

These are the extra and perhaps flexible bills each month.

Utilities often fall into this category.

Luxury items are in this category. Cable or satellite TV, Netflix, Internet, cell phones are things most people have and they sometimes fluctuate based on services used. Remember, these are not necessities. They should be the first to go during financial emergency.

Groceries and gas for vehicles. This is the most flexible area for us. I can cut costs on groceries with careful meal planning.

Our car and renter’s insurance fluctuates just a tiny bit each month, but I usually keep those items in my bills category.

We pay for music lessons for our kids.

My husband and son get their hair cut every 8 weeks or so. I cut my own hair so that’s not an expense for us.

Be honest with yourself about expenses.

Do you get your nails done weekly? Do you regularly go to the hair salon? Do you go shopping for clothes frequently? Do you need a latte fix every day?

Evaluate those expenses and put them in your budget. Consider what you might need to limit or cut out of your life to make it work.

What are Your Priorities?

Everyone has different priorities.

Some people are perfectly content to live on rice and beans and buy the latest and greatest newest technology every time a new model is released.

Others don’t have Internet or cell phones at all but have an extensive garden of fresh fruits and vegetables.

Collectors and hobbyists spend time and money on their interests.

Many want to be able to give generously.

Our priorities:

We like to travel and eat well. We’re investing for our children’s educations and our retirement. And books. Always, more books.

Because of our financial priorities, we live a little differently than a lot of people we know.

We don’t have a car payment right now. Our furniture is thrift store-yard sale chic.

We don’t go shopping for entertainment and we seldom eat out.

We opt out of ads online to limit temptation! Since we don’t have a TV, we don’t see many commercials or advertisements except on Internet sidebars and some online games or apps.

How we save money:

I try to use the library first – before purchasing books for personal use or our homeschool. Often the Kindle versions of books are cheaper than the paper copies.

The kids wear hand-me-downs from cousins, each other, thrift stores, and yard sales. I seldom buy anything new that isn’t on sale.

We don’t have huge birthdays, Christmas, Easter, or other celebrations. We prefer experiences.

Do the Math.

This is easy to create on paper or on the computer.

I list all our bills and income in a column on the left and amounts in the right column. I have a column for X when they’ve cleared our bank. I use an Excel spreadsheet that does the calculations for me. I have a sheet labeled for each month and a sheet for our debt so I can see our progress.

Below is an example of my current Excel budget book. It’s more like a spending plan.

I’ve rounded the numbers and used generic names for our accounts.

I realize not everyone is in a position to invest.

I want to show you the reality.

I am not trying to brag about our income.

It’s public information anyone can look up about military service members. It’s a fixed income.

Yes, we receive some amazing benefits for being a military family: housing and utilities allowances, commissary and AAFES shopping privileges, dental and medical services at the base clinic, tax-reduced (but rationed) gasoline purchases on base. My husband’s state of residence is Illinois, so we don’t pay state taxes as a military family.

The offset is being far from home and family, missing those important holidays and events. Also, deployments, TDYs, training events, and late night or weekend exercises can be difficult on families. PCS (moving) often eats up our savings and is always stressful in many ways.

We currently have about $2500 in our savings account.

I’m fortunate to be able to stay home to educate our four children. We’re grateful for the opportunities military life offers us.

You can see we’re aggressively paying down our debt while not starving or eliminating our priority to travel. We’re still working this out with baby steps. We also have a pin and chip travel credit card that we over-used. It’s not shown in my Excel spreadsheet. We plan to attack that after these debts are paid within the year. We’re using every bit of extra income on paying that travel card (tax return, monetary gifts, and an IRA dividend we receive every autumn). We don’t plan to continue using that credit card since our new bank cards have the pin and chip now!

My Excel budget spreadsheet is color-coded.

The blue is income.

The green are investments, with amounts that seldom change.

The red is debt.

The fields left white are the flexible expenses. These amounts fluctuate from month to month.

I’m sure you noticed some gaping holes in my budget plan?

We have a separate bank account for our local expenses. Our rent, cell phones, and Internet are auto-deducted from our local account. We have a certain amount auto-deposited each pay period into the local account to cover those expenses. We use anything left over in that account each month to pay that travel credit card. We are at the mercy of the exchange rate from USD to Euro. (I love the idea of a separate account for housing expenses and I will carry that idea over when we move back to the States!)

We also have an auto deduction going directly to our church.

I have a separate account for my blogging “business.” Honestly, I don’t even sorta break even. I pour way more into this enterprise than I make every month. Some days, that’s very frustrating.

What’s Your WHY?

This goes a bit beyond just priorities.

When you get discouraged, when the van breaks down and you use your travel fund to fix it, when your child asks if you can have a “real Christmas” and you feel guilty, what will you do?

Leave room for emergencies and pray about big purchases. Obviously, a working vehicle is necessary for getting to and from work to make the money. While we cringed to fork over that $300+ for the new alternator and valves, we did so knowing that it had to be done and our trip could either be postponed or we could be more frugal somewhere else.

We remind ourselves what the big picture is: planning for our futures, teaching our children values, and leaving a legacy for our kids.

Sure, we splurge sometimes on gelato, a cute new shirt or shoes in sale when needed, flowers for the garden or dining table for a special occasion, or that Kylo Ren lightsaber.

We try to make sure there’s room in the budget for fun or it becomes drudgery.

UPDATE 8/25/16: We have PAID OFF TWO accounts! Only 3 to go. We plan to have those paid by May!

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Update August 2017: Only 1 account left to go!

Resources:

• Debt-Proof Living: How to Get Out of Debt & Stay That Way by Mary Hunt
• 31 Days to Radically Reduce Your Expenses: Less Stress. More Savings by Kalyn Brooke
• Slaying the Debt Dragon: How One Family Conquered Their Money Monster and Found an Inspired Happily Ever After by Cherie Lowe
• 31 Days of Living Well and Spending Zero: Freeze Your Spending. Change Your Life. by Ruth Soukup
• Unstuffed: Decluttering Your Home, Mind, and Soul by Ruth Soukup
• Clutter Free: Quick and Easy Steps to Simplifying Your Space by Kathi Lipp
• The Spender’s Guide to Debt-Free Living: How a Spending Fast Helped Me Get from Broke to Badass in Record Time by Anna Newell Jones
• The Year without a Purchase: One Family’s Quest to Stop Shopping and Start Connecting by Scott Dannemiller
• The Year of Less: How I Stopped Shopping, Gave Away My Belongings, and Discovered Life is Worth More Than Anything You Can Buy in a Store by Cait Flanders
• Make Room for What You Love: Your Essential Guide to Organizing and Simplifying by Melissa Michaels

Do you have any budget tips to share?

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