Friday, July 20, 2012

Financial Friday: Intro to the dreaded B word

I remember when Pete and I took Financial Peace University, we took it with another couple. Vanessa and Pete are very similar in that they save their money. Stephen and I, on the other hand, like shiny things. Shiny things distract us from saving. Money burns holes in our pockets. Budgets were evil things that made us not have fun anymore and we hated the word. But if you ask us now, we're kinda fond of our budgets!

Why are budgets important? A budget is a great thing to have because it helps you tell your money what to do, rather than your money tell you what to do. It helps keep your money in line, and forces you to prioritize where the money needs to go.

What isn't a budget? When I was talking to Pete about this post, he mentioned that I should talk about this. Stephen and I thought that budgets were really restrictive and controlling, but really they're not. Yes, they do keep you in line with your spending, but they give you freedom to spend as well. And if you use them right, you'll have extra money at the end of the month for other things like saving, paying off your debt and new shoes!

I mentioned before that when we started FPU, we were so proud of ourselves that we knew how to budget. Some months it worked, others not so much. So imagine our shock when we discover that we had no idea how to budget. What we did was write down every penny we spent over the month into categories (food, utilities, clothing, etc.). At the end of the month, we checked that against what money we had brought in. Most of the time it balanced out, but there were some months where we'd be off by a few hundred dollars...and not in a good way. Fortunately we never spent more money than what was in our account, but there were times I couldn't pay off the entire credit card bill (something we strove to do every month).

We were doing part of it right: keeping track of every penny we spent. But the part we were doing wrong was checking at the end of the month. In order for you to be in control of your money, the key is to write down how much you plan to spend in each category before the month starts. Yes, it's hard the first few times when you're trying to figure out how much to put in each category, and some months are going to be off more than others. You'll have to make hard choices (like seeing deck furniture you want for $75, marked down from $300...but you have to pass on it knowing that there really isn't money in the budget available for it...). But you'll be telling your money where to go, and life will be less stressful in the long run.

Next week I'll go more in depth about starting your first budget! The first month's budget is very easy, so don't panic!

This week's money savings tips are in regard to those of us who have swimming pools. Pools are a wonderful thing to have during a hot summer, but they can be super expensive!!!

Buy supplies in bulk. A couple years ago we bought the cholrine pucks in a huge bucket; if we bought them in bulk, it worked out that each puck was about half the cost of buying little packages. We still have a lot left, and they're still good!

Check the ingredient list! We had to just put a bunch of chemicals in our pool as the levels were off. There's a pH buffer powdered product that comes in a big bag; the bag was over $20 at the pool store. My chemist husband looked at the ingredients and noticed that all it was was baking soda. I just went to BJ's yesterday, bought a bag of baking soda that was bigger than the bag of pH buffer, and paid less than $7 for it. Score!

Thanks to reader Jennie; last week she mentioned a way she saves on money for laundry: she cuts her dryer sheets in half! I tried this tip all week, and I didn't even notice a difference in how my laundry felt and it still smelled super fresh.

Do you have a budget that works? How do you save money if you have a pool?


  1. We started off married life doing a budget like Dave says. However, it got too hard to keep track of. For ex, at Super WalMart we got 1 receipt. Then we would have to sit down and sort out what went with food, household, clothing, etc. Any advice?

    1. Great question, Corrie! We had this problem as well. What we ended up doing was expanding some of our categories: the food category had food and items like toilet paper, paper towels, shampoo, cleaning supplies, etc. in it. I know Dave had them separated into food and personal items, but that didn't work for us. It's all about tweaking the categories so it works for you. Some times I will have to sit down and sort it all out on a receipt (like if I go to BJ's), but I try to do that as soon as possible because the receipt descriptions are sometimes wonky and I never remember what's what! I'll make sure to bring this question up when I talk more about setting up budgets to see what others do; I feel like there should be an easier way to do it, other than pay for food and other items separately!