dansamy Posted October 22, 2012 Share Posted October 22, 2012 I suppose this would count as a spin-off from that thread. I commented on my own family's situation, which isn't great but it's not bad. (It's not great in that we're not homeowners even though we have a good income.) How do families adjust as their income declines or their obligations increase? Do "normal" people have 3-6 months of an emergency fund? What is "normal" anyway? I just downloaded a spreadsheet linked in another thread and built a debt snowball which revealed 2 years to pay off our unsecured revolving debt. (I didn't add cars or property into that equation.) While doing that, I also updated my family budget spreadsheet to include the snowball payment and increase our grocery budget. (I have been grossly under-reporting our food expenditures. The new figure is still less than what we have spent recently, but should be reasonable with more at home eating.) I also recalculated our income based on the average take-home pay over the course of the YTD. (Yes, I have been busy in the last few minutes!) While our amount of debt sort of surprised me, what shocked me even more was our average take-home YTD was higher than I thought it had been. Where does it all go? :001_huh: :confused1: I'm pretty sure it is all going here, there and yonder without much direction. One of my homeschool mom friends teaches Dave Ramsey's FPU. I think I need to take it. :crying: Anyway, what do other families do when their circumstances change? I know my sister has mentioned the only place they have to cut their budget is the groceries, and they already eat way cheaper than we do. Quote Link to comment Share on other sites More sharing options...
Erica in OR Posted October 22, 2012 Share Posted October 22, 2012 We did FPU at our church and one of the best tools we took away from it was the zero-based budget process. It helped us figure out before the month started where we needed/wanted the money to go. You know what you're going to earn and you earmark every penny of it (hence the zero-based term) for various categories (clothing, shelter, groceries, eating out, health, insurance, auto, etc., plus a small "blow" category for unexpected stuff or so you can let loose a little). That helped us to not get to the end of the month or year and not know where it all went. We planned ahead of time where it should go. We learned as we went (in our 10th month of doing the budget), with adjustments here and there. It sounds as though they're revamping FPU for a slightly shorter time period, with more focus on the budgeting aspects, so it could be a very useful thing to look into. I think your title says it all—if your circumstances change, both budgets and expectations need to change in response. We're doing our best to spend only the money that we're actually earning and to approximately know where it's going, before we even spend it. If there's something that you'd like to spend money on for a month, for us, it involves looking through the budget and deciding which category will I cut the money from, or what other source of income will provide that money. When it comes to spending the money, that's what's available for a category. Once the grocery money envelope is empty for the month, we make do with what's in the pantry and the garden, and decide next month if we're still happy with what the budgeted amount is for that category. Feeling a bit rambly, so will just say best wishes in your financial journey... Erica in OR Quote Link to comment Share on other sites More sharing options...
Lily_Grace Posted October 22, 2012 Share Posted October 22, 2012 Dh and I keep a zeroed out budget. Each month resources get allocated different ways. Like when we moved, our food bill more than doubled, we gained a car payment, credit card debt, our insurance tripled, and our savings went to zero. It was rough. We reworked the budget with only the necessities until there were dimes left over that could be applied to a little bit of frivolous things (like renting a movie instead of borrowing from the library). Our budget has always been along the Dave Ramsey plan: 1000 in savings, then tackle what we could of the debt. Finish the debt, then feed the savings. Slowly add in personal allowance so we didn't feel strangled as we tried to get a handle on things. Quote Link to comment Share on other sites More sharing options...
Renee in NC Posted October 22, 2012 Share Posted October 22, 2012 I allocate every paycheck before we get it. I have a spreadsheet with the dates across the top and the categories down the side. I don't always follow it (money gets moved around after we get it), but it is a good framework. I also have 4 bank accounts. 1 for my dh (fuel and his money), 1 for me (my money, gas, groceries, etc.), 1 for bills, and the last is for "sinking funds" Quote Link to comment Share on other sites More sharing options...
DawnM Posted October 22, 2012 Share Posted October 22, 2012 DH and I have taught Crown Financial for years. We like it better than Dave Ramsey, but that is somewhat personal preference as their approach is similar. We use YNAB for our budget and often "move money around a bit" to accommodate various expenses. But I write EVERY purchase down, including yard sales, I even have an allowance for yard sale-ing! I keep ING accounts.....it is so easy.....I just open up an ING account and have money transferred automatically when the paycheck comes in. In my ING account I have a Christmas fund, a Philmont account, a Disney trip account, Curriculum account and a car savings fund. Since joining Crown, here are some things that have changed for us (over a matter of 5 years' time) 1. We have an emergency fund 2. We have sinking funds 3. We have a detailed budget 4. We have gone from a 30 year mortgage to a 15 The other things I have done in the past and am actually doing again is take a close look at all of our bills and see where I can cut the budget again. 1. Use it up 2. Make do without 3. Repair instead of replace 4. Sell 5. Buy used if possible 6. Save and pay cash if possible 7. Cut it out or cut it down if possible (we cut cable TV completely, we cut our contracted cell phone out completely and went to pre-paid. Dh still has a contract but it is paid through work. I have Straight Talk.) Quote Link to comment Share on other sites More sharing options...
Night Elf Posted October 22, 2012 Share Posted October 22, 2012 How do families adjust as their income declines or their obligations increase? Do "normal" people have 3-6 months of an emergency fund? What is "normal" anyway? We don't do strict budgeting as we know where most of our spending is going. We're trying to control it but so much happened this past calendar year, house stuff, dental and medical, that we dipped into savings and we're still cutting corners. We currently have only one month of expenses in savings and saving isn't a high priority. We want out from this debt flood, but our long range projection, provided nothing else happens (haha) is the end of 2013. Quote Link to comment Share on other sites More sharing options...
Soror Posted October 22, 2012 Share Posted October 22, 2012 We do budget and adjust as it is needed. Dh had several months last year of less than usual income due to reduced hrs, so we cut everything. Now he is working more than usual so we are splurging some here and there. We have kept our monthly bills, very low though, as I don't like having many and wanting to make sure we could survive ok if dh lost his job and ended up in a much lower paying job. Quote Link to comment Share on other sites More sharing options...
BlsdMama Posted October 22, 2012 Share Posted October 22, 2012 I don't know. There, I admit it. I'm doing the same thing you are though. I have a set budget for groceries and I blow it by approximately $400-$500 per month. On paper we have a huge amount of cushion. In real life, eh, not so much. I suspect I am MORE frustrated with myself every month for not sticking to the budget than I am if I just held solid. Yes, I'd go without some enjoyable things, but I wouldn't be so disappointed in myself for being a weenie. Think of it that way I think. I think the real clue would be to truly track everything in HANDWRITING on a sheet on your fridge. Then you can't just balance out your "uh-oh" slip-ups for the month and go on. There are things I put under groceries that ought not be... That $20 or $40 you get out extra in cash at the grocery store? That's a no no. The coffee splurge? That's not actually groceries even if it is at Safeway. That goes under Dining Out. Quote Link to comment Share on other sites More sharing options...
DawnM Posted October 22, 2012 Share Posted October 22, 2012 I budget my groceries a bit high these days. Now, my grocery budget DOES include toiletries and cleaners, so it isn't just food, BUT, I find that if I budget a bit high, then if there is something I really want, I can cut back on that grocery bill to save for it. This only works IF you have a strict budget in the first place AND if you have some cushion of some sort. Dawn I don't know. There, I admit it. I'm doing the same thing you are though. I have a set budget for groceries and I blow it by approximately $400-$500 per month. On paper we have a huge amount of cushion. In real life, eh, not so much. I suspect I am MORE frustrated with myself every month for not sticking to the budget than I am if I just held solid. Yes, I'd go without some enjoyable things, but I wouldn't be so disappointed in myself for being a weenie. Think of it that way I think. I think the real clue would be to truly track everything in HANDWRITING on a sheet on your fridge. Then you can't just balance out your "uh-oh" slip-ups for the month and go on. There are things I put under groceries that ought not be... That $20 or $40 you get out extra in cash at the grocery store? That's a no no. The coffee splurge? That's not actually groceries even if it is at Safeway. That goes under Dining Out. Quote Link to comment Share on other sites More sharing options...
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