I finally figured out our financial issue

[Janeway]

I know we are spending more than we should. And it is making me nervous. But I cannot figure out why we always seem to have the money when we did not before. It doesn't seem right. Then, we started talking about maybe needing a new car and I was thinking we don't have money in the budget, and that is when it hit me! We paid off my husband's car a few years ago and my car last year. Instead of just saving the money we are saving, we have ended up spending the savings.

 

We are not broke. We have an emergency fund for savings. I just feel awful when I say no to the kids for things when I know we have the money. But, if I take the point of view that we need to save what would be a car payment each month, in addition to what we save otherwise, then we do not have the money. Now to get the courage to say no. I feel bad over so much.

 

This child wants gymnastics...no...that child wants dance but has preschool, this child wants another instrument and that child wants ....and it goes on....

 

I was so excited to get done paying off the cars and be able to save more money. Instead, the savings gets spent on more things. This is about being disciplined. Both cars have over 100,000 miles on them. My own car has 150,000 miles on it and I do not know how many miles are on my husband's. They will need to be replaced eventually and it would be nice to have the money saved to pay for the next car instead of financing the next car. I just feel guilty. I need to lose the guilt and be strong.

 

Any encouraging words? Helpful hints? Feedback on what others who are trying to live debt free do in this case?

[StephanieZ]

All I can say is that IME kids get more expensive as they get older.

 

The only way we've survived it is that we had our babies when we were relatively poor (grad students, newly employed), so over the years, our earning power has gone up along with the expenses. If our earning power hadn't gone up, we'd have had to say "sorry, but no" many, many, many times. We still say that, of course, but if we didn't make more than we did when the kids were little, we'd be in trouble. 

 

(((hugs)))

 

 

[Scarlett]

I know we are spending more than we should. And it is making me nervous. But I cannot figure out why we always seem to have the money when we did not before. It doesn't seem right. Then, we started talking about maybe needing a new car and I was thinking we don't have money in the budget, and that is when it hit me! We paid off my husband's car a few years ago and my car last year. Instead of just saving the money we are saving, we have ended up spending the savings.

 

We are not broke. We have an emergency fund for savings. I just feel awful when I say no to the kids for things when I know we have the money. But, if I take the point of view that we need to save what would be a car payment each month, in addition to what we save otherwise, then we do not have the money. Now to get the courage to say no. I feel bad over so much.

 

This child wants gymnastics...no...that child wants dance but has preschool, this child wants another instrument and that child wants ....and it goes on....

 

I was so excited to get done paying off the cars and be able to save more money. Instead, the savings gets spent on more things. This is about being disciplined. Both cars have over 100,000 miles on them. My own car has 150,000 miles on it and I do not know how many miles are on my husband's. They will need to be replaced eventually and it would be nice to have the money saved to pay for the next car instead of financing the next car. I just feel guilty. I need to lose the guilt and be strong.

 

Any encouraging words? Helpful hints? Feedback on what others who are trying to live debt free do in this case?

Balance. Save some of what was the car payment and spend some.

[SparklyUnicorn]

All I can say is that IME kids get more expensive as they get older.

 

 

Yes they do..yes they do.  Even stuff like birthdays or xmas.  Now I know I don't HAVE to buy them anything for their birthday or xmas, but I do and want to.  It's just as a little kid they are quite happy with a gift you spent $10 on.  Not so much when they get older.

 

Clothing costs more.  Extracurricular activities cost more.  You spend more in gas carting them around.  Their school books cost more. 

 

I guess the compromise OP is to save some small amount that you won't notice too much.  Like 100 bucks a month.  That's enough to add up to something, but not enough for you to notice. 

 

It's typical though.  People who make more often just spend more.  Me included! 

[SparklyUnicorn]

Oh and food.  It's obscene what I've seen my 14 year old eat sometimes.  It defies logic.  How does a 100 pound person consume 500 pounds of food? LOL 

[Scarlett]

Oh and food. It's obscene what I've seen my 14 year old eat sometimes. It defies logic. How does a 100 pound person consume 500 pounds of food? LOL

Yep. My 6'3 165 pound teen eats a lot. And I find myself spending more money to have some convenience foods for when I am. It here to cook.

[SparklyUnicorn]

Yep. My 6'3 165 pound teen eats a lot. And I find myself spending more money to have some convenience foods for when I am. It here to cook.

 

Mine is only 5ft 2 or 3 (haven't measured him in awhile).  So I can't say he is storing it in his hollow tall body.  LOL

 

And yes to the convenience foods because I can't keep up with it (not to mention his is insanely picky). 

[SKL]

Give yourself an allowance?  It makes sense to allow yourself to enjoy life a little while you save up your emergency fund / nest egg.  Sounds like you have the ability to do both at the same time.

[JudoMom]

Oh and food. It's obscene what I've seen my 14 year old eat sometimes. It defies logic. How does a 100 pound person consume 500 pounds of food? LOL

Obscene is the right word. Ds15 just started weight training for football and I am scared.

[creekland]

IAny encouraging words? Helpful hints? Feedback on what others who are trying to live debt free do in this case?

 

To keep things like this more inexpensive, we took up geocaching and hiking.  There's very little investment involved - and oodles of near-free entertainment we all loved.

 

Then at home we did more board games as a family.  We all loved this too.

 

My kids took up chess - great for their minds and less costly as a parent.  Middle son ended up winning our state scholastic championship in his division, so I sort of felt guilty that I didn't realize he was as good as he was and let him do more, but what we did was inexpensive.

 

Our choices helped us spend more when we wanted to and save more overall.  Then they had a bonus of bringing us closer as a family as we did all the hiking and board games together (well, the boys would play themselves too, but we had family nights when we'd all play).

 

Other than soccer (once per week up until 8th grade - club sport) and minor expenses with the above, mine didn't get other expensive classes or things growing up.  As adults today, they love that we spent family time together and traveled instead, so it turned out just fine IMO.

[luuknam]

If you save what would've been your car payments so you can replace your cars when you have to, then you can buy almost new cars with cash, and then save only a small part of what used to be your car payment because you'll have a long time to save up for the next cars from that point on.

 

Alternatively, if you don't save up to replace your cars, you'll end up with the same car payments again in the nearby future, so you'll have to say 'no' again then. So, 'no' now, and less 'no' in the future, or 'yes' now, and then 'no' again in the future.

 

It's easier to say 'no' to the kids and gradually, over time, have to say 'no' less often, than to say 'yes' now, and then have to retrain the kids into hearing 'no' again later. For example, if you do gymnastics now with the money you're not spending on a car payment, will you have money for gymnastics when you need to get another car with a car payment, or will the gymnastics need to be dropped? It's much less painful for the kid to never start gymnastics than to start it and then have to stop it later due to lack of money.

[OneStepAtATime]

If you are both on board, lay out exactly what the mandatory expenses are each month plus any quarterly or yearly costs.  Do hard numbers and where you have to estimate, then estimate 10% higher (more if you know you are bad at estimating).  Then add in a small amount you need to reserve each month for emergencies (NOT for buying the car but emergencies).  Then divide all that by 12.  See how much is left each month for saving and for spending.  Set up your monthly budget based on those numbers and track every dime if you can.  Each time something comes up, ask if it is more important than saving for the car or providing extras for the kids/ you/your husband.  Involve the family in finding more cost effective ways to do things.  

 

For example, a close friend has a 14 year old daughter who loves dance.  When she was 12 she decided she wanted to do Aerial Silk gymnastics.  They not only could not afford the classes, there was no way to get her there since it was across town and both parents worked.  My friend (the dad) felt bad.  He told her that if she could find a place for those classes that cost less than $$$ amount of money and she could find a way to make transportation work they would find a way to pay for the classes.  He emphasized that they loved her and believed in her but the reality was that what she was proposing was not currently workable.  If she really felt strongly and was willing to put in the time and effort to come up with a better plan of action he was all ears.   She researched diligently and finally found classes that were closer and cheaper with a little dance group.  She also networked and found that another person in their neighborhood wanted to take those classes.  They were able to carpooling or ride the bus when absolutely necessary.  2 years later she just won her latest competition.  

 

:grouphug:  :grouphug:  :grouphug:   Budgeting can be exceedingly difficult. Good luck and best wishes.

 

 

[HomeAgain]

Some of what we've done to become more disciplined financially isn't hard, but it does take some conscious effort!

 

Like Creekland we do a lot of free.  I keep a calendar each month of all the events and things going on in the community that cost us nothing more than gas money - picnics, museums, concerts, classes, library events..the kids pick and choose what they want to do.

 

We also use a virtual envelope system.  It's a spreadsheet with debits for each category.  It is ALWAYS available to any member of the family who wants to look, and I sure as heck am open to suggestions!  My oldest gets a lump sum each month that is the average of what we would spend on school stuff, uniforms, events, etc.  His job is to manage that sum because I'm not going to hand over more.

 

I consciously keep tabs on my own spending habits.  I thought about going out today to browse the bookstore.  I don't need anything.  I don't even have a list of wants in mind...so..I'm going because I'm bored?  Yeah, I do the same with thrift stores.  I have to make a list and not bring home anything that is not on that list.  I have to find other things to do, too.  And ways to stay home more.  We have a giant tub of popcorn from splitting a 50lb bag with a friend - that plus a library-borrowed dvd means our Sunday evening entertainment is a grand total of $.40 for the family, popcorn, butter, and salt included. 

 

And I make sure to reframe my thoughts in a more positive way.  It's very easy to feel poor.  I don't want to.  Everyone, everywhere, has a finite amount of cash available.  Some just have more than others. ;)  But not everyone has a written down set of goals.  That's all our budget is.  I can stick to it and say, "I'm sorry, that's not in the budget this month.  Let's look at what is." or I can say "we can't afford it."  If I say it's not in the budget, that's me being disciplined and sticking to my goals.  If I say that we can't afford it, that's money controlling me.  I want to be in charge!

[SebastianCat]

Oh and food.  It's obscene what I've seen my 14 year old eat sometimes.  It defies logic.  How does a 100 pound person consume 500 pounds of food? LOL 

I hear you.  Both of my kids (2 years apart) are around 100 pounds and my almost-14-year-old consumes more than double what I eat.   

 

As for saving, have you considered setting up a bank account for the savings and having the money automatically transferred each month?   It's more difficult to spend when you have to transfer money back out of an account.

[tm919]

When we don't have a car payment, we budget like we do... we "pay" the payment to the account. With every car we get closer to being able to buy the next car outright (last one we only had a year of payments).

 

No ideas on the kids... it is CRAZY expensive. Both of my kids have activity budgets, but those budgets need to go up each year because I just don't see another way to make it work!! So far I've been doing their age * X number of dollars per month. So by the time they are 15 and 17, I'll need a second mortgage I guess.

[prairiewindmomma]

Why is saying no a problem for you?  

 

Saying no isn't a problem for me. The chances of my children growing up to have unlimited wealth are probably slim to none. They are going to have to learn to govern themselves and make choices about how to prioritize spending.  I think parents who buy their kids everything they want to a great disservice to their children. A good friend of mine has been buying her son $300 baseball bats and her dd full new wardrobes and sending her kids on all kinds of trips and cooking steak and shrimp regularly because it's their favorite.....and she wears a ratty bra with holes in it, wonders if she can make her credit card payment, and isn't putting hardly anything away into retirement.   

 

We played family budget one Monday night.  We gave our elementary school aged children a handful of Monopoly money, and asked them what kind of bills they would need to pay. We eventually got around to mortgage and utilities and food and so forth.  They were so shocked and saddened by how much went out for those things.  Then we talked about things that are nice to do, like saving money for retirement, saving money for a vacation, saving money for future bills, and so on.  They were left with a small bit of money at the end which was the "fun" money--what we might use to go out for dinner or take a day trip or whatever.  We talked about priorities, and spending family time together to make memories, and the things that were important to us.  For our teen, we've had more frank discussions about priorities and how paying outrageous amounts for medical (cancer, NICU bills, etc.) has meant that there is no college fund for him.  We welcomed his input on the family budget and we talked about possibilities for his future.  My point is that you have to take the taboo off of talking about money, and unwrap your emotions from it.

 

I think you would be wise to save for your next car.

[HS Mom in NC]

Some things that surprise people (they surprised us) are the cost of inflation, increased taxes and the rising cost of health insurance. When we weren't thinking about them and thinking about them changing over time, it did a number on our budget.

 

I know a couple of people whose mommies and daddies gave them everything they wanted because there was money to spend on it.  I can tell you they were some of the least happy people I ever met.

I don't want my children to equate stuff and activities with love and happiness.  I want them to enjoy some stuff and some activities, but love comes from relationships.  Happiness comes from inside, assuming someone isn't being oppressed or denied the essentials. I don't want to send them mixed signals  by saying so out loud and then living contrary to that.  There are wonderfully happy, joyful people living in very minimalist conditions (by choice and by circumstance) all over the world and throughout history.

My kids will want their father and I to live independently as long as possible more than they will want stuff and activities we can't afford now.  The ability to delay gratification will be something they'll cherish throughout their lives more than the non-essential stuff and activities we give them that we can't afford-and even a few we can afford, but we don't think are worth the time, money and/or energy. The emotional maturity that comes with being disappointed, processing it, and bouncing back from it is one of the most important parts of themselves. They may not know all that now, but that's why we're raising them and they aren't raising themselves.

We actually talk to our kids about our priorities and rank order them.  We get out a whiteboard, go over the budget and extras.  We put those in order from most to least important and explain that should things get tighter financially, which extras will go in which order. In our 20 years of parenting we've had more, then less, and now more income.  We had to stop piano lessons for kids #2 and #3 because we ran out of extra money.  They each had a sport too.  We explained we couldn't do both for each kid, so each kid had to choose one or the other.  They each chose their sport.  That's the real world.  Is it disappointing?  Yes.  Will they get over it?  Yes. They chose their highest priority and let the lesser priority go-that's just part of life and maturing.

[MomatHWTK]

We finally gave up and financed the last two vehicles- both needed within a year of one another. DH had been driving a 1982 pick-up prior to that. So, we got used but newer models, financed and are chunking away. DH has to work involuntary overtime quite a bit so we are committing to putting all that $ toward the cars and I started freelance writing too. 

 

It was a hard choice, but we had already tried repairing a vehicle- engine rebuild and it wasn't effective. At some point paying interest on a reliable vehicle purchase makes more sense than paying for ineffective repairs on a depreciating vehicle.

 

ETA: I don't invest in outside activities for the kids unless there is some underlying reason. If one of the kids was destined for a career in dance, I'd invest but not as a hobby. Not because doing so is "wrong" but it is just my nature. I do invest heavily in interest-areas. I probably spend as much on art supplies annually as others spend on dance classes, and we purchase a lot of computer/tech equipment and software for my geeky boys. 

 

I agree with others- the cost of basics has increased a great deal in the past 5-8 years. If you aren't seeing regular pay increases, money can get tight. Plus, teens and pre-teens are giant eating machines!  "What do we have to eat?" is a chant around here. LOL

Edited April 24, 2016 by MomatHWTK

[HS Mom in NC]

We buy our own health insurance because my husband is self employed and before he was self employed because the employees had the option of using the employer provided insurance or taking the money and purchasing our own.   We purchased our own then because we got a better deal than using the employer provided health insurance.  That being said, our cost for health insurance has tripled in the last 5 years and none of us has major, ongoing issues. It's crazy out of control.

[nd293]

Any encouraging words? Helpful hints? Feedback on what others who are trying to live debt free do in this case?

It sounds to me like you don't have an actual budget? Some years ago dh received a large salary increase, and 1 year later it occurred to me to ask myself where that extra money was. Uhhhh? We could account for only a fraction of it in specific assets or experiences. That's when I started categorising money properly. Now, when the monthly payment for dd's orthodontics ends, that money will be recategorised - some portion of the monthly amount might go into the miscellaneous fund which is ours to spend. Some might go to saving for next kid's braces. Or into the holiday fund. Wherever it goes, there will be a plan.

 

As for the guilt thing: I truly believe that saying no to kids over financial things is the greatest gifts I can give them. Wants and needs are not the same thing. All our wants do not have to be met. We need to learn to identify that feeling of discomfort we get when wants aren't met and realise that we don't have to act on it. Everything we choose represents an opportunity cost - and there's no such thing as a free lunch. These concepts form an ongoing conversation with the kids.

 

(I'll add that the salary increase decreased as the economy tightened but we'd made dramatic headway in our mortgage by then and had not 'acclimatised' to a lifestyle we could no longer sustain.)