Manage money

I used to complain that everyone I knew that was completely debt free had done it through an inheritance, or some other large lump sum payment. How do you get debt free by living paycheck to paycheck?

We have this problem. Our answer is that we are now setting some money aside from our paychecks every week. It's not much, but it's something. The "experts" say you should have six months of your living expenses in an emergency fund. When I reconsidered this, I realized that what was in my mind was six months of our income, not living expenses. I have adjusted this mentally to cover the monthly bills, and exclude groceries and gasoline. The reasoning is that it's very unlikely that we would both lose our jobs at the same time, and one income should be enough to cover the gasoline and groceries. (especially if we're only driving one car).

Mentally, this has been a great load of my mind, and seems much more possible.

Step 3 Teach Hubby to pay the bills

In my last post, I mentioned that my husband agreed to pay some of the bills so I didn't have to worry about them quite so much. It didn't even occur to me (DUH!) that he wouldn't know how to pay those bills. I did send him the link to pay the electric bill, and gave him the username and password to sign in. I forgot completely that the electric company's website can be difficult at best to navigate.

Note for the rest of the month: Hubby and I should actually sit down together and pay the bills, so he can learn how to pay them. We've been together a little over 6 years, and it's the first time that he's actually paid the bills. The last time we were doing the budget together, he was willing to sit down and do the budget with me, but it was still my responsibility to pay the bills. At that time, it didn't seem to be a big deal.

I guess I have started worrying that if something happened to me, he would be totally lost. I'm trying to fix that sooner rather than later. Part of living proactively, rather than reactively.

If you were to suddenly be not able to do the finances for your household, would your spouse be able to take over? Or, if you're not the one who handles the finances, would you be able to take over? A good thing to consider.

Second Step -- Getting Hubby on Board!

Budget date with hubby went really well. It brought up an entire dialogue about where we are versus where we'd like to be. I mentioned Venice, he mentioned buying an RV to travel the US. (OK, so we're not on the same page for what we want to do in retirement, but at least we've started that conversation)

We have a pretty good idea of where we are financially for the next 4 weeks at least. AND after all the necessities, we have a bit of money left over. I'm calling that our "crisis" money. When you have children and vehicles, something always comes up that needs money NOW. We have a small cushion for that.

The 4 week budget subtracts money for child support first, savings second. (Have I mentioned that one of the things that made me fall in love with my husband was that he feels true responsibility towards his children? The child support has always been his first financial priority)

Husband was extemely helpful in figuring out which bills need to be paid which week. (we are still living paycheck-to-paycheck). He even made a couple of really great suggestions and listened carefully to what I had to say.

Part of this budget date for me was coming to full disclosure. He and I have been together more than six years and have always had a joint checking. It's always been my "job" to keep tracking of the accounts. For the first time in our marriage, I gave him the username and password to the bank account online. He's always had access to the account, but no way to check the balance. Full disclosure = no more hiding shoe purchases.

First Steps

I just looked at my expenses versus income for April. Believe it or not, they are exactly the same! I guess this is not the month to attempt putting away extra money. Budget date with hubby in 5 days. Maybe this monthly "date" is not the most romantic thing in the world, but at least we'll have a small plan.

I still believe that the most important part of doing a "budget" is getting your better half involved right from the beginning. My hubby is ok with attempting to move from being a paycheck to paycheck family to being a financially comfortable family. Just, it's so hard when you have children who always seem to need something. Careful planning is generally the way to take care of those problems. For example, I know that within the next month we will need an exta $35 for graduation announcements. That means I will probably cut that amount out of my grocery budget this month. (We will not do without food, just some extras that are sometimes nice to have.)

I read a study that said a large percent of Americans are one major crisis away from homeless. Am I that close? Probably