The idea for this post was suggested to me by Bridgette, a reader of my blog. She asked how I got my family (especially the kids) on board with budgeting to pay down our debt; how we explained to them what it was all about; and how we decided how much allowance we should get.
First of all, the budget is still going really well! October wasthe worst our least productive month so far in how much we've been able to pay toward our debt, but that's because we incurred a lot of expenses we don't normally have: a down payment on Eli's orthodontics; Jerry's hospital bills from the ER visit; my physical therapy co-pays; and several other things. I wasn't even sure if we'd have any money left over at all!
(I have no photos for this post, so I'm just using what I can find--this is a picture of Eli with braces when he was three years old! He had a cross bite that caused him to choke on his food because he couldn't chew well, and the braces corrected it. He only had them for three months.)
We didn't overspend on anything this month except for those necessary extra expenses we incurred; so while our debt payment wasn't nearly as much as last month, we did manage to pay just over $600 onto the credit card.
So, our new debt balance is $4871.03.
I am pretty amazed that we managed that for October. Prior to our budget, we would have accumulated MORE debt last month. Jerry and I went on vacation, so not only was he not working (and not earning money), we were also spending money in Portland/Seattle.
Because we had each saved up our allowances to spend on vacation, we didn't have to charge things to the credit card. And we were very conscious of how much we spent, rather than "spending now and worrying about it later".
We don't have extra things written into our budget. Instead, we just use the extra money that we earn that we would normally pay toward our credit card debt. (Extra money is anything over $3300 for the month--see below for a quick explanation).
Our "zero sum" budget in a nutshell:
We start each month with the "bare bones" amount that we will need to cover all expenses for the month (all of our bills, food, gas, regular medical co-pays, and allowances). Our "bare bones" total is $3300--maybe next week I'll break it all down into specifics. So, we start each month with $3300, knowing that we have all we need for the month.
Each paycheck that we earn during the month gets set aside for the following month--so we aren't spending this month's earnings on this month's bills. We are using last month's earnings to pay for this month's bills. We are always one month ahead.
Once we earn the $3300 that we'll need for the following month, anything we earn on top of that goes toward the credit card debt. For example, if we were to earn $5000 this month, then we would set aside $3300 for next month; and we would take that extra $1700 and pay it onto our credit card debt.
So, what I was saying before is that when we have extra expenses (like Eli's down payment for orthodontics), we pay for it with the extra money that would normally get paid onto our debt. It just means that we'll have less left over at the end of the month.
I'm actually really happy with that--in the past, months like last month would have accumulated quite a bit more debt (especially considering our vacation). It's kind of unbelievable to me that we actually had money left over!
Finally, I will get on with the topic that Bridgette asked about--how I got the family on board with living on a budget.
This part was actually really easy. I've come up with budget plans before--actually, pretty much every time I've had a hypomanic episode, I get a little crazy with the budget planning. I get very excited and calculate all the numbers, then plan it all out really well. I get the family on board with it, but then I've never followed through. (Again, how did I never recognize these symptoms of bipolar? Haha!)
So, coming up with the plan itself was nothing new to my family (especially Jerry). He is used to seeing me getting crazy-excited about budgeting and paying off our debt; and then just days later, coming home from work to see me starting a project that we don't have the money for. He always laughed and found it endearing. Poor guy.
There was a rather big difference this time, though (aside from the fact that I am on medication to hopefully prevent me from getting hypomanic): we used a different type of budgeting plan. It's called "zero-sum" budgeting, which is what I explained briefly above. (Next week, if it interests anyone, I will write a very detailed example of one of our months to explain better.)
Anyway, the zero-sum budget was perfect for what we needed. Jerry's paychecks vary greatly from week to week, and I only get paid once a month (my checks can vary quite a bit as well). So, working with a set amount of money for an entire month was just what we needed; and since we didn't know how much we'd earn that month, using the previous month's earnings made perfect sense!
Once I figured out how that would work out, I was super excited--crazy excited, really, but in a non-crazy way (hahaha). Thankfully, my mood was stable and I was thinking with a level head. I explained to Jerry exactly how the budget worked, and he was impressed with how much sense it made.
I had already calculated the numbers--our "bare bones" amount per month, our average income per month, our debt total, and how long it would take us to pay off our debt if we earned X amount of money each month. He couldn't believe how quickly we could be debt free if we stuck to the plan.
I also went a step further and calculated how long it would take to pay off not only our credit card debt, but also our car and house. As of this month, if we stick to our budget, we will have all of it paid off in 35 months. Less than three years!
When I told Jerry, he instantly wanted to pick up as much overtime at work as possible. He was super excited about getting our house paid off. It took no convincing for him to get on board with the budget, because the thought of paying off our credit cards, car, and house while our kids are in high school was mind-blowing to us.
When we told the kids about it, they were actually really excited about the budget, too. We were honest with them about the debt--I want them to know about debt so they can avoid it when they are older!
About the budget, we told them that instead of us paying for things they want, we were going to give them an allowance, and they would have to use their allowances to buy the things they want. We said we would still buy the necessities, but they would not be allowed to ask us for things that they don't need--instead, they would have to save their allowances for it. They loved the idea of having their own money to spend however they want!
There were a few key factors that I think have makes this budget pretty painless for all of us:
1) We kept Netflix and Hulu in the budget. They aren't necessary by any means, but we don't have cable and there are a few shows we like to watch together as a family. If we eliminated all of the fun from our budget, we wouldn't last long. So, it's worth the $18 per month for the two apps.
2) We budget money for "allowance" (cash for each family member to use on anything we want that isn't in our budget). Without this, there is NO way that we would have stuck to our budget this long!
Jerry usually buys his "fancy" beer with his, and I saved almost all of mine for the first few months to use as spending money in Portland. However, since I'm having a hypomanic episode right now--hopefully not for long, because I increased the dose of my meds today--I've spent almost all of the money I had saved up (I mostly bought clothes at Salvation Army). Next time I start to get hypomanic symptoms, I'm going to give Jerry my money to hold on to.)
Anyway, I think the allowance is the most crucial part of sticking to our budget. None of us would be on board without it.
3) I also budgeted a "family fun" amount ($100) to do something as a family each month--going out to eat, to the movies, bowling, getting ice cream, etc. This gives us something to look forward to doing together; and, because it's in the budget, we actually set aside the quality time together each month.
Bridgette also asked how we decided how much to budget for allowance. At first, we planned on a weekly allowance, and we thought $10 per week was good for the kids. However, since everything else was monthly in our budget plan, we switched it over to a monthly allowance as well. Jerry and I each get $100 on the first of the month, and the kids each get $40.
The kids aren't old enough to drive yet, so they aren't going out with friends all the time (which keeps them from needing more money). Noah does go to the mall or movies with friends once in a while, but his allowance is enough to cover that. (Now he is more careful about how he spends his money--he's learned just how expensive the popcorn is at the movies!)
Those amounts seem to work well for us. It has certainly made us think before we buy things! I was so used to just throwing things in the cart or grabbing last-minute stuff I didn't need. Or when the kids were with me at the store, they would ask for things and I didn't give much thought to it before buying it. Now that we are using our own money for the things we want, we give a lot of thought to whether we REALLY want it. It's turned into a nice habit!
First of all, the budget is still going really well! October was
(I have no photos for this post, so I'm just using what I can find--this is a picture of Eli with braces when he was three years old! He had a cross bite that caused him to choke on his food because he couldn't chew well, and the braces corrected it. He only had them for three months.)
We didn't overspend on anything this month except for those necessary extra expenses we incurred; so while our debt payment wasn't nearly as much as last month, we did manage to pay just over $600 onto the credit card.
So, our new debt balance is $4871.03.
I am pretty amazed that we managed that for October. Prior to our budget, we would have accumulated MORE debt last month. Jerry and I went on vacation, so not only was he not working (and not earning money), we were also spending money in Portland/Seattle.
Because we had each saved up our allowances to spend on vacation, we didn't have to charge things to the credit card. And we were very conscious of how much we spent, rather than "spending now and worrying about it later".
We don't have extra things written into our budget. Instead, we just use the extra money that we earn that we would normally pay toward our credit card debt. (Extra money is anything over $3300 for the month--see below for a quick explanation).
Our "zero sum" budget in a nutshell:
We start each month with the "bare bones" amount that we will need to cover all expenses for the month (all of our bills, food, gas, regular medical co-pays, and allowances). Our "bare bones" total is $3300--maybe next week I'll break it all down into specifics. So, we start each month with $3300, knowing that we have all we need for the month.
Each paycheck that we earn during the month gets set aside for the following month--so we aren't spending this month's earnings on this month's bills. We are using last month's earnings to pay for this month's bills. We are always one month ahead.
Once we earn the $3300 that we'll need for the following month, anything we earn on top of that goes toward the credit card debt. For example, if we were to earn $5000 this month, then we would set aside $3300 for next month; and we would take that extra $1700 and pay it onto our credit card debt.
So, what I was saying before is that when we have extra expenses (like Eli's down payment for orthodontics), we pay for it with the extra money that would normally get paid onto our debt. It just means that we'll have less left over at the end of the month.
I'm actually really happy with that--in the past, months like last month would have accumulated quite a bit more debt (especially considering our vacation). It's kind of unbelievable to me that we actually had money left over!
Finally, I will get on with the topic that Bridgette asked about--how I got the family on board with living on a budget.
This part was actually really easy. I've come up with budget plans before--actually, pretty much every time I've had a hypomanic episode, I get a little crazy with the budget planning. I get very excited and calculate all the numbers, then plan it all out really well. I get the family on board with it, but then I've never followed through. (Again, how did I never recognize these symptoms of bipolar? Haha!)
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| YAY MATH!! |
So, coming up with the plan itself was nothing new to my family (especially Jerry). He is used to seeing me getting crazy-excited about budgeting and paying off our debt; and then just days later, coming home from work to see me starting a project that we don't have the money for. He always laughed and found it endearing. Poor guy.
There was a rather big difference this time, though (aside from the fact that I am on medication to hopefully prevent me from getting hypomanic): we used a different type of budgeting plan. It's called "zero-sum" budgeting, which is what I explained briefly above. (Next week, if it interests anyone, I will write a very detailed example of one of our months to explain better.)
Anyway, the zero-sum budget was perfect for what we needed. Jerry's paychecks vary greatly from week to week, and I only get paid once a month (my checks can vary quite a bit as well). So, working with a set amount of money for an entire month was just what we needed; and since we didn't know how much we'd earn that month, using the previous month's earnings made perfect sense!
Once I figured out how that would work out, I was super excited--crazy excited, really, but in a non-crazy way (hahaha). Thankfully, my mood was stable and I was thinking with a level head. I explained to Jerry exactly how the budget worked, and he was impressed with how much sense it made.
I had already calculated the numbers--our "bare bones" amount per month, our average income per month, our debt total, and how long it would take us to pay off our debt if we earned X amount of money each month. He couldn't believe how quickly we could be debt free if we stuck to the plan.
I also went a step further and calculated how long it would take to pay off not only our credit card debt, but also our car and house. As of this month, if we stick to our budget, we will have all of it paid off in 35 months. Less than three years!
When I told Jerry, he instantly wanted to pick up as much overtime at work as possible. He was super excited about getting our house paid off. It took no convincing for him to get on board with the budget, because the thought of paying off our credit cards, car, and house while our kids are in high school was mind-blowing to us.
When we told the kids about it, they were actually really excited about the budget, too. We were honest with them about the debt--I want them to know about debt so they can avoid it when they are older!
About the budget, we told them that instead of us paying for things they want, we were going to give them an allowance, and they would have to use their allowances to buy the things they want. We said we would still buy the necessities, but they would not be allowed to ask us for things that they don't need--instead, they would have to save their allowances for it. They loved the idea of having their own money to spend however they want!
There were a few key factors that I think have makes this budget pretty painless for all of us:
1) We kept Netflix and Hulu in the budget. They aren't necessary by any means, but we don't have cable and there are a few shows we like to watch together as a family. If we eliminated all of the fun from our budget, we wouldn't last long. So, it's worth the $18 per month for the two apps.
2) We budget money for "allowance" (cash for each family member to use on anything we want that isn't in our budget). Without this, there is NO way that we would have stuck to our budget this long!
Jerry usually buys his "fancy" beer with his, and I saved almost all of mine for the first few months to use as spending money in Portland. However, since I'm having a hypomanic episode right now--hopefully not for long, because I increased the dose of my meds today--I've spent almost all of the money I had saved up (I mostly bought clothes at Salvation Army). Next time I start to get hypomanic symptoms, I'm going to give Jerry my money to hold on to.)
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| Jerry and his fancy beer |
Anyway, I think the allowance is the most crucial part of sticking to our budget. None of us would be on board without it.
3) I also budgeted a "family fun" amount ($100) to do something as a family each month--going out to eat, to the movies, bowling, getting ice cream, etc. This gives us something to look forward to doing together; and, because it's in the budget, we actually set aside the quality time together each month.
Bridgette also asked how we decided how much to budget for allowance. At first, we planned on a weekly allowance, and we thought $10 per week was good for the kids. However, since everything else was monthly in our budget plan, we switched it over to a monthly allowance as well. Jerry and I each get $100 on the first of the month, and the kids each get $40.
The kids aren't old enough to drive yet, so they aren't going out with friends all the time (which keeps them from needing more money). Noah does go to the mall or movies with friends once in a while, but his allowance is enough to cover that. (Now he is more careful about how he spends his money--he's learned just how expensive the popcorn is at the movies!)
Those amounts seem to work well for us. It has certainly made us think before we buy things! I was so used to just throwing things in the cart or grabbing last-minute stuff I didn't need. Or when the kids were with me at the store, they would ask for things and I didn't give much thought to it before buying it. Now that we are using our own money for the things we want, we give a lot of thought to whether we REALLY want it. It's turned into a nice habit!




































