In the spirit of transparency and because the State of the Union address is coming up, I thought I’d share our own State of the Household.
If you read my recent post you’ll know I decided to start off the new year with a fresh start. Well, this turned out to not just be a budget reset but also some credit card balance transfers to help consolidate our debt into a more manageable chunk.
Ugh, Credit Card Debt
Currently, our debt sits at just over $16,000, which freaks me out. Just a few months ago that sat at around $3,000.
My gut reaction is “What just happened?!” But if I’m honest with myself it’s a combination of poor planning, poor timing, and bad decision making.
So being the eternal optimist I am, I’m choosing to look at this as a challenge and an opportunity to re-evaluate how we approach finances in our family.
Our Family’s Fiscal Challenges
Mr. Go From Broke
Mr. GFB isn’t a big spender and can easily do without in order to save, but he’s also budget averse and seems to zone-out the minute I bring up finances. So step one in this adventure has been to gently ease him in by asking him for input into our budgeting priorities.
His challenge has been to let me know when he wants or needs me to budget toward something. I asked that he refrain from spending outside of his fun money category without letting me know. He’s never caused us to overspend by much, but having to WAM* for overspending is always a stress point for me.
I’m happy to report one month into the new year he’s been prioritizing his spending and giving me fair warning for any extra expenses. He recently chose to not eat out with co-workers after exhausting his fun money. His reasoning wasn’t quite the prioritization I’d use (he didn’t want to “risk facing my wrath” as he put it), but it’s a start.
Little Go From Broke
We decided to introduce our son to budgeting by establishing a combination allowance/chore chart. He’s had a chore chart consisting of a variety of tasks for which he gets paid, but he has a habit of not “working” if he’s not saving for something specific.
In order to give him something to learn with, we introduced a base allowance he gets in addition to whatever he earns. He’s also set up his very own budget in YNAB. He’s planned his spending categories (mostly video games) and even included some savings goals for future expenses (birthdays, Christmas, Valentine’s) so he can plan ahead.
Most exciting is, in spite of his desire for a multitude of games, he’s chosen to put the bulk of his money into savings categories because he wants to buy his best friend a gift for Valentine’s Day.
Mrs. Go From Broke, aka: Budget Happy Mom
On my part, I’ve been focusing on checking our category balances before making purchases. When I look back at my years of unsuccessful budgeting, I think this is where I faltered the most. I was always overspending figuring the next paycheck would cover it. I would just move money around to different categories when we got paid again.
I was basically embracing the idea of rolling with the punches but didn’t realize I was only punching myself in the face.
This month has been a game changer for me. At this point, I’m thrilled to say all my categories are green (no overspending) and any WAMing was done intentionally and in advance of spending.
For example, Mr. GFB had a special circumstance that required him to eat out at work for a week. He told me in advance and we made the decision to move money from the Dining Out and Entertainment categories to cover the expense. It meant he had to choose how much to spend and manage it to last, as well as give up any pizza weekend or movies this month.
But we did it! We pre-WAMed it, he didn’t overspend, we didn’t go out and I’m so excited I’m not sitting here stressed and trying to figure out how to cover it without tapping into our savings goals.
Looking ahead to February, I want to continue with what I have been doing, but also challenge us to save up the equivalent of a full paycheck. We’re going to all need to really focus on our spending to get there so part of my strategy is to establish a family budget time to go over our plan and have everyone on board.
It may end up taking more than just February to get there, but if we stay diligent and keep focused on why we’re budgeting in the first place, I think we can make it happen.
Our State of the Household
As part of my desire for full disclosure, I’ve set up a Personal Capital account to track our net worth. This includes our assets and liabilities. I’ve not included Mr. GFB’s retirement since it’s automatic and comes out before we get paid. I want to really focus on the things we have more control over.
I may add it in later, but we’ve been pretty aggressive with what we put in there so it makes me feel a sense of false security when I see the balance. I know regardless of how well that account is doing, until we are more successful in deliberately spending and saving, it won’t last us through retirement anyway. Maybe once we’re debt free I’ll add it in to have the full picture.
So as of January 31, 2018 here’s where we stand:
If you’re inspired or just curious to know where you stand, I encourage you to sign up for a Personal Capital account as well. I haven’t taken a deep dive into all the data they offer, but at a glance I think it’s a good tool to track where you are and eventually look back to see how far you’ve come.
*That’s YNAB groupie speak for whack-a-mole, the process of moving money from one category to cover spending in another.