Budgeting: Step 1

This weekend I did a TON of reading online about budgeting and living frugally. This is not a new area of research for me, but one that I have read about for quite some time now. This time I was lucky enough to stumble upon some new websites that were extremely helpful.

Some time after the birth of my child I realized that what I'd been doing wasn't exactly working. I never gave much thought to how my hard-earned money was being spent. I paid my half of the bills and had plenty left to do whatever I wanted (within reason). I had the opportunity to come to this realization much sooner than C's birth, but I was stubborn (stupid). The year before she was born, I lost my job. I hated my job, but it paid very well, so I was devastated. I knew the company was making a lot of cuts due to the state of the economy, and I knew I was one of the last ones hired in my division, but I had the mentality that "it can't happen to me." What a dumb way to think!!

I was so unprepared for unemployment. Thankfully, my husband had (has) a good-paying job, and his salary combined with my measly unemployment "paycheck" allowed us to be able to pay the bills with no problems. We were also fortunate that I was in grad school at the time, which meant all my student loans were on deferment. Looking back, I can see how blessed we really were at that time, but of course I didn't see it then.

I had no savings, nothing to fall back on. It took me five long months to find a job. During that time, I worked my Mary Kay business some kinda hard. That's when I discovered that direct sales is really not for me. I barely made any money at all with Mary Kay in those five months. Which is kind of hard to believe, because Mary Kay products kind of sell themselves!

When I finally found a full-time job again, I was so relieved. The money wasn't nearly as good as my last job, but at least I had a steady paycheck again. I had plans to start saving a little out of each paycheck. I planned to start paying on my student loans as soon as possible, and pay more than the minimum amount each month so I'd get them paid off quicker. I wanted to be smarter about my money, because now I knew what it was like to not know if I'd have enough. (Well, sort of. Of course I always had my husband to support me, so I never really did without anything at all. But I always try to think what if he lost his job??)

Well, of course, life happened and my plans didn't exactly go like I'd expected. Books for grad school were crazy expensive, as was tuition (and I wasn't willing to take out any more loans). Then I got pregnant (sort of planned - we thought it would take much longer than it did haha!), and what little money I had managed to save went to her crib and my coinsurance for OB visits.

So yeah, I was still unprepared for life.

During my pregnancy, I tried really hard to be money conscious. I'm not one to spend a bunch of money on random things. I don't get my nails done or my hair colored. I don't have to wear the latest fashions. I did have to spend quite a bit of money on maternity clothes, but I got pretty big and my regular clothes wouldn't even come close to fitting, so that was a necessity. Anyway, DH and I have never even went on expensive dates. We've always preferred to stay home and cook a nice meal and watch a movie. So our entertainment expense has always been fairly low. But somehow, regardless of all that, my money has still managed to dwindle away every paycheck.

After C was born, I became painfully aware again at how much I was spending. I had a 6 week maternity leave (that I stretched to 7), but it was unpaid. Thankfully, we were given enough diapers and wipes are our baby showers that I didn't have to buy any of that until C was almost 4 months old (and then I switched to cloth diapers which saved us a ton of money). But I was shocked at how quickly I needed to buy stuff for her. Looking back, a lot of it wasn't really necessities. Yes, she needed clothes, but she didn't need 18 outfits in every size, or a different dress to wear every Sunday so she never wore the same one twice. Granted, most of that stuff was given to us. But I was so irresponsible with some of the money. I naturally had to take back a lot of stuff from the showers, but instead of saving the gift cards for the returns for later on, I immediately bought new stuff that I liked for C. What a waste. I think the smartest thing I bought with gift cards was my breast pump. Everything else really wasn't a necessity. The point is, had I been smarter about the money, we could have had a nice stash of gift cards to stretch out for probably a few years.

But you live and learn, right?

So I had this realization about my spending habits. Then I began to be aware of the concept of living frugally/naturally/whatever you want to call it. That's when I delved into the world of cloth diapers, and everything kind of spiraled from there. I realized that a lot of this natural stuff was not only better for us, but it was cheaper, too.

C was exclusively breasted until she was 9 months old. I introduced her to solids at 6 months, and she ate a few bites here and there from 6 months to 9 months, but she wasn't that into it and I wasn't in a hurry. From 9 months to 12 months, she was still mostly breastfed. Then, just before 12 months she decided she didn't like breastmilk anymore unless it was straight from the breast. At that time we just put her on all solids, though she still breastfed when I was with her (and she still does at 25 months!). But all that breastfeeding saved us a ton of money. Plus, when I did start her on "solids," I made them myself. We never bought a single jar of baby food.

Between breastfeeding, making my own baby food, and cloth diapering, I was patting myself on the back for saving us so much money. And those were all great things to do, but I wish now I had done more. But I can't go back, all I can do is go forward and learn from my past mistakes and shortcomings.

Now, I am even more contentious about where my money goes. I thought I had a pretty good handle on it. I do a ton of stuff to save us money, but I am realizing how much more I still could be doing.

Yesterday I sat down to start making my budget. It was a slap in the face for me. I should have quite a bit of money just left over every pay check, and for some reason I don't. Like I said, I don't spend money on hair, nails, clothes, going out to eat or to the movies, etc., so I have to figure out where its all going.

I don't know how long this process will take, when I'll get to the point where I have a workable budget and know where every penny of my money is going. But at least I've completed the first step in the process: admitting I have a problem. Clearly, I am not good with money. If I was, my student loans would be much closer to being paid off than they are, and I'd have more money in savings than I do. And I wouldn't be counting on my tax refund to help out. So, I have a problem. Now I have to work towards fixing the problem and making sure it doesn't happen again!

I have a sort-of list in my head on what things need to happen. I am not willing to go to the extreme to get out of debt. I was reading yesterday about a woman who fed her children dandelions from the yard in order to save money. I'm not down with that. But there are things I can do without being so extreme that will still make a difference. Pray for me as I figure all this out!!  ( :