This is a topic that I brought up last Sunday during a discussion on budgetting that I'd like to get other peoples' thoughts on, so feel free to share them. If you talk to a financial guru, like a Dave Ramsey type, they'll tell you a good rule to follow is to pay off all debt (or avoid it in the first place), then save up an emergency fund, then if you want to do anything extra, save up for it. Sounds simple enough, but there remains the question of balancing the "uneccessary" things in life: those things that create memories, take advantage of the moment, encourage developing talents and so on. The timing to do some of those things may not be in sync with your financial stability.
I'm the first person who would say "stay out of debt" and "find inexpensive solutions" and so on, but I wonder sometimes if I'm finding the right balance, or missing opportunites to enrich the lives of my children. I would've loved to have all my kids trying out dance lessons, more sports, more music, but I've always felt that it didn't fit into the budget -so while we don't have consumer debt (don't ask about student loans) and have a measly little emergency fund, my older girls are 10 and 8 and have had limited opportunities to explore and develop their talents. Also, Todd and I have been wanting to celebrate the end of his law school - a celebration-worthy event, I think - but have felt like the money needs to be reserved for the great unknown of starting up his own practice. Are we ever going to go on a special trip anywhere or is there always going to be something that will be more important? Even when I make a special effort to save up for something specific, in the end I often opt to keep the money in the bank instead.
Life doesn't always follow the ideal roads, and making decisions about what you value and how to best spend your money and your time can be difficult. When Todd is done with his current job and starts up his legal practice, we have no idea what our income will be. How can I plan a budget on the unknown? I know already how much the mortgage, power bill, insurance and groceries cost, and those costs are already as low as possible, unless we go with the "live in a box and eat dirt" plan B. Reminds me of every time I read an article about saving hundreds of dollars every year, it always assumes that you needlessly spend hundreds of dollars every year on daily lattes, eating out, high energy costs, non-sale items, etc. Believe me, I was born and bred to be cheap and I know ALL the tricks.
Now, I know the ideal answers: Live on less than you earn, so you can have excess money for extras; Find less expensive ways to do things; Don't get in a situation where you're paying money without getting the benefit (i.e. interest); Poor in money can still be rich in happiness, and so on. It's what I would tell myself. But I know there are many opinions out there, and I'd like to hear some of them. How do you make decisions about how to balance being responsible with living and loving life?
11 comments:
Difficult question. If you spend too much time thinking and planning for tomorrow you will find yourself with a lot of empty yesterdays. On the other hand, it is irresponsible to not consider tomorrow. Sorry, I don't have a good answer for you.
Allison, great question and insight. I am all too familiar with the Ramsey plan. In fact, I love it. What I love most about it, is the budget. Money is X this month and we plan what to do with it down to the penny.
Even the concepts taught in the get out of debt plan are wonderful.
Now to a personal story, last spring our family went to Seaside for the first and only time. They have all kinds of fun things to do, nothing like I have seen at other coastal towns. We went, we looked and we went home. Both Shaun and I felt we couldn't spend a dime, because we were trying so hard to pay off his student loans and the areas of our budget that were flexible like "food and gas" are really not that flexible. To play that day would have meant less food in the fridge. From that experience we learned to budget for fun. We set aside money for the family. So that we are never again in that same experience to go somewhere and do nothing. Our children need memories, and some times that cost a bit of money. Yes, that means we are slower to get out of debt. I only have less than a handful of years with one of my children, before she moves on to college. Home needs to have memories, because memories bind.
At the same time, we won't be going to Disneyland until our debt is paid off, but that is our decision of priorities and each of us needs to set their own.
To sum it up, be cautious, be careful, be prayerful and be a team.
I know my comment does not address the variable income that Todd's new career will have for the first few years, but I am looking forward to the advice you will all to soon have. Best luck and don't worry.
I think we are in the same boat right now...having just enough(sometimes) to cover our basic needs expenses. Sometimes I feel like we are not even meeting those.
Our constant concern is do we still allow for piano lessons or other music with the extras they always include - or do we eat or put gas in the car...
I wish I could say that we have found an answer. Even without debt, we find that we have had to give up the music, or the family dinners or outings, just to make ends meet.
It is especially hard in these times, esp raising a large family. Even having a full time, stable job doesnt guarantee we will have everything we need, and usually means doing without any extras, and doing without being able to add to food storage or emergency funds.
Preston might get a 1% raise this year, maybe, but our insurance and other expenses (food,fuel,and medical specifically)will be going up by 9% or more....
We have decided for this year instead of lots of gifts under the tree we are going to encourage the kids' love of reading and choosing good media by giving them gift certs to somewhere like Borders; encouraging talents, good haibits and family time. We are also planning to MAKE time for family outings throughout the year. That worked great for us in the past - our christmas gifts were "dates" throughout the year. If we sit together as a family and put things on the calendar, we can know what fun things we have to look forward to, and start savings goals for those things that might need a little extra money.
This way we make sure we are including those special times into the budget, into the balance.
This might not work for every family, but it has worked for us the last couple of years.
All we can do is keep trying to do the best we can, some days that is alot, some days it is a little bit.
You will be able to find out what is best for your family. Good luck!
Tricky business. We also do the Dave Ramsey style of budgeting. Puting away a few bucks for family stuff is important, but it doesn't always happen for us. I think that for us, our inconsistency is a from on consistency. We do a lot and free and cheap stuff, and less of the money sucking stuff. I guess that is our balance, although we would love to be able to do fun expensive things more often, but paying tithing and taking care of necessities still makes us a happy family.
I am a firm believer in living on less than you earn...which is hard when you make hardly nothing (and have lots of student debt :))
I however budget every month and every year for family fun...we pay our bill and save what we can, but do not sacrifice our family together time. Some things we chose to do are cheaper. This summer we took a Yellowstone Vacation for a week for under $1000.00 (which could have been used for our loan debt) but we made memories and educated our children.
Growing up we had little money, and I missed out on 'talent development' so I am virtually untalented.
We can't afford a lot, but each child (and we only have two doing them currently)get to choose one activity at a time to try. I do not want to overwhelm them or our family with schedules either. There are cheaper options out there (AYSO soccer, parks and rec. programs, swim lessons.
Let's face it, they are not getting it in school, so it is up to us. You can do a little without doing it all.
Good to know other people are struggling with the same issues -thanks for your comments!
I think we should go to Disneyland. Tomorrow.
This is a tough topic! I find the same struggles with my time as well. Especially when it comes to kids activities how much is too much? You are definitely doing great with the budgeting saving thing. Let me just say that it is important to make time for the memories and fun sometimes. I remember how dirt poor we were through college. I have a memory of having only about $8.00 for groceries that week. We bought the necessities; bread, milk, and ice cream. We even took a small mini cruz when we were in Dental School to the Bahamas. It was quite cheap because we agreed to listen to a time share spiel for a day. We were dirt poor, but managed to do this. I don't regret it for a second.
My mom taught me this in life. She never charged on her credit card and was great at staying out of debt and keeping on a budget. However, she always made sure she had a little money for a special treat here and there or a special vacation. We were definitely tight at times. She had a little money automatically taken out of her bank account into a separate account each month for Christmas.We always had nice Christmases without over indulging or going in debt at all. I think she had the perfect balance of living and being money smart. She retires next month and is completely debt free with plenty of retirement saved. I have a lot to learn still, but I do appreciate this example! By the way we love Dave Ramsey and are trying to follow him,
as far as your trip with todd, check out cruisenowforfree.com/.
Actually Dave says to get a small emergency fund before you get out of debt so that when emergencies come up you don't end up putting more on the credit card... but anyway. Your girls might not do sports and music, and dance but they have been to Disneyland more times then my kids will ever get to go... it is just a matter of what means more to you. Although we will go when we are debt free!!! I think I agree with Denise about be prayerfull, and agree on what ever you do. I know you guys are very wise with your money and I know things will work out!
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