Overspending. This is one of my biggest financial challenges. I'm a Stay-at-Home Mom, with 2 active young boys (ages 8 and 5) and I am responsible for overseeing our daily finances. Each month I get an "allowance" from my husband which covers all the bills (school tuition, house, utilities, car payment, etc.) and I have money left over to spend on all the day to day stuff (like groceries, eating out, haircuts, etc.) Every month I get the bills paid that have to be paid and every month I overspend the extra money. This year I had to ask my husband for extra money 11 out of the 12 months. Not good. We still managed to save money but not near as much had I stuck to my budget.
Okay...you may be wondering how I overspend money if I don't have it. Good question. It's because I put every single expense (anything over $1) on my American Express card. The bill comes in the following month, I don't have enough of my spending money to cover it, so I put in the request for extra money.
A week or so ago I prepped my husband that I will need extra money in January to pay the American Express bill. He made a comment and suggested that I should spend only cash for our day-to-day expenses and "turn in" my American Express card to him. One idea led to another and we joked that we could live on $40 a day (we were thinking of Rachel Ray's show). He went to bed and didn't think another thing about it and that is when my mind began to race. I started to crunch the numbers (which I love doing) and figured out that once the bills are paid, I have about $1350 left which comes out to $43 a day. So, I'm thinking that if I work to live off $40 a day then I'll have a little cushion left at the end of each month for any unexpected expenses.
My $40 will go towards groceries, eating out, entertainment, registration fees for the boys sports, haircuts, clothing, movie/video game rentals...pretty much anything that is not a fixed expense.
Since I've always used American Express for my daily expenses I won't have the "cushion" in my account to start using cash in January--since I'll be paying December expenses with my January allowance--so we'll have to withdraw money from savings for my $40 a day in January. I've promised my husband though that I'll trade him my American Express card for the cash.
Wish me luck with this! I'm using this blog to help hold me accountable and so that I can see where any of my pitfalls lie with my spending. Feel free to e-mail me suggestions.
7 comments:
Good luck to you! I think you are right to not use the Amex as a cushion.
The biggest thing that has helped me is my own slush fund. It is a savings account that I pay myself like a bill each month. When a large expenditure comes along I can pay it and I just keep paying into it again each month. Also I pay this bill first. i never had any savings before. I used to just run it out and if an unexpected bill came along I was blindsided.
I am saving this way for my parents right now who are on a fixed income. My siblings contribute to it each month and my parents do not even know about it. If they need something more we can help out without being surprised.
Everyone needs a margin for the unexpected.
I wish you well.
Does this mean your husband doesnt contribute to any of these bills?
Like eating or things for the house or the kids?
OMG- good luck to you. I have no kids,,,my boyfriend of 28 years pays all the household bills- and food. I just have my expences to deal with--cell,,car insurance,,credit cards,,,I try to limit my self to under $100 a day..It is hard. If I didn't leave the house,,or just totally worked,,I maybe could do it. But on my days off I shop--Ugh, i need to learn the process of a budget- looking foward to reading more-Helena
Hi Robyne,
My husband does have some day to day expenses that he puts on our AMEX but not many. He'll pay for his gas and when we go out to eat. I'm planning on these expenses being part of my $40 a day.
~Ree
Wow $40 a day!! It's hard :)
I have a family of 5 and 4 dogs , lets just say it does not get easy the older they get. I can never spend $40 in a day unless I've went out to dinner, I've always pinched here and there and hubby is really happy about that. If you need any tips or advice let me know.
terry
Terry,
I would LOVE for you to share some tips on how you save money with your large family!!
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