Tuesday, November 6, 2012

Budget Update

As many of you know, Matt and I had to kick our saving into high gear in order to move forward with building a house. We revised our monthly budget and have had to work really hard to live within it each month, so that we can bank my entire part-time salary. 

At first, the adjustment was really stressful. I was very bought into the plan. While Matt supported the plan, he had a lot more difficulty implementing the plan (primarily because it meant eating out less). Once we adjusted to the differences, however, it's really been a lot easier. We eat out twice a week (spending less than $20 for all of us at each meal). It's still a lot of money to spend on eating out, but it's a compromise between how much Matt wants to eat versus how much I want to eat out.

I'm happy to report that it's actually working! We've been banking my part-time salary for several months now. Also, when extra money pops up (e.g., Matt's bonus for the year or a reimbursement check from work), we try to put it into other categories (such as Baby #2 and furniture for the new house).

The one area for concern is our personal allowances. Our personal allowances are comprised of Christmas and birthday money from family, as well as monthly deposits (which have ranged from $35-$60 this year). Now that we've essentially cut out all frivolous spending from our budget (except eating out twice a week), it means that we use our personal allowances a lot more. We used them to buy Henry some new things for the kitchen. Matt uses his to buy candy at the convenience store. I sometimes pay for things for the school. 

After tapping into our personal allowances a lot more the past couple months, I am now down to $50, and Matt is at $1 for the rest of November. His birthday is November 22, so hopefully he'll be able to build it up a little! Having the extra cushion of our allowances has been nice to help alleviate the constricted feeling that can come from living within a budget. We'll see how the next couple months go without those extra little cushions!

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-A said...

Oh Sara! This post seriously made me feel more sure of my marriage. You and Matt always seem to be so in-synch and on the same page so it was nice to hear about a compromise about eating out. My husband and I battle about eating out and it is a relief to hear you guys might have a similar issue! Also, my husband is always buying candy/pop at the convenience store too! Thanks for making my day brighter Sara.

Sara E. Cotner said...

Hi, A! Matt and I definitely have issues in our marriage. We try to work on them through lots of communication and compromise. It's worth all the time and effort!

natalie said...

I truly don't mean for this to come across as critical, but I am genuinely curious about how you're managing to fund buying land and building a house, even with a part-time salary going completely into savings. I live in Austin, and I live on the east side; I know how expensive land is over here. I work for a non-profit (full time) and my husband is a lawyer for the state (full time.) I know that we would not be able to afford an investment like the one you're describing on our salaries. We have 2 children (one in Montessori, one in public school) and I genuinely don't understand how your family can afford to continue to rent a home AND build a home AND have another baby AND start a Montessori school... I'm just wondering if you have other income that you're not disclosing to readers (which is completely within your rights, but it does muddy the waters a bit from a logistical/transparency standpoint) or whether you're truly doing all of this on the salaries that you and your husband bring in.

Elizabeth F. said...

Merely curious, how are you planning on handling Christmas?

Sara E. Cotner said...

Hi, Natalie! The only other income we have coming in every month is about $100 from the Amazon Affiliate program (from links on my two blogs) and whatever I make from Purposeful Conception. I advertise for the courses on this blog, so you can figure out how frequently I run them. Most recently, the average enrollment has been about 10, and I charge $99 per person. I immediately set aside about 35% of it in a separate account so I have enough money to pay for my taxes.

One thing that really helps is that we don't have any student loans or credit card debt. Matt went to a state university where his mom works. I went to a private school in Florida with merit scholarships from the state and the university. I also had support from my grandparents, and I've worked ever since I turned 16. Our highest degrees are BAs, so we don't have any debt from extra schooling.

We use credit cards to pay for everything (for cash back bonuses), but we pay it off in full each month (this is where our budget comes in really handy).

We only spent $2,000 on our wedding, so that we could continue saving for our first house. Together our families gave us $12,000 toward our first home. Three years later, we got really lucky and sold that house for $20,000 more than we paid for it. We also didn't use a realtor, so we could keep all the extra money.

We found a 1/2 acre in East Austin for $49,000. We used the money that we got back from the downpayment on our first house (plus all the extra money we paid into our mortgage after we refinanced and we were both working full-time) to purchase the land and pay for the downpayment on the construction loan. Now we are saving for the downpayment that we will have to pay for the permanent loan.

We purposefully looked for a rental in South Austin where the rent is less expensive (and so our commute to Henry's school would be less).

I'm trying to figure out how to get our health insurance to pay for some of the expenses related to our second baby, and I'm shopping around for a reasonably priced midwife.

As for the public Montessori school I'm working to start: it will be a charter school that is funded by the state and federal government, so I don't need to put any of my own money into it anymore. I recently paid for something for the school out of my own allowance, but that's because I was being lazy and didn't want to separate out my various purchases at the post office.

Please let me know if you have more specific questions!

Sara E. Cotner said...

Hi, Elizabeth! I've been thinking a lot about how to save money at Christmas. A couple ideas:

1) Making a lot of presents with the craft materials we already have on hand (we've accumulated a lot of fabric/yarn/paper/etc. over the years).

2) Using bookstore gift cards to purchase books for people (I got a lot of them at the holidays when I was a teacher). I still have them a couple years later because I mainly use the library now.

3) Buying a couple small gifts at Whole Foods when we're doing our weekly shopping, while still trying to stay within our food budget.

Anonymous said...

Hi Sara,

I am wondering if you have or would consider posting on having your first newborn on a budget? It can be pretty overwhelming (and expensive) – toys, diapers, breast pump, toiletries, clothes, furniture, car seats, strollers, baby carrier etc... I don’t want to be such a consumer and there is a big part of me that thinks you don’t really need all that stuff. What would you recommend? Are there any must haves? I know that every baby is different, but I am curious how you tackled this (especially considering you are so good at budgeting!)


Sara E. Cotner said...

Hi, mmc-290! This topic is so tough. Not only are babies very different; their parents are too! Everyone's list of "Must-Haves" is different.

Here are the things we did not purchase and did not miss: crib (we put a crib mattress on the floor to align with the Montessori philosophy), changing table (we folded a towel on the counter next to our bathroom sink), infant seats or swings (we put Henry on his mattress under mobiles or on a towel on the bathroom floor when I showered), or rocking chair/glider (we used our front porch swing).

We tried to put as much as possible on our registry (we are very fortunate to have some generous family members, friends, and colleagues). We put stuff on there that we would need for his whole first year. I found both the Ergo and the Moby wrap to be indispensable. I also adore the BOB jogging stroller (it's our only stroller). All of those things were on our registry, but if they hadn't been purchased for us, we would have tried to buy them secondhand. So much baby gear doesn't even get used very much before it's donated. You can find really good deals on high-quality items.

If people bought us stuff that we couldn't see ourselves using, we returned it and got store credit. Of course we felt bad about doing that, but it seemed better than storing something we wouldn't really use and then later donating it.

We borrowed a breast pump from a family friend.

We got a lot of baby clothes as gifts, so we didn't ever really buy Henry many clothes. We knew he would outgrow them very quickly. We did invest in cloth diapers.

That's all that comes to mind for now! Definitely let me know if you have more questions.

Wishing you the best!

DeFox said...

I just found your blog and today's post was so perfectly aligned to our own budgeting. Thank you for being so open to the challenges, the purpose, etc. We are saving for a different purpose, but the struggles, compromises and communications are the same. On a separate note, our 3 year old in in Montessori and we LOVE it! And my husband started a charter school in Los Angeles (10 years ago). It is with that that I look forward to following your blog!

Sara E. Cotner said...

Thanks, DeFox! It's nice to "meet" you and I look forward to seeing you around these parts (and hearing about what you're saving for!). Happy Wednesday, s.

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