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We try to live frugally and within our means, but Carson and I have always struggled to keep a strict budget. Between a job loss, move, home renovations, and a lot of medical expenses–we haven’t had a “normal” year in quite some time.
In the past, I pushed budgets aside, thinking I didn’t need them because we often shop secondhand and don’t spend more than we can afford. However, I have several projects that I want to tackle in addition to continuing to save for my kids’ education and our retirement. I listened to a podcast a few months ago that talked about the importance of discipline and sitting down to do the things we don’t want but need to do. For me, this is sticking to a budget instead of just keeping it in my head. Charlotte Mason, the great British educator who focused on home education, states in her book Parents and Children: Charlotte Mason’s Original Home Schooling Series, “For a habit is set up by following out an initial idea with a long sequence of corresponding acts.” Sonya Shafer expounds on this idea in her book Laying Down the Rails for Yourself: Good Habits Are Not Just for Kids, “You will be more assured of ultimate success if you have a compelling idea” (p. 24). For me, the compelling idea that is motivating me to stick to a budget is being able to renovate our shed into a school room and eventually into a rental property.
So, although we are still learning and are not budgeting experts, I wanted to share what our family is doing to save for our future goals. These tools and methods have helped us organize our budget, and I hope that they can be useful to you, too!
Etsy Monthly Budgeting Spreadsheet
A few months ago, I purchased this budget template from Etsy to help us organize our spending and expenses. I like how it is comprehensive as well as aesthetically pleasing. It breaks each month down into expenses, savings, debt snowball, and sinking funds. This spreadsheet helped us determine how much we could save each month as well as how much we need to have in the case of an emergency.
Rocket Money App
Another tool we are using is the free app, Rocket Money. It automatically breaks down your spending into different categories so that you can see where the majority of your paycheck goes each month. This app was helpful when we initially set up our Etsy spreadsheet so that we could see an estimate of our expenses from month’s past. It also helped us target where we were overspending… primarily with groceries and eating out. We are planning on using Rocket Money and our weekly bank statements to ensure that we are keeping track of our expenses each month as we manually transfer them to the spreadsheet we bought.
We have a basic checking account that we use to deposit money we earn as well as pay for monthly expenses like our mortgage, gas, electric, fuel, and groceries. Because we don’t keep the majority of our savings in this account, we have to think twice before making purchases out of this account which is helpful when trying to stick to our monthly budget.
We have been saving for several years, but we never had a quote on quote Emergency Fund. I was able to use the Etsy Budgeting Spreadsheet to determine how much we spend on average each month, and I set up a separate Money Market savings account with our bank to hold enough savings to fund three months worth of expenses. Our goal is not to touch this amount unless we have a major emergency such as a job loss or major home/car repair that must be fixed immediately.
Sinking Funds is the budgeting area that we kept getting stuck on when attempting to budget in the past. We knew the basics of setting up a budget for monthly expenses, but what about for one-time purchases that are larger than what we would typically spend in a month? Some examples of this include vacations, home renovations, and potential car repairs. So, I started researching about sinking funds and set up a separate checking account to hold this money that we are saving for upcoming projects or trips. Currently, our sinking funds include Christmas, vacations, home projects, shed renovation, garden, chickens, new furnace and AC, and extra expenses (i.e. car repairs, roof repairs, etc.). Currently, I am keeping all of these savings in one account and am manually tracking how much we have saved for each category. We have considered opening separate checking accounts for each category or investing in an app like YNAB that automatically tracks them, but for now we are keeping track of these savings within the Etsy spreadsheet we purchased
Betterment for Kids' Education
My Dad is a financial advisor, and he wisely helped me set up an account with Betterment when I was back in high school. Each month since, I have deposited $100 into the account. A few years ago, Carson and I decided to make this into a long-term/higher risk investment. We continue to deposit $100 per month, and our intentions with this account are saving for our children’s future education–whether they choose to attend a trade school or university.
When I was teaching, we had a really good match for retirement, so I was able to save quite a bit even though I only taught for a few years. Carson has been contributing 10% of his salary each month to retirement. It means that we have less money coming in each month, but we are hoping that making this sacrifice while we are young will benefit us in our future.
Initially, we paid for our home renovations by purchasing a house quite a bit under our budget and by using the extra we made from selling our previous home to restore our current one. However, as many who have a fixer upper or homestead know–the projects are never ending–and they often are not cheap! So, we are actively choosing to save for the projects with intentional planning as well as being mindful of how we can make the most of what we have.
Later this month, I will be releasing a Home Renovation Budget Spreadsheet and an accompanying Planning Guide Workbook that Carson and I built together. If you have home projects you are hoping to do this year, sign up for my email list below (scroll until you see Join the List) and you will be the first to know when I release these tools!