** It’s a little weird to publish this, I know I was the one who said she wanted to talk about budgets but now that I’ve been sitting on this and revising this for the past couple weeks, it’s hard to not sound like a know-it-all or just a princess. Which there will be a number of you who come to that conclusion and thats ok. The three things you’re not supposed to talk about; money, sex and religion, are basically what I eat for breakfast so here’s where we call a truce. In relationship these topics are met with vulnerability and understanding. They’re fragile and solid, invisible and fully formed. They’re complex, and I love discussing them. Which is hard to do as a one-sided digital essay. I don’t know it all. I’m not the person you want to ask for stock tips or investment opportunities (unless you’re talking real estate and then I’m your girl) and I’ve screwed up many times with our budget and finances. This essay is an over all snap shot of the bigger picture and not a soap box for me to stand on and complain (there is NO complaining). We have everything we need and we value resourcefulness over resources. Want to skip this one entirely? I don’t blame you, here’s a sleeping kitten.
If you’re new here you might not know that 6 years ago we sold a house, started building another one, sold that one, tried to buy two more homes over the course of two more years in 2 different rentals and finally, four years ago, bought the house we currently live in. Over the last 3 years we’ve gutted this home and made it our (hopefully) forever space.
There’s a specific reason for this run-on sentence of a decision.
We wanted to be debt free, yes. But with Aaron’s job there’s a lot of personal risk involved. If Aaron would have gotten into an accident or died unexpectedly our income would have stopped with those tragedies and I wouldn’t have been able to afford our house payment. The decision to move and lessen our monthly output was a very tactile decision for our future.
There isn’t a ladder for Aaron to climb as a business owner. He doesn’t work at a company where someone else just hands out raises or promotes him based on his performance. That’s his job, he’s the ceiling. So if our life requires more cash, we can’t knock on a bosses door and ask for it. Yes, there are perks to owning our own business and yes, sometimes there are good years of plenty and there might be profit sharing, other years we lose everything and start all over. Not only do we live a debt free life, personally, but also professionally. Aaron is the sole owner of his companies and it’s a core value for us to operate them without debt, partners, or venture capital.
Now, here’s my disclaimer. Please take this with a grain of salt. We started out very differently than so many of other business owners/professionals. Neither Aaron nor myself had any debt of any kind when we got engaged (We didn’t go to college, ergo no school loans). We bought our first house together before we were married and I “rented” it from Aaron until after the wedding.
We were a dual income household when we bought our second house (the house we sold in the beginning paragraph). I was pregnant with Jessica but working full time with health insurance and Aaron was employed full time as well. On paper we could afford the house but 6 years later with two kids (one of which we ended up paying for the prenatal care and delivery to the tune of almost $30,000 out of pocket), a start-up business and only one income; we were selling everything and then some to keep our house above water.
We took a substantial loss when we sold the house, twenty-thousand to be exact. Rolled that into our new build loan but when it sold before it was finished it sold for an appreciated cost and cut our initial debt in half. We rented for 2 years to save money and pay-off the remaining debt from the sale of our house. We had sold cars to pay our hospital bills and somewhere in there bought our minivan with a small loan and paid that off in those two years of renting as well. (Are we still on the same page?? Anyone??) We saved everything and our goal was to buy another house but with 20% down this time, no questions asked.
SO. You guys – we did. We bought our house that we live in now with 20% down and our mortgage is under $300 a month. This is why we did this. We can also now (and only now) afford to send our kids to private school.
We live differently on purpose. Now if catastrophe hits the fan, our family won’t crumble. We finally have better health insurance and this is the first year in the last eleven that we haven’t ended the year paying out of pocket almost double what we’re allowed to contribute to our HSA. This might be the year we actually carry a balance to be able to save up for emergencies where insurance is concerned.
I really like to budget, I love numbers. I get jazzed about this stuff and yes, with our low monthly output and no debt (aside from the mortgage) to our name – we can do more with our income. This is how we’ve given ourselves “raises” through the years. We reduce the amount going out so the amount coming in looks like it’s growing even though it isn’t.
But it’s still hard because money is still money and it buys really fun things and we still have to say no and save and work and have goals.
My eyes are a little bonkers. I realize this is either really interesting or completely irrelevant to you, I get it. I wish more people would talk about this because it fascinates me.
As a teenager I set myself up on a budget based on percentages. So, when I got a paycheck (or cash from babysitting) I would automatically calculate 30% of what I earned for savings, 10% towards gifts/tithes, 15% towards gas/car maintenance, 30% towards spending and the other 15% went into a slush fund of sorts to build up for things like insurance or my eventual cell phone bill. I changed the percentages when needed (like every 6 months if my expenses changed) but I was pretty strict with my self and how I managed my (very little) income.
Alllllllllllll these years later I’m still doing a version of this. Only it’s not based on percentages and instead of me calculating the amounts for our categories, our direct deposit does it for us.
EASIEST THING IN THE WHOLE WORLD.
I wanted to talk about this for a few reasons, one because I’m a geek and setting up budgets for automatic saving or spending (automatic bill pay anyone? Oh my gosh, now we’re talking. You’re so naughty) is one of my secret powers that I want to share with you but also, as it turns out, not a lot of people think the way we do about this kind of stuff.
I realize that if you find yourself in a similar situation to where we were six years ago your train of thought might not lead you to the hop-scotch selling and building and renting as it did us but I guess I’m weird? It’s like walking into a house and seeing the walls come down. I can just see it.
Aaron took some convincing, he sort of just expected to have a car payment and house payment and credit cards. Not to abuse, just because thats what he thought it took. Only, I don’t know … I disagree. We don’t have to have it all, I’m not interested in more stuff. Experiences? Yes, let’s do that. Let’s travel and see and taste and explore. Let’s put our dollars to work in our kitchen, on our table, and in our hearts with our memories. Let’s build a life worth more than counting numbers.
So I guess a budget is like really good boundaries, if we want to bring it from tactile to emotional because this girl loves a good metaphor. I love boundaries. There’s more freedom within them than outside of them. If I have absolutely no boundaries then I have no direction. Wide open spaces are only fun for so long and then you start wondering where you can put things. Where does this go? And what if I had a place for that?
I’d argue that I am not Type A. I’m creative and messy and full of feelings and I cry easily and laugh loudly and I like to giggle whenever it bubbles up and I love surprises and adventure and being a free spirit … who also can get down with a budget, a repeatable file system, grocery shopping and menu planning.
But thats what I hope to bring to you in this mini-series of “House Keeping”. My slightly bent, what-works-for-us routines. One last thing? There aren’t short cuts. It’s a lot of work to stay on top of menu planning and budgeting, there isn’t a quick fix, that I’ve found, that lasts. There’s just doing the next right thing. And then the next thing, and then the next. If ordering take out is the budget saving solution to eating at home, then do that. Next month maybe you’ll go to the grocery store on the weekend, and the next maybe you’ll menu plan too … 3 months into small changes you might be cooking your own food from your kitchen and adding up the savings towards a vacation. Or maybe towards the debt you might carry, or the eventual car replacement headed your way.
Whatever it is, doing nothing is actually doing something.
With that little nugget of gold, brought to you by inspirational posters every where, I’m out. Peace.