Recently a common conversation has been occurring and it revolves around the cost of raising a family and living, the cost of getting by or even trying to get ahead and of course my all time favourite subject (NEVER EVER!!!) Budgeting. We have decided to start off March by tracking our expenses. It all started because I was shocked at how much we spent in Hawaii on groceries and kids diapers, formula, etc. I was shocked but to be totally honest never have paid attention to what we spend at home and possibly spend the same here and don’t realize. It got me thinking I should know roughly what we spend on groceries or gas or even on the going out in a month. Plus if we do decide to budget we should probably know where we could cut from.
Now I have a hard time budgeting but my spending habits have changed huge in the past 5 years. I have always worked (like since I was 14, and even earlier if you count babysitting). So, I always had money to spend and spend is what I did. I loved to shop, had very little financial responsibilities which meant things like spending $300 on a pair a jeans was okay, or getting my hair cut and coloured regularly for $300 was fine. Over the last 5 years I have become a homeowner, purchased a car on my own, had babies and now become a stay at home mom (meaning I no longer have an income). I guess you could say I have became a person with responsibilities. I love the changes in my life and I even like the reality check I have had, as it has really helped me to learn a bit more about priorities. I still buy and wear $300 jeans but I have only bought two new pairs over the last 3 years, and one was on sale (you don’t want to know my old stats on this bad habit!). I rarely get my hair cut and no more colouring for me, but this is more a time issue than budgeting. My life experiences have changed me and things I would have never imagined giving up have become easy and normal. For me the biggest change is having kids and knowing 3 little people rely on us to make good financial decisions and what used to seem important really doesn’t compare to the health and happiness of our kids.
The older I get the more I realize how precious and fast life is. We have experienced loss as a family before but since January Fraser and I have lost three friends. Lives taken far too short (not all our age) but all too young and leaving behind kids and families. This has had a huge impact on me and us, and has really changed our views on lots of things including money.
Now at the end of the day money makes the world go around and brings us security, safety and happiness even if it is temporary or superficial. However what truly makes our hearts happy is to see our kids and family happy and healthy. To know we are safe, feed, minimize stress, sleeping, eating well. These things are important and to some degree require money. I don’t want us to be crazy and dig out a deep hole of debt (been there and done that, don’t want to do it again). I also don’t want both of us to work our asses off only to find out life is shorter than we realized and we missed out on the now. We can’t turn back the clocks and redo our kids childhood or go on vacations or to special events we missed out on.
This means although we will budget we will also live, we will prioritize what is important to us and work hard at making sure we are fiscally responsible but not work so hard planning for the future we miss the present. We still can set goals for the future or be all responsible and plan for our retirement.
We try to follow some basic rules when it comes to budgeting. At the end of the day it is fairly basic with budgeting. You either increase your income or decrease your expenses! Easier said then done.
Here are some of the things we do:
- Have a contingency fund (this goes for anything). Savings for unforeseen circumstances. This is not something I have ever done or done well but I am so thankful for Fraser and his ability to save. He loves to “hide” money or just tuck it away. For example we recently went to Hawaii and took cash but also had US Credit cards. He took a bunch of our US cash and tucked it away when we used out credit card so when we got home we had money to pay for it! The crazy thing is whenever he does stuff like this I don’t even notice but am so thankful he thought of it.
- Prioritizing needs vs wants. We recently were given the option to privately test Rowen for Autism instead of waiting a year or more for a public test and we had wanted to put in a gas fireplace insert this year at Christmas but instead we used the money for Rows test. We don’t need a fireplace insert we just really want one but we would like to have some answers as to what has been going on with our son and how we can help him. Sometimes it might not be needs or wants but more of a case of priorities. It is hard to realize you can’t have it all but good if you can think what do you want the most?
- “Extra” Income. When we renovated our house we really wanted more space so we decided to renovate and move upstairs. The layout of our house is a bit choppy and if we used the entire house we couldn’t have our super young kids on a different level than us. So, we kept the basement suite and rent it out for extra income. It is great because it allows me the financial flexibility to stay home with the kids and also to help offset our mortgage (which we refinanced to pay for the renovation). Last year we were also able to participate in a local market and Fraser made some beautiful wood products to sell. It was a super fun day but the best part was we made a little bit of cash! These are just a few examples of “extra” things we do to make some extra cash. It is shocking when you start to look around or try how you might be able to bring in extra income. Maybe its having a garage sale or selling stuff you no longer use or need, maybe its taking in all your bottles after a big party:) Whatever it is remember every little bit helps.
- Choose Debt Wisely. I guess one way we budget is by being strategic about our debt. We love being homeowners but it has meant we needed a mortgage and therefore have debt. The interest rates are low, and we hope real estate is always a good invest and even makes you money (it already has). That being said we of course know credit card debt is bad, high interest and dangerous cycle, so if we need to use a credit card we pay it off ASAP or use the LOC instead and then pay that off. One example of choosing wisely is when we choose to renovate our house we ended up doing a bigger renovation than we originally had planned and to be able to afford it we had to use some form of financing. After checking out all our options we ended up refinancing and tacking it on to our mortgage. This was the least costly way to do it.
- Ask a professional. Basically don’t take advice from me talk to someone who knows. We ask advice for everything why not seek it out for something as important as our financial planning. Ask your mortgage broker (this isn’t a budget tip because I would assume everyone uses a Mortgage Broker, hopefully your using Meghan Dodds Mortgage because she’s the best), insurance broker (Courtney Chambers is ours and we are so happy, she does it all house, auto and life insurance!), financial planner, and anyone you admire with finances. Pick financial role models and learn how they have had success!
When it comes to our financial attitude I think it changes but I am so thankful that out of Fraser and I he is level headed (usually) and for the most part makes sure we live within our means. The good news is our means are enough and we get to live a good life, the hard part is deciding what areas are important to us and what things we can live without.
We have decided our kids and family experiences are important, as well as good food (we try to know where our food comes from, buy some organic and mostly quality), and enjoying time together and with people we love. This also means taking time off, this is a big expense to us as Fraser is the only income earner in our house and when he takes days off they cost us pretty big $$$. However those days are worth more than money to all of us, so we will continue to save and prioritize time as one of the things we invest on.
Would love to hear from other families on how they save or don’t? And what budget tips you might have.