Friday, August 4, 2017

Reviewing Our Budget

Now that this is the last full month of summer and fall will be here next month, it is time for us to review our budget for the rest of the year. This is something we always do in July or August, especially when our kids were at home. There seem to be so many expenses when you have children. So coming into the last few months of the year, it is good to be cognizant of them.

For those of you with kids, you have school expenses not only for supplies but clothing and shoes. We always looked at whether the boys clothes were appropriate for school. Did they fit? Were they hole free? Were their sneakers worn out? Would they last until they changed sizes? Did they need a new coat or jacket? They were just a few questions among many that we debated. If they needed nothing, we were lucky but they always seemed to need something. At the very least, we would buy them each one new outfit for school.  

That outfit would be saved until school pictures were taken. That was always another expense- school pictures. They weren't cheap back then but they seem to be ridiculously expensive now. If I had kids now, I would be tempted to take our own pictures each year. 

Fall also brings Halloween and we know that Thanksgiving and Christmas aren't far behind. All of these holidays cost money. Costumes, candy, food and gifts all seem to be crammed into a 2 month period. It's great if you can make gifts all year long or buy them on sale and set them aside. We all have good intentions but those intentions sometimes go by the wayside.

Many of you may pay your school taxes in September in a lump sum instead of having the bank take them out all year. We have always paid our own taxes without having escrow for them at a bank. Even when we had mortgages. We always hated the idea of the bank making that interest. When we had our first mortgage the banks did not pay you interest on that money. Even when they finally started paying a little interest to people on their escrow money, we knew we could make more interest than they were paying.

Even though we no longer have kids that we are paying for, we have hefty school taxes every September. We still have all of the holiday expenses and gifts not only for our grown kids but daughter-in laws and grandchildren. We also have annual car insurance due in December. This is our year to host  some family for Thanksgiving. 

I also take a look at my stockpile for the winter and see what I am lacking. Then I try to stock up at the Thanksgiving and Christmas sales especially for the food products that are at rock bottom.

Do you see the common theme here? They all take money, extra money besides the basics this time of year. Some people are good at budgeting for these items all year long. Others not so much. So if you are the latter, you have to work these things into your budget over a couple of months without borrowing money from credit cards to do it. Cash is good. Credit not so good.

Who wants to pay for these expenses with credit and then pay interest on them? I always marvel at people who spend lots of time getting a great deal and then put them on credit cards that they can't pay off when the bill comes. So they pay interest month after month oblivious to the fact that they didn't really save any money getting that great deal. 

So avoid that and budget for them now if you haven't already. Get a grip on what those expenses will be. If you can't pay cash, then don't buy things. It's as simple as that. Don't buy what you can't afford.

We had a Christmas one year when we first got married when we couldn't afford gifts for our extended families. Hubby had been hit by a car walking from the parking lot into work. I was not working. We went without income for a number of months because Hubby had just changed jobs and didn't have his benefits built up, so no pay. We just told our families that we could not afford Christmas gifts so we would not be exchanging. We wrestled with doing that but our budget came first and we had other expenses like our mortgage payment and food to pay for. We hoped that they would all understand which they did. 

So take a look at all these things that you need to pay for the rest of this year and see what fits and what doesn't. Cut where you have to and don't feel guilty about it. Do what is right for your immediate family. Don't charge these expenses when you know that you can't pay them off before you have to pay interest. Take the stress away.

We will be reviewing all of the items in our budget over the next couple of weeks. We will be making cuts in many categories for the rest of the year. We are hoping to carry those cuts over into the New Year. I will be blogging about all of those cuts and how we will pay for the expenses coming up in a number of posts. So stay tuned.

6 comments:

  1. I typically start planning for our next year's budget in the October time frame, but will likely advance the planning this year. We have a lot of big changes coming up with our financial planning, so I think I'll need more time to get everything sorted out. I too review all of the categories, determine which to cut, increase, or decrease.

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    1. I wish you the best of luck with your plan.

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  2. My husband and I are going to have 2 major bills paid off in January and are already planning to roll over those freed funds to pay off some other debts.

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    1. Hi Debbie,

      Congratulations to both of you. That is wonderful!

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  3. About gift giving. I've always told our children (especially with them now in the "starving student" phase of life, if you can't afford to buy a gift, write a letter mentioning favorite memories, expressing gratitude for what the person has taught you or given you, and tell the person how much you love them in your life. When I have done that the recipient says it's the best gift ever.

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    1. Hi Rozy,

      That is perfect! Thanks for sharing.

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