Having a baby in the house definitely adds new dimensions to one’s spending patterns. Jon and I have been doing our best to prepare for this, and so far we are doing pretty well. Here are a few ways we’ve made creative adjustments to our budget in preparation for Lucy’s arrival.
These tactics might not be for everyone, but they sure have worked for us.
*Actually having a budget.* Like most folks, we have always had good intentions about paying close attention to where our money goes. Nevertheless, we’ve seen cash go unaccounted for and receipts pile up, waiting to be accounted for. Last year, Jon and I started a new “envelope” budget. Jon designed a database where we can keep track of how money is spent from different “envelopes,” including ones for groceries, gas, dining out, baby goods, etc. All our monthly income gets divvied up into one or another of the envelopes, no more and no less.
Starting January 1, 2006, we got serious about keeping track of every penny. And it is great! The database is really easy to use, and it’s so freeing to know what we are spending money on. It requires a bit of discipline to enter each transaction, but the benefit is being able to see how much money is left in each envelope. My favorite part? Jon and I each have a monthly allowance envelope, which frees us to buy whatever we want. Now I don’t feel guilty when I treat myself to a special iced latté or a cute shirt — if I have the money in my allowance, that is! One key feature of the budget is a modest amount monthly that we’re putting aside now for Lucy’s education and (dare we say it) wedding. If we didn’t know what we could be spending, we would never feel quite as comfortable saving.
Getting a budget in operation has been the single most important step we’ve taken to manage our household economy.
*Becoming a one-car family.* I was skeptical about selling our second car when we first started talking about it last year. Jon and I each came into our marriage with a paid-off car, so we’ve always had two. I was nervous about feeling stuck in the house with a baby and no way out. But it really made sense for us, since Jon and I both mostly work from home. Granted, there are times when Jon is away at an all-day meeting and I stick around the house with Lucy, but I’m okay if we have a visitor or two and maybe take a walk in the neighborhood. We didn’t make hardly any money on the sale of that 16-year-old Honda (see photo), but the savings in car insurance alone (not to mention maintenance) has made our downgrade a huge money-saver. It was amazing when we realized we could always take a taxi somewhere (a couple times a week, even!) and still come out ahead.
*Planning meals.* I don’t like making decisions: it takes me a long time, and it feels like I’m limiting my options. So in the past, when I took a trip the grocery store, I would typically buy more than we needed so that I would have lots of options of things to cook — which inevitably resulted in wasted food and money. Sometime during our pregnancy, I decided to plan out our dinners each week and buy groceries according to that plan. This has had so many benefits: we stay within our grocery budget, we don’t waste nearly as much food (avoiding the tragedy of moldy vegetables ending their short lives in frustration), and instead of asking “What’s for dinner?” each night, we have something yummy already planned. I’m just getting back into scheduling meals now, having taken a break from cooking in the first month or so of Lucy’s outdoor life, and I’m always glad when we have a plan.
*Using rebate credit cards.* This is a tricky one to recommend, because we know lots of people have problems with credit-card debt. But if you can get to where you never carry over a credit-card balance, then the cards can really start to work for you. Fortunately, this is where we’re at: we get between 1% and 5% rebates from a couple of our cards, and that can add up to as much as $50 of free money a month. Some of this goes right back into the card balance, but some of it we turn into “mad money” via Borders gift certificates. (But watch out, because one month’s finance charges on a rolled-over balance will usually eat up the whole benefit….)
*Saving on the big items.* In the last year, we’ve made an effort to make sure we’re saving everything we can on the big-ticket items in our economy. It’s great to save 10¢ on a loaf of bread, but nobody’s going to pay for baby’s college by doing that alone! In particular:
* When we had the chance, we refinanced our mortgage with a no-fee lender and locked in thirty-year rates, to minimize our payments over the long haul.
* Ditching our second car doesn’t just save us a tank of gas now and then: it puts at least $1500 a year in our pockets.
* Our home-owners’ insurance provider’s rates were creeping up every year, so we kissed them goodbye, and by “asking around”:http://www.bradfarris.com/ we found a great agent who is saving us over $1000 a year — and for better coverage!
* We recently took the opportunity to install a high-efficiency furnace and air conditioner. The savings will pay off the slightly higher cost in around three years — and it’s all gravy after that.
*Spend it when it’s worth it.* The cheapest thing isn’t the only thing. For instance, we’re using reusable cloth diapers, even though they’re more expensive than disposable ones. We live in Chicago even though it could be cheaper to live elsewhere. And we eat Dove bars! The whole point of living within a budget is to live *well* within a budget. Saving money isn’t everything.
Every household is different, so part of the trick to getting thrifty has been figuring out how *our* household could get thrifty. Being self-aware, patient, and generous with each other (and ourselves) has kept this process from feeling like stinginess, scarcity, or punishment.
We are guessing that lots of you have tips on saving money as a family. Will you share them?
(Props to Keri M. for suggesting the idea for this topic!)
We use Quicken to manage all our finances – it can be a pain to setup, but once you get it going it is extremely helpful (it automatically downloads all our banking and credit card transactions, I then classify them according to our budget and we can run reports to see how we’re doing).
We use our credit card to pay for most everything because it earns us frequent flyer miles (we pay off the balance monthly to avoid finance charges). The benefit of the miles for us is that James’ family lives in Texas, so this makes for an affordable means of visiting them.
The only thing we don’t use the credit card for is for dining out. This seemed to be the one budget category where it was really easy for us to overspend, so we implemented the envelope system – once a month I take out in cash the amount we budgeted for dining out. When it’s gone it’s gone and we don’t overspend.
Some other things we have done to cut down on expenses:
– switched to a pre-paid cell plan. We like having cell phones for the ability to always get ahold of one another and in case of emergencies, however, even when we were on the most minimalistic monthly plan, we used no where near the allocated minutes. So, we switched to pre paid plans and paid $100 each for 1000 minutes which don’t expire for a year. We did that probably 9 months ago and still have plenty of minutes left. It works out to be about $16 a month vs. the $60 we were spending.
– switched to DSL. When we first moved into our home, DSL was not available so we went with a cable modem. When DSL became available and they offered a special of $14.99 a month we made the switch and saved a bunch.
– turned down the water heater. I’m not sure exactly how much this has saved us, but I’ve read that it can save you a bit because you aren’t paying to maintain a higher temperature water. Plus, it’s recommended to set the water heater at 120 degrees when you have children to avoid the risk of scalding.
– bargain shop for baby clothes. I buy most of Benjamin’s clothes at Sam’s club or on clearance because they are significantly cheaper. I can usually only find a couple outfits at a time, so I’m pretty much always shopping for the next size/season of clothes. That way, by the time he needs them, I have enough. Also a good idea – garage sales and hand-me-downs from friends who are done having kids.
– freezer cooking. I bought a cookbook called “Don’t Panic – Dinner’s in the Freezer”. My mom and I will periodically get together and spend an entire day cooking meals from this cookbook which are designed to be frozen. The way this saves money is that in preparing the meals, it’s easy to split them into the correct size portions for our family. So, a recipe that makes 6 servings gets split into 3 frozen portions. When I cook it at a later date, I’m only making enough for the 2 of us with no leftovers which don’t always get eaten. This also saves us money because we can take advantage of sales on things like chicken breasts by making a bunch of meals with chicken in them. There is also the huge benefit of easy meals later on down the road. I generally prepare 3 frozen meals a week and cook the rest from scratch. This makes my life much easier! The only thing with this plan is that you really do need to have an extra freezer or you would have to cook in smaller batches so as not to use up your entire freezer! If you don’t have time to spend a whole day cooking, you can modify the plan to prepare one of the meals for a regular dinner, only you make 3 times what you would normally prepare and then freeze the extra.
I love to shop second hand stores and consignment shops! Although the second hand stores seem to work better in our budget. A little game that I like to play is to find out what color tag is half off and try to buy things only in that color! It is like going on a quest!! One of my favorite shops in Chicago is the Villiage Discount on Roscoe about a mile from Lane Tech. The only draw back is you can’t try things on! I look at the toys and books as well….Check all the parts…..I throw plastic stuff in the dishwasher top rack for a quick cleaning. Kids books I wipe off the cover with a baby wipe…board books I wipe all the pages.
Aldi….yes when I lived in Chicago before kids I cringed at this…..I kind of felt like it was the poor mans store…..But I have found that it is really good for basics…..baking powder, nuts, tomato sauces,….Breakfast cereals…..milk eggs….The quality on things is pretty good…..some is great. They currently have a line called Fit and Active….which has some tasty things. If you go, dont go on a Suturday…the line are always very long…. One of the things that helped the image problem I had with Aldi was my trip to Ukraine. I saw people carrying Aldi bags all over…..My brother (who live in Germany at the time) told me of course Aldi is a German store and the Ukrainians love the handled bags. After that I always felt a bit “European ” by shooping at Aldi.;)
I love to cook and good spices are great for that. I have bought spices in bulk since we were married…..Devon Ave is good for that….there is also JD Mills in Evanston.
Lincolnwood produce on the corner of Devon and Touhy seems to have really great prices. If you are planning your meals you could plan to get some of your things there. I always looked at the produce and meat prices there
The public library is great for Movie rentals. IF you watch alot of movies…Net Flics or Blockbuster through the mail are great…..and there are no over due fines.
I am sure you know about all the free things you can do in Chicago…but sometimes being intentional about them is hard. Concerts in Grant Park, museum free days, the theaters where you can usher and then see the performance for free….The public libraries also have passes for all of the Museums…..you check them out with your library card….this takes a little planning and you may need to call around but worth it. If when Lucy is a little older and you decide to get a museum membership somewhere I would recommend one that has reciprocity at several places….it is well worth the money.
Also as Lucy gets older there are all kinds of wonderful parks with sprinklers and free public pools for summer fun…..Places with pools….Portage Park, River Park, Gompers Park….Indian Boundries has a sprinkler and a wonderful playground. Oz park is also very nice…that one is down in Lincoln Park.
Thanks for encouraging good stewardship! I look forward to reading other posts.
Hooray for your budget! We aren’t nearly so organized but have made some cuts that make a difference.
I keep intending to do the “dinner’s in the freezer” route more often! Must….get…organized…
I’m guessing our #1 way of saving money is that we never bought a TV. Definitely not the solution for everyone, and we did it for other reasons – but as a fringe benefit we don’t hear as quickly or as often about the things that we would otherwise have suddenly wanted or “needed”.
Related to that, we called/emailed all the companies and cancelled all our catalogs a few years ago. Oh, um, except for the gardening ones for me and the hot rod rebuild ones for Daniel. Ahem. I guess we still have a ways to go ;o) This goes a long way towards keeping the clutter down in our house as well.
Thinking… let’s see, nearly all our clothes are hand-me-down or thrift shop. Much easier to get away with that in the UP than in Chicago though, there’s no dress code here :o)
We sold some stock my grandpa gave us and used it to pay off our house mortgage. We could argue all day about which was the better investment in the long run, but it’s great not to have the house payment. We set the house payment aside to buy a new car, so that we wouldn’t have a car payment when the time came. For future investing we bought Austin Pryor’s book on investment (can’t remember the title… it’s loaned out) and followed his easy commonsense advice. It’s like the next financial step for “rich” Christians (such as 99% of Americans) after they take all of Larry Burkett’s advice.
I swore off soda and switched to sun-brewed ice tea, and after a year of “suffering” and missing the Coke, I don’t notice anymore and actually in fact prefer tea.
Sunday is our “soda day” and “movie day” (a borrowed DVD, shown on our computer) which puts a positive spin on the limits we set for the kids.
Bought a side-load washer which uses 1/3 the water and less electricity and detergent… and actually cleans and spin-dries the clothes more thoroughly than the top-loader we had before, which means less dryer time. Another case of “spending the money when it’s worth it.” No, we don’t do clotheslines outside yet. ;o)
I guess the only really unusual thing we do to save money is using dry soy meat for some of our spicier recipes (lasagna, tacos, chili) – from dixiediner.com. It doesn’t taste good, nor like real meat, but we’ve found that we don’t notice when it’s a smallish amount in spicy foods. Costs less after re-hydrating, no fridge/freezer costs involved, and it’s healthier too.
if I remember any other easy or interesting ones I’ll pop back on and share them but I think that’s most of it.
Just a thought about staying within the Chicago “Dress code” or stylish with thirft shopping is some window shopping at places like Fields….than you can have a senseof what is current ….colors…and have fun building.
There is a great book – “The Tightwad Gazette” by Amy Dacyczyn (pronounced “Decision”). The book is a collection of newsletters published about 10 years ago, but it is filled with a lot of ideas and tips. (In true tightwad fashion, you should check it out from the library instead of buying it from a bookstore or amazon.com!) What I really liked were the short essays that are really thought-provoking about WHY it’s better to consume less/waste less and reuse things/save more instead. It has really changed the way I think and my overall attitude about saving.
Also, Ann, remember that even with expensive cloth diapers, Lucy should be potty-trained several months earlier, saving several boxes of disposables & pull-ups. Plus, your next kid(s) will be diapered for free (except the cost of laundry). That will be a HUGE savings over buying thousands of disposable diapers! :)
Let me add that, if anyone would like to try out the database we developed to manage the “virtual envelopes,” please let me know. You’d need FileMaker Pro, which is available for either Windows or Mac, but I’d be happy to give you a blank database to use. (Please: only people known to us personally.)
My tightwad gazette is earmarked and filled with scraps of paper marking all of my favorite tips and recipes. The $20 book has paid for itself so many times over!
We cut our income in half when we decided that I would stay home and care for the babies, so we’ve had to be intentional about finances. I’ll say that we’ve been extremely blessed and, while we live a very frugal lifestyle, I truly feel like my life is rich in many ways! Here are some things we do to make ends meet:
We don’t own a TV and we throw out the newspaper ads immediately because I don’t like to be advertised at.
We cloth diaper and used homemade wetwipes for awhile.
All of the girls’ clothes are either hand-me-downs, gifts, or from mom-to-mom sales.
We ask for gift cards for birthday and Christmas gifts (for clothes or restaurants).
We use a credit card for most purchases, pay it off every month, and use the points to request gift cards to fund home improvement projects or other fun purchases.
We grow things we know we’ll eat: asparagus, cherry tomatoes, lettuce, butternut squash.
I make my own cleaning products (50/50 vinegar/water, cleans most surfaces) and use a foam dispenser for hand soap (refills with 1/3 of the softsoap).
We give lots away to Purple Heart and save the receipt for a tax deduction.
We cook from weekly menus and grocery shop from the resulting list.
We rent movies or get them from the library, rather than go to the theater.
We go to storytimes and other library programs, for toddler entertainment.
We have tried to eliminate the word “new” from our vocabularies, in hopes to instill a realistic, humble mindset in our children. For example, “let’s wear that new dress from Grandma” becomes “let’s wear that special (or pink or long) dress from Grandma.”
We go for walks every night that we can, which is good, healthy, family-centered entertainment.
We have areas in which I’d like to do better: freezer or Once A Month Cooking, college savings for the kids, retirement savings for us, and I’m sure some more that I can’t think of right now.
A great book that focuses on the real spirit of stewardship is called Living More with Less by Doris Janzen Longacre which is put out by the Mennonite Central Committee. It talks about how to live more (abundantly) with less from everything from food, celebrations, church gatherings, travel, housekeeping. Most of it is testimonials from Mennonite missionaries. There also is a More with Less Cookbook. You can get a copy as well as several fairly traded international goods at Ten Thousand Villages in Evanston on Main Street. An especially good place to go for Christmas gifts that are unique, and while not always the least expensive, proceeds go to a good cause.