Budget Update - Month 2 Lessons Learned

Whew!

Can't really say for sure what I was doing that I was too busy to update the blog, but June must have been a hectic month! Well, here I am and here's our update; better late than never:)

Continuing to learn as we go, we have tweaked our jar budgets a couple of times, as we recognized that we were consistently over-spending on food/personal care items, despite best efforts to shop consciously. We determined that we simply had not budgeted enough in this category and increased it by $50/month (making adjustments in other budget categories to account for this change). Since that change, we are doing much better. We also realized that it is a smart idea to get a little "ahead of yourself" in purchasing meat when grocery shopping (get meat that's on sale or "club pack" size and freeze it, so you have slightly more than what you need for a week). It's probably the most costly food item on your list, so it's handy to have a little extra in the freezer for weeks when there might not be good sales, so you won't have to buy as much and spend that extra money.

Another thing I learned is that Dave is GREAT at cooking tofu. Even if you buy the organic kind (which we recommend, since soy absorbs toxins very readily), it's only around $2.50 per block. Last week we used the one block of tofu in 3 meals! I'll get him to post his tofu nuggets recipe and I dare you to try it...it's fantastic!!

But I digress.

We also took some steps to lighten our budget load last month. Our roommate moved out and we no longer needed the extra bandwidth insurance on our internet bill, so we cancelled that and saved $15/mth. I also took my final driver's test and so reduced my auto insurance significantly. Similarly, I changed my life insurance policy, so I'm paying less per month. I'm also very glad to say that, after a pretty stressful couple of weeks, we finalized the refinancing of our house and paid down the high interest debts we had. We also managed to secure a very low fixed interest rate on the mortgage, so this was a smart way to get a handle on that debt load.

We're becoming more aware, I think, that this is something you have to be constantly conscious of and working on together. Mutual support is so important. We want to live within our means, but not limit ourselves. We want to be conscious of what we spend, but not cease to have fun in our lives. Balance is what we are striving for, and we are pretty close to achieving that. The budget, however, needs to be tweaked consistently to reflect the reality of our situation. I suppose it might be easy to do it once if we lived in a world with fixed and stable incomes and expenses, but these things fluctuate (with the phases of the moon, it seems...), so you have to look at it regularly and make adjustments.

Another thing we just decided to do is have a look at our bank account transactions at the end of each week (after we balance the budget binder/jars) to see what we have spent using our debit cards. We are trying to be vigilant in not using them unless necessary, but we don't have cash for every purchase. Briefly reviewing our account transactions will give us a picture of what we are spending and where, that is other than what is accounted for in the jars.

The last thing I want to write about is our child. We've decided to start teaching him about money, spending and saving, so I took him last month and opened a bank account for him. He decided for himself that he wanted to save 40% of his allowance each week. (I showed him 5 rocks and asked him if these were dollars how many he thought he would like to save, and he chose 2.) So he puts $2 in his piggy bank, and we will deposit this when he has a significant amount. His other $3 he can choose to spend on something, or save them for a bigger purchase, like a game or toy. He has a particular item he would like to get soon and so we calculated that it would take 13 allowances for him to save what he needs and then we made him a chart with little pockets on it to hold 13 loonies and 13 twonies. We will also give him opportunities to do "extra" tasks to earn an extra $3/task, so he can save his money faster. We think it's really important to teach him a healthy appreciation for money, how it it earned, how it is saved, and how it is spent. 

Well, that's about it for our update! More news to come on the Kitchen Revamp Challenge soon enough! Still working on getting the house in order (Purge! Purge! Purge!), so the garage can be put in order, so we can get started on painting those cupboard doors :)

Wish us luck! Ciao for now folks!!

-Erin and Dave