Another newbie - needs some encouragement!

iVillage Member
Registered: 08-06-2007
Another newbie - needs some encouragement!
9
Mon, 09-09-2013 - 2:41pm

Hi,

Our family of 4 lives on 1 1/2 incomes (I work about 20 hours/week).  We have 2 children, ages 5 and 3.  Our budget is very tight but we were always living within our means.

Anyway, last month, we suffered a huge unexpected expense because of our car.  My husband refused to ask his family for help (embarrassed) and I wouldn't ask mine (they already started college fund for our kids.)  I ended up having to borrow from our line of credit at the bank, which we have never done before.

I do most of my work from Sept - May so our income at the time was significantly less.

Also, we do not escrow our taxes, so we have this $4000 bill due at the end of this month.

Finally, my husband and I run a successful business from home but that requires us to buy our goods before we can sell them to make a little profit.

So right now, we have those 2 large expenses to pay off by the end of September (though I am aiming for end of October so I am not overworked or disappointed).

I am unhappily having to cut expenses everywhere.  No more going out to eat (and all I mean is going to to McDonald's so the kids can play in the play area!!)  I am not even buying coffee there anymore, which I used to love to drink while doing my work.  I think what hurts the most is having to cancel my daughter's dance classes.  Honestly, she doesn't even seem to care but I feel like I cannot keep up with our neighborhood families who have their kids participating in so many activities. I don't have to live up to the other families but still.....the guilt sets in.  No swimming lessons or gymnastics for the kids until after the debt is paid off.

I am spending more time selling items now too.  I am preparing for a consignment sale of children's items, which can hopefully bring in several hundred unbudgeted income dollars.  Hopefully I can push myself harder to sell more items on craigslist too, though I feel like I have no spare time.  My husband is also spending more time on his business to bring in more income.

Sorry for the long letter.  I had to get all of this off my chest.  It's been a tough 6 weeks of making decisions and cutting expenses left and right.

 

Gisele

Community Leader
Registered: 07-26-1999
Mon, 09-09-2013 - 3:36pm

Hugs Gisele!!  It sounds like you guys have been doing pretty good.  Did you have an emergency fund set up for things like this?  I can understand the feelings about the kids lessons.  I was always getting questions from people wondering why at 4 and 6, my kids had never been in an lessons or organized sports or anything.  It was an easy excuse for me at the time, my oldest was in her senior year of high school last year and did competitive cheer (which she paid for entirely on her own) and I didn't want to spend our last year with her here juggling both her commitments along with commitments for the little one that could obviously wait a bit longer.  If you daughter doesn't seem to mind, I wouldn't feel guilty at all about, she will have tons of years to do things.

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Avatar for mahopac
iVillage Member
Registered: 07-24-1997
Mon, 09-09-2013 - 3:54pm

Welcome, Gisele.  Sometimes it helps just to know that you are NOT the only one.

When my third child was born, I had to make my oldest choose between gymnastics, swimming & karate because we simply could not keep up all of them with the additional costs of diapers & food for an infant.  I was relieved when he chose karate because it cost much less than the others.  I also did not push him to practice his instruments and let him drop them both in middle school, to save money on lessons.

Fast forward to the present:  he is 21 years old and appreciates EVERYTHING he has been given - which is considerable.  We went from being slightly in debt when he was young to being $100K in debt when he was 12yo, to getting out of it when he was 16yo.  He has since been able to go to a private university with zero debt because we paid for it.  All that stuff about how kids aren't invested in doing well at college if they don't pay for it themselves is nonsense - DS will graduate summa cum laude this year because he worked his butt off because he knew how hard DH & I had worked to make it possible for him to go there.

So, from the other side of the hill, I can say:  don't fuss about what others do.  Your children are little.  There will be time enough for them to take up activities later.  Unless they are prodigies, they aren't missing out on anything.  DS didn't take up karate until he was 9 and then it was like he had found his niche.  DD didn't start cello til she was 9 - ditto - and for a time that was free because she got the cello and lessons at school.

When you feel debt-fatigued, come here.  Everyone here knows how it feels.  Probably the happiest day of DH's life was not our wedding day or the birth of a child, but the day he realized he could buy a cup of coffee without feeling guilty about the dollar.

iVillage Member
Registered: 11-14-2008
Tue, 09-10-2013 - 4:15pm

Hi Gisele,

I also recommend the emergency fund of $1000. Saving this before paying extra above minimums means you are prepared for things that break.

However, once you start making a budget, taxes and car manintenance should be included. These are things that do happen every year so divide the property taxes by 12 and put that much away every month for when they are due. It takes the stress out of the situation. 

And car repairs also happen, not all the time but they will eventually happen, they always due. A car maintenance line on your budget is also necessary. I recommend putting  $100 a month away for this kind of spending at first. 

I think the McDonalds play place is one of the cheapest bang for your buck places to go if you need to get out. A coffee and small snack for the kids is cheaper than a movie or things like that. Do you have a mall with a play place near by? you could bring your own coffee and snacks to that one.

Don't cut out everything or you won't stick with the debt repayment. 

Good luck, come back often!

iVillage Member
Registered: 08-06-2007
Wed, 09-11-2013 - 9:59pm

So every website I log into and all of you say that what we really need is a budget and to put money aside.  I have known that for half my life but I guess I always felt that I was too "smart" to need to do that.  And by "smart" I mean that I thought I would never overspend.

Maybe the truth is that I am scared or nervous to know where we spend our money and to have to tell my husband that he has to stop spending money.  I have always been the one overseeing the money even while we were dating and wanted him to be able to spend those dollars he worked hard to earn. I want him to think of me as the perfect accountant wife but I have to admit that I need his help in curbing our spending.

Starting tomorrow, I will write down every penny each of us spends and see at the end of 1 1/2 months where our money went.  This should give us an idea of where we can lower our spending in order to save each month.  It's going to be really really difficult; I can already feel that.

Community Leader
Registered: 08-25-2006
Fri, 09-13-2013 - 1:03pm

Sounds like you are doing great!  Do be careful not to cut back so much that you are miserable.  Spending that dollar at McDonalds may be worth every penny. 

And I would not worry about no dance lessons at the age of your children.  I realize that yes, some activities are better served starting young, but not everything is that way.  Three and five is still young.  It sounds like you are already pretty savy at finding free things to do, so I am sure you already take advantage the public library and stuff like that. 

On a side note, if there are activities that you are wanting your children to try, do a little homework on it now so you can budget accordingly.  Even activties at public school cost money, so if your budget is tight and you refuse to go into any debt, plan now.  For example, volleyball at the Boys and Girls Club is $80 and they have two seasons a school year.  Plus most girls want new shoes, etc.  Things like that you can get a rough idea ahead of time.  Lastly, ask around which sports or activities really need to start young, and which can wait.  Personally, I don't think Pee Wee football is necessary or that basketball needs to start at 6.  But things like baseball can be helpful if started by the time they are 8. 

Anyways, got a little off topic there.  You are a smart cookie and I am sure you will figure it out.  :)

Serenity CL making a second marriage work

Serenity
Avatar for mahopac
iVillage Member
Registered: 07-24-1997
Fri, 09-13-2013 - 2:26pm

A couple of thoughts here:

First, 1.5 months of tracking where every penny goes isn't enough time.  It takes about 6 months for things to show up like the school book fair (once a year), a baby shower, a major car repair, a minor home repair, printer ink, seasonal expenditures, etc.  You have to track all those things because those are the things that throw us. 

Second, your husband's hard-earned dollars are the FAMILY'S hard-earned dollars.  No one person gets to decide how they get spent - not him, not you.  Money decisions have to be made by both people.  In a one-income marriage, the person who earns money has a role, but it's not a better role or more powerful role than the person who stays home or does the majority of day-to-day spending.  I am the sole breadwinner in my family, DH is the SAH parent, and while I make the big financial decisions, he does most of the day-to-day spending.  As much as I'd like to say "I earn the money so I get to buy what I want," there are 4 other people in this family that I am earning money for, because they can't earn it themselves.  Until they can earn it themselves, my money is OUR money.

Thinking that you don't need a budget because you're too smart is like not asking questions in class.  The smart ones are the ones who sit up front and ask all the annoying questions to make SURE they know the material.  The people who make the best use of their time are the ones who plan their time in advance.  And the people who have money are the ones who know where it comes from and where it goes and have a plan for it.

iVillage Member
Registered: 12-31-2010
Sat, 09-21-2013 - 4:14pm

Gisele -

Weclome, everyone here is right on the money.  My DH and I make well over 6 figures and we have a budget - or what I like to call a SPENDING PLAN.  We save each month for emergencies and annual expenses.  

I have my own firm, so recently I did have to go in debt for the firm, and it was really hard, but like a mortgage, debt that helps you move forward iis good debt.  Even major firms issue bonds to fund expansion, let alone stock!!  

Did you ever think of small business loans for your supplies for the business? The SBA has good rates for female owned businesses and I honestly consider this GOOD debt, as long as you have a business plan and use the money wisely.

-Marie

#Marie
iVillage Member
Registered: 08-06-2007
Tue, 09-24-2013 - 9:40am
I agree about the 6 months of tracking expenses. It's just so HARD though!! My purse just spills out bills everyday and then I have to log them. UGH! But you're right. My husband needs to sit down and look at these numbers too so we can make a plan, instead of his favorite activity of jumping up and suddenly saying, "Let's go on a trip!"
iVillage Member
Registered: 08-06-2007
Tue, 09-24-2013 - 9:42am
Thanks for the idea Marie. To tell you the truth, I never did think of getting a small business loan. I will definitely have to check that out. Our business is doing very well but it's moved much more quickly than we had expected and now our personal and business expenses are all mixed together, which is not good.