Mom’s Family Budget Challenge

This month our family decided to see whether or not we could scale back drastically from our spending. After tallying all of our expenses and seeing what is leftover we were shocked at how much we spend at the grocery store and on other “incidentals.” Given the state of the economy and the price of gas, we have set ourselves quite a challenge this month - to live on $20 dollars a day. I will be chronicling our progress and sharing cost cutting tips with you as well. Hopefully we (and maybe you) can learn ways to recoup money and put more into savings, and less into other people’s pockets. So here are the details of our challenge:

1. We are paying as many bills as possible at the beginning of the month. That doesn’t leave much left, which is the point really. When we were spreading the payment of our bills over the entire month we noticed we weren’t capturing the “left-overs” as we should be. So now we hope to put the money from the middle of the month in our savings account.

2. If we know we have a monthly expense, such as gas, or church offering, we now consider this a bill that we have to budget in. This way we have a more realistic idea of how much money we really are spending. 

3. We now are going to earmark any amount that we have left after paying bills as “family savings” so that we start to see any excess in the month grow - not be spent.

4. Once we pay our bills - we are going to use cash. Why? Because we realized that debit and credit cards were divorcing us from the value of money. If we were using a plastic card to pay for expenses, we were hardly noticing where the money went, and we were always shocked to see the end of month statement (how many times have we said - “did we really spend that much?”). Another reason to use cash is because if you pay cash for something you are more willing to scrutinize your bill, use coupons, and want to hold on to as many bills and coins as possible.

5. We set ourselves the average of $20 a day to live on. That figure needs to include groceries, going out, hair cuts, toys, books, and dry cleaning.  If we have money left over that day it goes into a “piggy box” that we can borrow from another day. If we run out of money for that day - too bad (unless of course we deem something as an emergency). That means we need to use a bit of fore planning - do we need to do the dry cleaning? If yes, then we know that day the money will go to the dry cleaners and not the grocery store.

6. We are going to start paying attention to where our money goes. If you only have $20 a day and you realize you are spending $5 on gas just running everyone around, then you might think about walking, biking, or limiting trips (which is exactly what we have done).

7. We are going to save our pennies (yes, and count them too). Honestly, my husband is going to pick up coin wrappers from the bank today. I remember as a kid it was a special treat to wrap up pennies, nickles, dimes, and quarters - all the excess change - and deposit them in the bank.

8. We are taking the time to comparison shop, examine receipts, collect coupons, take back cans - i.e. make sure our $20 goes as far as possible.

9. We are cutting back on what we now see as “luxury items” - that means “non-essentials” - including (sniff sniff) chocolate, any bottled drink, gum, condiments, magazines, lattes, etc., etc., etc.

10. We are changing our psychology about money and hoping it makes a difference! Every time we buy a latte that costs $3.50 that is actually $5 we had to earn in our paycheck before tax to pay for that latte. Does that mean we can’t have a latte? Of course not - but it means we will make it a treat not a norm.

We realize that some families don’t have the luxury of $20 a day nor the time to make sure that it is well spent - but for our family we knew that we needed this sort of challenge because with two full time professionals in the house we should have more to show for all of our work. We want our children to realize that money spent comes from money earned - and if we can’t do this, how will they ever be able to? So here goes Mom’s Family Budget Challenge. Wish us luck, and share your cost saving ideas with us, as we will share ours with you - because honestly every penny counts!