Smells Like A Budget In Here

This post was written as part of my application to be the Verity Mom for Verity Credit Union so it also appears online at www.veritymom.com.

Before I stopped "working for money" (my previous career) to "work for love" (become a stay-at-home-mom,) I saved a little chunk of change for use in case of emergency as we transitioned to living on one salary. Every month I would find myself writing a check from savings to cover any number of "emergencies"-- from date nights (cheaper than marriage counseling, I told myself) to new shoes (on SALE) and car repairs (okay, that truly is an emergency.) And yet I was surprised when I realized the fund was nearly depleted. How did that happen?! Wouldn't I have noticed the rapid decline? Well… the truth is, I didn't. Two young kids kept both my husband and me very busy and our finances were not getting the attention they deserved. We had made a few spending changes and I was proud that we weren't using our credit cards, but for the most part we were living like we did when we both drew a salary.

After a brief period of panic and worry, I reminded myself that living within our means is a choice. I knuckled down and went carefully over our fixed expenses and bank records and made a budget. Candidly, it was EYE-OPENING! We are fortunate to have enough money coming in to cover our daily needs, but we don't have a lot of wiggle room. A couple of expensive dinners out, a few thoughtless purchases and one of those ever-present unanticipated expenses and wham-o, we are over budget! No wonder the emergency fund evaporated.

Now we pay fixed expenses with our online banking and liquid expenses with cash that comes out of an old-school envelope system. In our family are certainly still learning how to use our budget muscles -- we've been out of shape for a while. It isn't easy, but the challenge is balanced with a great feeling of satisfaction. I know I am making good choices for my family and our future which brings me more pleasure than the convenience purchases I was making before.

Today, instead of buying a treat from a Starbucks drive-thru (a too-busy mom's snack salvation), we are having fresh baked cookies. The grocery store had Marie Callender's Chocolate Chip Cookie mix on sale for $1.79 so even when I add butter and eggs, I'm getting a dozen cookies for less than I would have spent on two cookies a few months ago. And a mix is still manageable for a too-busy mom. It isn't true every minute, but right now, living on a budget smells pretty sweet.

Checking, Savings, Trade School, Taxes

This post was originally posted on Blog Mamas on September 28th, 2006.

Although Jeep is only 15 months old, he receives an allowance. He has been getting a weekly allowance since I saw two pink stripes on a certain plastic stick. It isn’t a trust fund or inheritance nor do we have buckets of money – I just wanted to start a healthy money habit early.

Jeeper gets one dollar a week. In quarters. I put one quarter in each of the antique Bell jars that I bought when I was pregnant. The quarters aren’t for decoration although they do sparkle in their glass banks. I use quarters because it makes the math easier. You see, I distribute his allowance into four accounts: Checking, Savings, Trade School and Taxes. The money is for Jeep – and it is his to spend – within the boundaries of each account.

Checking is the NOW money. The “gum in the checkout line” or “poorly-made, over-priced toy in the gift shop” money. As soon as Jeeper’s brain can handle the logic of demand and supply, he can spend the money in his checking account as quickly or slowly as he likes. But he will also learn that Mama and Daddy won’t buy the gum or the toy for him (I can’t guarantee that Grandma/Grandpa or Nana/Papa will follow suit) so he will have to make his own choices and live with them.

Savings is the PRETTY SOON money. I don’t know yet if little Jeep will have a “burning a hole in my pocket” or a “miserly moneybags” mindset. Either way, to spend the money from the savings account he will need to check in with an advisor to get the purchase approved. The advisor’s role isn’t to talk him into or out of a purchase, but to be a touch point that reminds him of what he truly wants and values. Hopefully the savings account will produce many coveted toys and treasures while also teaching the sweet, sweet satisfaction of delayed gratification.

The Trade School account’s purpose is to make a dent in a future EDUCATIONAL endeavor. 25 cents a week won’t pay for books so we plan to supplement this account as we are able. Most likely and somewhat hopefully the future beneficiary of these funds will be the undergraduate tuition bill from a college or university. But the money is Jeeper’s to use for culinary school or a welding certification program or art school or an ESL certificate program in Spain or six years of community college courses or a PhD or whatever he chooses to pursue.

Earlier I wrote that Jeep’s allowance is for him and that he gets to spend it but that isn’t the whole truth because he has a jar for TAXES. We aren’t handing the fourth quarter over to Uncle Sam. The money in the final jar will be spent by our family (with Jeeper’s equal input) to benefit our home and our community. Family activities can be funded from this account (it is likely trips to Disneyland will be excluded) as are charitable contributions. One small way to remind him that with money comes a responsibility beyond yourself.

As Jeep gets older, I plan to increase his allowance to match his age. One dollar a week for each year lived, with ¼ still deposited into each account. The idea isn’t to fund Harvard tuition or pay for his first car, but to help him develop reasonable spending and saving habits while fostering independence and freedom. One shiny quarter at a time.