At the end of July, we were in the black, but we were only beginning to dig ourselves out of the financial hole we had dug for ourselves. The name of the game in the fall was to work out the kinks in our spending plan along with building up a small emergency fund to serve as a buffer against a small, annoying fellow named Mr. Murphy.
He came for a visit about five weeks after we put new tires on the car (bought with money loaned from our family). Fortunately, we had started putting money into a non-designated emergency fund and other designated savings, so we had the money to replace one of our new tires when it got a hole in the sidewall. (Yea! A win!)
Meanwhile, we were working on our budget and spending. Groceries, eating out, and “allowance” money are the categories that give us the most trouble. We never seem to budget enough for groceries, we eat out more than we’d like, and we seem to be in denial about how often we eat out at lunch or meet friends for coffee during the month. Plus, there are several categories (e.g., gifts, vacation, media, babysitting, activities — pretty much anything fun) that we often cut entirely when planning our spending because the money needs to be spent elsewhere. Even now in November, we’re getting closer to finding the “magic number” for these categories, but I think we’ll constantly be tweaking them.
All in all, we have cut our spending considerably in the last four months, and we have a plan for where our money is going before the month begins. And that, my friends, is progress!