Wednesday, 24 October 2012

Domestic Budgeting

Merry meet everyone!

Today I'm going to tackle a very practical but slightly unfashionable subject; running the household finances.  Now stop yawning at the back there!  This is a really important thing to learn to do, and in a recession it can be a life saver.

Back in the UK, we knew how much was coming in, how much would go out, and kind of made up the rest.  One of the roles I decided to take on now we're in the United States and I'm not working was to do the budgeting for the household.  In these days of easy credit, many people would maybe get a new credit card or a loan, but that is rarely a good idea.  I say rarely, because loans do have a place in a carefully budgeted account.  Nobody I know can afford to buy a house through savings alone, for example, or a new car, and credit cards do offer extra protection when purchasing items over £100.00, certainly in the UK at least, and if they are paid off in full each month it can be a good emergency back up.  Here I would like to point out clothes and cinema trips, even holidays, are not emergencies.  Now I'm no saint; I've had credit cards before, always just one, and I've used it.  At one point in my life, my finances were a mess having come out of a relationship and having no money saved.  I was living hand to mouth; my wages would clear my overdraft and put me a few pounds in the black, then my bills would come out and I'd be back up to my overdraft limit with no spare cash for things like food and petrol to go to work to earn the next months pay.  It was a vicious circle and I ended up taking out a credit card to buy my groceries so I didn't starve and petrol so I didn't get sacked.  In the end I sold the house, moved to Devon with my parents and one of my brothers and started a new life, using the money from the house sale to clear my debts.

Most people will mess up their finances at some time or other, and once you're in debt and unable to control it it destroys your soul.  I won't have my married life go down that route, so I am taking a leaf out of my Grandmother's book and budgeting.

My Gran didn't work outside the home, instead she raised the children and ran the household.  She kept a notebook and all expenses were logged.  My grandad would hand over his pay packet, or later in life go down the post office to draw out the pension and give it to gran, who would enter the amount in her notebook, put aside the money needed for bills and the rest, in cash, was what they could spend on groceries and treats - my grandad was a fiend for softmints!  She showed her notebook to me once, and it was fascinating.  She had drawers full of these books, and everything had been listed; she could show how much a loaf of bread had gone up, and a pound of mince.  She knew to the penny how much they spent each month, and was always able to save money for christmas, birthday presents and emergencies

With this in mind, I have registered for internet banking and got myself an account notebook.  This first month has been chaos financially, so we don't really know how much my husband will take home in dollars, and we are waiting for the first full month bills so we know how much we are spending, but everything will get recorded in my book.  Our groceries are a bit expensive because we are having to buy all the essentials again - spices, flour, herbs - but it seems to be settling down at a rough ball park figure so I can guesstimate how much I'm going to have to keep aside.  It looks like a full tank of petrol lasts my husband about a week, and if prices stay fairly constant I can set aside the money for that as well.  Our renters insurance is less that $10 a month, and the car insurance has been paid in full, so I need to set money aside for the next time.  I also want to save money for christmas and for when my family come to stay in March next year.  So every month I will record how much comes in, and how much goes out, so we know how much spare we have to spend on niceties such as meals out, DVDs and our hobbies.

Both my husband and I have been in tough places financially, sometimes because of inexperience, sometimes because of circumstances, such as a couple of years ago when I had to spend three months on sick pay after a foot operation, and I refuse to let that happen again.  Money can't buy you happiness, but I have known the misery of poverty, the stress it places upon even the most loving relationships, and I will not see my marriage go down that path.  My husband vowed to always look after me; this is my way of doing the same.

OK, lecture over.  Let's see how much money I can afford to save for Christmas and Yule presents :)

Blessed be )0(