Recently my wife and I decided to start budgeting. With a second child on the way, we’ve made the decision for her to stay home after the baby is born. We’ve weighed the pros and cons and though we ultimately lose income, we feel that the benefit for our family will justify this transition. The plan is for her to be home for about 5 years, and then to return to working full time. So, for the past couple of months we’ve been operating under our new budget model, just to try things out before it’s “real.”
While the initial month went fairly smoothly, we found ourselves at quite an impasse in the middle of month two. And by impasse, I mean a full-fledged heated discussion that resulted in two days of the silent treatment and serious reconsideration of our plan. Though we are still hanging in there, it is a work in progress. Here is our story and our beginner budget woes.
CURRENT INCOME: $96,000
NEW INCOME: $60,000
CURRENT MONTHLY SPENDING: $6,000
NEW MONTHLY SPENDING: $3,500
In hindsight, I should have realized just by looking at the numbers that it would be a significant challenge for us. However, since almost $1,000 of the monthly expense was childcare, I thought it would be much easier to shave off the other $1,500 in trimming unnecessary purchases and reducing our savings contributions as we have adequately built that up over the past few years.
What happened: My wife and I were both eager to for her to be home and that positive energy spilled over to our spending habits. We each made conscious choices about anything that we didn’t “need” for the month, finding it easy to say no when we had such a strong goal in minWe did not set any limits on groceries or gas and spent money on going out to eat or grabbing take out as we both work full time and don’t regularly plan meals. I also eat out regularly for lunch as I feel it helps me network in business. My wife has a fairly regular Starbucks habit that she continues to support (now in decaf) almost daily. We agreed to check this spending at the end of the month to see if there would be ways to trim this.
Still, by the end of month 1, we felt good about the direction we were heading in and optimistic overall about the feasibility of this decision.
What happened: The beginning of the month was fine, we managed to limit excess spending and stay well on track. The real problems didn’t start until the middle of the month.
We finally decided to look at the groceries, eating out and Starbucks spending that we had been avoiding. The results were shocking: we were averaging $800 at the grocery store, $240 eating out as a family, $150 for my lunches and $50 for Starbucks. The grocery store wasn’t the main issue, but it seemed as though we were overspending there plus still spending a lot of money on food, as in $440 per month!
Additionally, I had a golf tournament planned with some clients that had a $125 entry fee and my wife had scheduled a pedicure and hair appointment that set us back about $160.
And this is where things got a bit sticky. See, neither of us is particularly talented in the kitchen, and we certainly don’t know how to make a menu for the week with our busy schedules. I thought perhaps my wife would want to take this on once she was home, but she found this assumption somewhat insulting. She also didn’t see the importance of my golf game, and I questioned the expense of her hair and newly polished toes. Basically, the discussion took a turn for the worst with wounded egos on both sides and my wife didn’t want to speak to me again for about two days.
The rest of the month we both tried to spend next to nothing, which led to us feeling depressed and deprived. We had another talk about if we could realistically live on just one income.
What’s happening: We’ve regrouped and tried to take an honest assessment of our budget. We discussed that changes will have to be made.
We’ve agreed to work together on menu planning and meal prep, as well as to give ourselves one out-to-eat night per week to prevent burn out.
We’ve also realized we have to communicate about our spending. In other words, I can still participate in golf tournaments and my wife still needs to get her hair done, but perhaps not both in the same month.
DESIRED MONTHLY SPENDING: $3,500
ACTUAL MONTHLY SPENDING: $3,850
As I stated previously, this is a work in progress. We are close to our goal but not there yet. We aren’t giving up, but we’ve also realized going from two incomes to one is a big shift and is going to take some time to get used to for this family. Once the new baby is here though, I have no doubt we can dig a little deeper to make it happen.
written by: Jennifer Fitzgerald
About the Author:
Jennifer writes for SelectAware.com offering money saving tips for families on the go, including frugal living suggestions and sustainability options for everyday life.
Image courtesy of Sal Falko.