I had a visit from my family over this past weekend which was so much fun. I finally got to meet my future brother-in-law and Mr. JD and I love love love him. While they were visiting I came to some realizations amidst all of the fun; I need to start saving for 1) my sister’s wedding in France (her fiance is from the French countryside) and 2) my mom’s inevitable retirement. Also—and somewhat related—I realized that people can be really disgusting, have zero integrity or accountability, and love to make assumptions, but that’s a story for a different day because I wasn’t going to let anything ruin my family being here :).
As I was saying, most people believe that their parents will spend their golden years with a robust retirement, but that’s just not the case for everyone—I wish it was! For example, because of my unaccountable (and estranged) father, my mother has very little savings and she’s past the age where she can technically retire. I want her to be able to stop working when she wants and live comfortably, so this is something I have to start budgeting for. Luckily I have help from my sisters, one is a vice president at a hedge fund and her fiance is an architect—my other sister manages creative content. We will all be in the position to chip in, but I also have to think about my in-laws and my sister-in-law, who has medical needs. Everyone needs help at one point or another, especially in retirement and I want to be able to provide that.
Because I want to be able to take care of my entire family and can only count on limited amounts of help, Mr. JD and I are going to do the best we can to budget more than we normally do.
Here are 5 easy step to start a budget or strengthen the budget you already have:
- Get Organized: At work, I have binders for everything and my budget is no different. I happen to like this free printable from Printable Crush—it has almost everything you need to get on track, including: monthly budget, expenses, schedule, and meal planner. The only thing is doesn’t have is something to track your student loans (which can be complicated, but we’ll get to that later).
- Track It On the Go: Everyone has to have extra spending money for clothes, toiletries, etc. This can get out of control really fast so I suggest giving yourself a set amount of personal spending money and then track it using Trello. I make boards for line items in my budget and then as soon as I spend money I make sure I account for it so I know where I am at on a weekly basis. Trello also has an app, so you’re mobile on the go! And the best part? It’s FREE, which means it’s budget friendly.
- Pay Down Debt With High Interest: This depends on the debt you have, generally credit card debt is going to have a higher interest rate than your student loans, but it really just depends. Paying your high-interest loans and lines of credit down will free up money to pay down other debts, make investments, or just save. I created this Student Loan Payment tracker because most of the time people have multiple loans with different interest rates. I always try to round up and pay at least $10-$40 more on each of my student loans every month.
- Save For Emergencies: Saving 10% of your paycheck is crucial, this way you will have savings on hand in case you have a astronomical vet bill, insurance premium payment, doctors visit, etc. There is no worse feeling that having your budget be blown out of the water and/or not having cash-on-hand in case of an emergency. Typically, Mr. JD and I save between 10% and 15% of our monthly income, but we will be bumping that up a bit so we can help our family in the future.
- Decrease Your Required Payments: This is important because low payments are so attractive when you really want something with a big price tag, but financing isn’t always the answer. Also, there is an opportunity cost that comes with everything. I was talking to my sister over the weekend and she was talking about how she disagrees with people who have upwards of 8 kids (because she saw a gaggle of kids at a Museum we were checking out). Her argument is that, just because you can provide food, clothing, etc. doesn’t mean you can provide the attention and care that each child needs. This is where the term “opportunity cost” comes in, meaning, just because you can afford payments for something doesn’t mean you have the time to invest in it. My best suggestion would be to keep things you have to make payments on down to things that are invaluable to your everyday life…like a car, perhaps a house and maybe not-so-much a giant jet ski or flat screen tv. For me, this means putting some of the big projects that I wanted to do on hold, like an in ground pool. We can certainly afford to do it, however, we don’t have the time to fully enjoy it or take care of it…maybe in the next house we buy! 🙂
I hope these tips put you on the right track to budgeting, it’s hard work and takes time, but I know you can do it—it works well for us, in fact, we’ll send you a post card from Paris next summer. ❤