All I hear about on the radio lately, and it is the radio, I've given up on television news, is budget concerns. Boston is cutting library branches. Republicans are arguing that health care will overtax our budget. The post office is going to close on Saturdays. The new MBTA CEO will get a 40% reduction in pay equal to $170,000 less money annually.
The economic downturn has everyone scared, and nobody wants to give up anything.
I get it. I don't like cutting back either. It's hard not to spend money, and now that I'm used to my life the way it is, I don't particularly want my way of life to change.
So what should people, or governments, do when cutting out the frills isn't enough?
I sometimes look at a blog written by a woman trying to live the lifestyle of a middle class American on half the money. One of her recent posts discusses her methods, including backward planning. Know exactly how much you've got to spend and know what you can get for free or through barter.
I think a part of knowing your budget is also knowing exactly what you need. I'm not saying that you should go into debt to keep sustaining unsustainable things you believe you need. I'm saying that you make a plan, and prioritize.
We're flush for the moment, but that doesn't quite let us off the hook for a budget. My entire first paycheck went to pay for our kitchen renovations, and more renovations are on the way.
So what do I want? What makes me feel rich?
I want my husband and I (and the cats) to be healthy, and to have access to whatever medical treatments and facilities we need.
I want my 110 year old house to be in good condition, since it's not going to be "like new" anytime soon.
I want to be able to eat fresh, organic, locally grown foods, even if it means far less meet and more cooking, or even growing some of my own food
I want to be able to travel, to see friends, to see family, and to see new places
I want to be able to go to the theater, symphony, or a museum once in a while
I want the occasional splurge, be it a bath bomb from Lush, a cookie from Flour Cafe, or a bouquet of flowers from the local florist nearby.
If I have money leftover I want more art on my walls, more trips to listen to music, and new furniture.
I feel pretty rich right now, but I wonder how well I would do with a budget cut.
3 comments:
Is it backwards planning to start with how much you have to spend and then plan expenses from there? Guess I've always been backwards :) I planned my first car purchase around my starting job's salary (had to wait till I got my first paycheck to buy it), with a built-in plan to save $x for a downpayment on a house. Once I had the max amt I could afford, I began shopping for cars that fit.
Even now, when we're really fairly comfortable, we don't make any changes without a handful of spreadsheets to figure out how much its possible to spend, leaving some savings and/or padding, then decide what is most important to put the money into.
I'm nowhere near the poster that you mentioned ($347 mortgage payment? I wish...I think the amount we have to put away for taxes & insurance every month is more than that, and I thought the midwest was a cheap place to live...). If we had to, we could certainly get rid of some expenses (starting with a car), or trading "down" to a smaller house or one in a cheaper neighborhood (or, in this real estate market, buy a cheaper house to live in and rent this one since it'd never sell). Char is in a private school, which after 1st grade we could choose to trade in for public (if we had to move her now, they'd enroll her back in Kindergarten next year and bore her silly). There are certainly luxuries we could cut out or back (the cable/internet, for one).
I've occasionally done the emergency math, especially with hubbie working as a contractor (i.e. no job security). It doesn't sound fun, but we could handle it without resorting to credit card debt or defaulting on payments. For a while at least. My fingers are crossed that it won't come to that, though.
Our emergency math would have to include either renting our out place or getting a roommate. Our mortgage payment is more than my entire monthly income. We could buy cheaper food and go out to eat less, but overall, food is our biggest splurge. I guess trips to Europe would fall in the same category, but not sure how well that would go over. Both of us have cars that are paid off, neither of us have any outstanding debt (not even student loans anymore..woo hoo!)
Overall, we live within my earning are the icing on the cake. If we had to eat only icing, it'd probably be pretty tough.
Oops, need to change that last sentence. I was mid-edit and missed a piece. We live within my husband's means, my earnings are the icing on the cake. Just to make that clear.
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