Money Honey

It’s no secret that home ownership has a pesky habit of taking all your moolah and making you wonder where you put it. This house, well, let’s just say it’s been all that and more, on steroids.

It started with the basement, see ya later $3,500!

Fixing Basement Wall with Ramjack

Then we moved on to a furnace. In July. In North Carolina. Just where you want to be spending your dollar bills in the middle of summer. Farewell, $5k – nice knowing ya!

Converting from Oil to Gas

And now we’ve got our kitchen, which after appliances, new cabinets and counters, will be setting us back north of TEN THOUSAND DOLLARS. I may or may not be weeping as I type this.

Cortina Counter Top

The good news is, we’ve gotten a lot of big ticket, necessary items out of the way on the front end of this house, which gives us 1) more time to enjoy said improvements and 2) less concern that a big old expense is looming around the corner.

Ok, scratch #2. There are always expenses looming. 😉

The bad news is that in the last 3-months, it’s been feeling like we’re hemorrhaging green backs faster than we can replace them. And I’m not talking the George Washington variety, I’m talking the Benny Franklin crowd.

The last two months, we’ve had credit card bills over $10,000. Y’all, I made less than that two months of spending my entire YEAR of working the first year out of college. That’s a lot of money, it’s too much money and it was starting to freak me out. Like whoa.

Now most of this spending was planned. We sold our Ann Arbor house at a profit and we were able to use that money for a solid down payment on this house, along with a bit of extra cash to help with these known expenses we’d have walking into this fixer upper of ours, but still. It wasn’t something I felt comfortable with and I told Jay that starting in August a new sheriff was in town. 🙂

Downpayment on House

When we did sell our house, we took about 85% of the profits to pay a downpayment on our new home, and squirreled the rest away to pay for pending projects. Overall, I’m super glad we kept some cash on hand to help with some of the more unexpected extra costs that hit us (ahem, washer 2.0), etc.

Jay and I have always been really big savers, so luckily we’ve been able to pay for all these expenses from our savings, but truth be told, watching our savings account whittle down these last few months has been a bit frustrating. I know that they’re all temporary expenses and I know they’ll all improve the value of our property, but still – spending that much money is just hard for me to stomach, yo!

In general, our monthly breakdown of where the dollars go, looks like this.

Budget Breakdown

That little pie above has been our general budget since we’ve both been employed, and it works out great for us. We treat our savings account as a house slush fund, too, so it’s general $$ that we throw into our savings account each month to use for unanticipated + planned house/life/other expenses. We always keep a set minimum in there though, as an emergency fund.

Even when we have really bad months, where I’m slamming my head against the wall, I’m so thankful for a few things Jay and I put in place early in our marriage that have really be crucial to being pretty financially independent at 27 years old.

Steps to Financial Freedom

1) Live Off 1-Income: Ever since we’ve been married, we’ve always treated my income as our “non-essentials”. Jay’s income pays for necessities, mine pays for all savings. We started using this strategy early on in our marriage to pay off $30,000 in student loans, and just kept bank rolling it forward to pay for house down payments, car loans, etc.

2) Save Early, Save Often: Our first influx of money as a couple was from wedding gifts. Instead of going out and buying big ticket items – we put the money in the bank. We’ve followed suite since.

3) Pay off debt! I felt overwhelmed by the amount of debt Jay had coming out of college (nearly $30,000) – but by prioritizing our expenses and consistently placing needs over wants, we did it. In less than 2-years. Did I mention I made less than $20k my first job out of school?! We were not in fancy well off jobs – very normal – very moderate pay! Any tiny bit you can do, helps! We started payments at $50 a month (before legit jobs) and then started using my income to pay it off quicker once employed.

4) Simple Living: If I could give any new couple, or seasoned couple, one bit of financial advice it would be to live as simply as possible with a lifestyle where only one income is needed. In our 5 short years of marriage, it’s made such a difference for us. If you can’t pay for it in cash – don’t buy it! (mortgages withstanding…) 😉

5) Identify End Goal: Now – not everyone wants/needs to be Bill Gates, right? Jay and I know we’ll always be looking to live a modest lifestyle, so although saving is the name of our game, we’re not looking to buy a yacht, ya know? If that’s your goal – that’s awesome! But keeping your financial goals in perspective can help to keep you motivated and going strong.

Creative Ways to Add To Income

 

One last thing I’ve found to be helpful with financial security – ya got to learn to hustle, y’all! Get creative! Figure out something special you can offer to generate extra income. Sell stuff on craigslist, babysit or do lawn work for neighbors, open an etsy shop.

Along that vein, last month was a really big month for me with my design business. As of the end of August, I’m going to be bringing in almost as much as I was making when I was working full-time. Whoa. Crazy, right?! It’s exciting, and it’s also been a bit overwhelming to learn how to balance the demand that I’m getting for my interior design service. I’m totally humbled, and definitely up to the challenge, but it’s been a pretty crazy ride this month – that’s for sure! Although it’s never easy to start a business, it is very rewarding to see what some hard work and dedication can do over 6+ months.

This is our first full month of being back on track, and I’m happy to report that our financial situation is finally back where it needs to be to keep us in the black. No more kitchen renos or furnace replacements for a while, that’s fo shizzle.

How do you guys keep your finances on track? Any tips and tricks to get into good financial shape?

3 thoughts on “Money Honey

  1. Wow, this post totally speaks to me! We are trying to live by those same principles, living off one income saving the other. We keep track of all our finances on mint.com, which I bet you would love since it seems like you also have a love for breaking down the numbers 😉 It’s so fun to see the months that we come in under budget and visually track that extra money going into our savings goals and stuff.
    Such good advice, love it 🙂

  2. Thanks for sharing – it is always interesting and helpful to see how other people track/manage their finances. I second Naomi – Mint is awesome! Renovating or simply owning a home will make anyone want to crawl back to the easy days of renting. Ahh, the lovely lack of responsibility 🙂 It is awesome what percentage you guys have allotted for savings and retirement. Bravo!

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