A budget without misery

We've adhered to a pretty strict, yet flexible budget since we moved to Kansas City. It was a chance to start new with big goals and financial commitments. Plus, we didn't have a whole lot of offers for dinners and happy hours meaning we could spend a lot less on entertainment.


Financial goals 2010


1. Find cheap rent without risk of getting shot every weekend.  Less than $600/month and no shootings yet!


2. Pay off all credit cards, and don't use again.  Done. See here.


3. Live below our means without being miserable. 
Continue to work on this everyday, and doing pretty good. We commit to free days as much as possible. We utilize Groupon for entertainment/restaurant discounts often and then bargain with ourselves. Example: We are going to Cirque de Soleil on Thursday with awesome tickets from GrouponKC (want to join? Let me refer you and then I get $10!) for a deep discount but in exchange we've promised to reduce our "eating out" budget for the month.


4. Continue to put significant amount of income toward debt.
Doing well! Exciting news on this goal coming shortly. Stay tuned, my friends.


5. Make budgeting easier.
We did this by creating multiple bank accounts with a bunch of automatic transfers accompanied by the help of mint.com and an Excel spreadsheet.

• We have a checking account for life.
• A money market fund which depending on the phase is a house fund/baby fund/can't find renters for the condo fund/buy a used car with cash fund/graduate school tuition. This fund gets two large automatic transfers from checking each month.
• A savings account for fun/travel and other things we love spending money on. *This account requires a deposit each month and only five withdrawals per year. Then the bank gives us $50.
• A savings account for little emergencies like car repairs, condo repairs and other things we really hate spending money on.

6. Cut out the fat. 

We looked at our financial picture - where our money was going and how that matched up with our values. We cut out the fancy gym ($105/mo) and went for a low-cost one. This allowed us to pay upfront for 15 months and save hundreds in monthly fees. We cut out cable TV ($100/mo) and instead use instant Netflix ($11/mo) and a HD antenna ($17 once). We stopped buying clothes except for special occasions. I don't know how much this saved but it's significant. 

We also budgeted $150/mo for restaurants which includes happy hours, Sonic or Starbucks runs and dinners out. This seemed to be the biggest denial, and now we aim to be very conscious in this area. It gets tough though when we take frequent weekend trips.

7. Follow Dave Ramsey's advice, "If you live like no one else, later you can live like no one else." 

Despite his tendency to make me cry, Ramsey's main principle is one we quote often and not just when it comes to money. We quote it when we see for sale signs in the yards of our dream houses. Or when we're stacking up crates underneath the bed or in the corners because we have no storage. Or when we are tempted to spend $50 to alleviate the annoyance of cooking. Or when we spend less on birthday presents or wedding gifts than we'd like to. Or when friends or family members continually has newer and better cars, houses, clothes or weekend entertainment.

And now living cheap and watching our debt subtract has become like training for a marathon - the daily challenges get easier, the weekend long runs still stink but the feeling when we finally cross the finish line will be fantastic. Plus, I think in both instances I will need a banana.