Planning

American Family Budget: The Wake-Up Call

American Family Budget: The Wake-Up Call :: Mint.com/blog

I have a dirty little secret. I live in fear of being invited to birthday parties or out to dinner, even to meet a friend for coffee or drinks. It’s not because I’m antisocial.

It’s because I’m on a budget.

My husband and I took a hard look at our finances recently and realized that if we don’t do something drastic, the bottom’s about to drop out.

In 11 years of marriage, we’ve tried to stick to a budget before, but always failed because there was plenty of money and never enough reason to scrimp and save.

We both had thriving careers, Stewart as a tenured university professor, me as a television producer.

Together we had a great household income. We remodeled the kitchen, adopted a dog, went on fantastic vacations, and threw big parties.

First Comes Love, Then Comes Marriage…

But then, as they do in so many American stories, came the children.

I got pregnant and I got tired. Having saved half of my pay for a year before the baby was born, I stayed home with him for a while.

I did the same thing when we decided to have another baby two years later.

Then we moved to a better school district, putting all of our money into our new house. And just in time for our bigger mortgage, I became an at-home mom.

It worked just fine for a while. I took a web editing job with part time pay so that I could work from home and care for the boys.

About a year ago, I left the regular job to do more flexible, freelance work. As it turns out, I actually work less now for money and more to maintain our family.

I cook, I clean, I parent the children, and I do some writing here and there.

There’s not much money in this career, as many of you know.

The Wake-Up Call

For a while our family’s financial picture was still okay. There was enough in savings that we didn’t alter our spending much at all.

We could have gone along in that sense of denial indefinitely, thank you very much.

But last month I found out about a 9-week financial course starting at a church near us.

I mentioned it to Stewart. There was free childcare, we were available on those days, and the cost was very low.

Would he like to do it together? It would be interesting, I said. We could try getting back on a budget.

He could finally take some time to see how I manage the family’s money.

Surprisingly, he agreed. I looked forward to getting a clearer handle on our money and finding more ways to save for retirement and college.

I didn’t expect the big wake up call that was about to smack me in the face.

The first step in our course was to make a very rough budget. Luckily, we have been using Quicken to record our spending and balance our checkbook for as long as we’ve known each other.

In fact, Stewart is the one who introduced Quicken to me when we first met. Once we got married, we merged our accounts into my file, and he basically never looked at it again.

Since I’m a fairly organized person I have been categorizing our expenses for years, so all I had to do was run a 12-month transaction report, sort it by category, and then we could see where we had been spending our money.

The picture was not pretty.

When I looked at the numbers my stomach turned. I checked and double-checked, but every time it came out the same.

Based on my husband’s regular salary alone, we have been overspending by $2,500 per month for a year.

Funny, that’s the exact amount of money I brought home from the job that I quit, exactly one year ago. 

How Did We Get Here?

It had been an emotional choice. Even though I was home with the children, I was usually upstairs in my office, keeping one ear out for disaster but most of my attention on the job.

I got up early, worked during their school hours, and late into the night after they went to bed. I hardly ever spent time with my husband. By the time I made the decision to quit, I was miserable.

Stewart asked “How can we afford it?” I told him I didn’t care. We’d figure it out.

It’s time to figure it out.

I had been feeling pretty good about our finances, thinking we just needed to nip and tuck our spending a little bit here and there, but now I’m not so smug.

Without me working, our mortgage, taxes and insurance, and utilities alone cost more per month than we bring in.

Which means we can comfortably reside in our house but we can’t do anything in it. Not even eat.

After we took that scary snapshot of our spending, we realized that if we keep living like we were, we’ll run out of money soon.

While the other couples in the class were desperate to get themselves out of credit card debt, we needed a new system to prevent us from going into it.

The next step was to start living within our means, spending $2,500 less per month than we already were. It seemed impossible, but it had to be done.

Next time on American Family Budget: I’ve created a monster. The battle between math and emotions unfolds as a husband and wife fight to create a balanced monthly budget.

Kim Tracy Prince is a Los Angeles-based writer who has a husband, two little boys, and a slightly unhealthy obsession with spreadsheets. Her work appears at Notre Dame Magazine, Girl Body Pride, CBS Los Angeles, and her blog, kimtracyprince.com.