We just spent another $50 in groceries.  This included food for the pets, diapers (yes, we’re including just about everything we buy at Walmart in the groceries category of expenses) and a few more food items.  I think we’re really going to be pushing it to keep our monthly groceries under $600, but I’m pretty sure we’ll manage. 

This $50 was right out of the envelope that contains the two weeks worth of grocery money.  This is a system we’re still getting used to again.  The last time we used it was almost 10 years ago, but it worked then and we wonder why we didn’t just keep using it.

Today’s Progress:

• Earned - $0
• Spent - $50 (groceries)
• Debt Reduced -$0

Finally, a day where we simply didn’t spend any money at all! 

Between church and the more thorough weekly cleaning of the house, we just didn’t have time to think about spending money on things.  We also rounded up the kids for some evening football, soccer, and archery in the backyard.

The wife and I did open a bottle of wine for some sauce she was cooking.  We’ve only got about 10-15 more bottles in the rack that we really need to make last a long time.  (That way we aren’t tempted to try to replace them at $5-20 each.)  We did enjoy a nice relaxing couple glasses on the back porch though.  It’s been months since we took the time to do that.

Today’s Progress:

• Earned - $0
• Spent - $0
• Debt Reduced -$0

Recently I’ve managed to complete the first draft of our budget.  This was more difficult than  I thought, but not the mechanics of it.  The difficult part was actually deciding which things to not put in it!  The realizations you have to experience when creating your budget the very first time can just be life changing for some people.  Me being one of them.  So I decided to organize some of those eye-openers and share them with you.

1.  You can actually SEE whether or not you spend more than you make

This is pretty simple.  The budget is going to consist of income and expenses.  When you write all this down and put it in a real list, you can easily see if your expenses are higher or lower than your income.  Be warned!  Your first draft will not likely have everything that you ACTUALLY spend your money on.  (Thus the creation of my spend log to help keep track for future budget drafts.)

2.  You are immediately forced to think about how to correct problems if you have them

Spending too much?  Having made a budget will make you realize how much, AND help you identify where you’re doing things you shouldn’t.  Immediately after looking at the first draft of the budget with my wife, she began to prioritize some things that were left out over things that were included.  (That was actually GREAT!  She could have said everything was important and not been willing to compromise within the bounds of our income.)

We also talked about different ways to turn our spare time into more money.  Selling things on eBay, having a garage sale, picking up some more hours, etc.  All this came out only minutes after JUST SHOWING HER THE BUDGET!!

3.  You get a better idea of how you’re going to do in the long run

By creating the budget, we’re able to see how things are going to look for us a couple years out by simply expanding the spreadsheet a few more dozen columns into the future.  Everything too far off into the future is always speculative, but you can quickly see if the plan you’re making will likely have a positive result that you’re looking for.

In my case, the budget to the end of the year doesn’t show much.  My bonus income is not included because I get it in the Spring.  Also, the tax returns are not factored in.  (With 6 kids, it’s a rather large return at both federal and state levels.)  These normally catch us up on late bills.  Buy spreading out the budget and really following it, we may be able to apply those large amounts toward our current debt more appropriately instead of relying on them to pick up extra-expensive Christmas gifts.

4.  Newfound motivation shows itself

When I see a plan in place that may be the only thing that will keep me from having to literally uproot my children from the neighborhood they’ve grown up in or prevent me from having to take a better-paying job on the road or in another city…I want to execute it at all costs.  Sure, some people may feel overwhelmed at the sight of their budget.  Mrs. DebtBeater and I literally looked at each other with the same "we gotta do this…NOW" kind of look.  This is the kind of attitude and motivation that’s needed to get a debt mess cleaned up.  We’re ready for this, but only because we actually see this big massive problem that could drastically change our lives for the worst.

5.  It helps everyone involved come to the same level of understanding

As a team, my wife and I are going to have to make this work.  Sure she’s pretty much letting me just "do the budget" and let her know how much she can spend.  But by just LOOKING at the budget with me, she was able to understand what had to be done.  The ENTIRE FAMILY was going to have to get in money-saving shape.  I may be the only one crunching numbers, but she’s going to have to help by knowing when to say no to burgers at the drive-thru, or to the vacation plans, or to the dozens of fund-raisers the kids bring home.  We have to be in this TOGETHER or it’s just not going to work.

To conclude, I think creating a budget is a surefire way to kick-start any attack at getting out of debt.  However, more importantly it helps really get you organized and prepared for what’s going to be required to make things happen.  These are just the five main points I came up with after finishing a first draft of the budget, but I’m very interested in what immediate advantages you all found when you first took the plunge and created a detailed budget.  What did you do right after you were done?  What attitude changes did it bring up?

Today was pretty uneventful in the line of spending.  We did need to go get some groceries to replenish some things we started running out of.  You’ll notice that with a large family living out of one refrigerator, we typically make 3-4 stops by the store every week.

Today’s Progress:

• Earned - $0
• Spent - $40 (groceries)
• Debt Reduced - $0

We did have a day full of sports and fun though.  Soccer in the morning, free tickets to a football game in the afternoon, then backyard soccer/football in the evening with the neighborhood kids.  It’s amazing how much you can do to fill up your time without really spending much money.

Financially, today has been a great day.  We spent a little more than we’d like to admit, but we also had some great timing on incoming money we weren’t expecting.  I also had a slight miscalculation in the budget for Mrs. DebtBeater’s income.

Today’s Progress:

• Earned - $147.56
• Spent - $113.48 (baby pictures, dept. store payment, groceries)
• Debt Reduced - maybe $10 on the store card

Ok, the earnings were double what we were expecting.  Apparently my wife had worked more hours than she realized since going back to work last month.  That and she didn’t get paid two weeks ago because of some time-keeping glitch on her hours they had to fix.  Also, we originally calculated $75 every two weeks of income when she’s really going to be pulling in that amount about every ONE week.  We’ll round down to account for the variance in her schedule.  The extra we can apply toward unexpected expenses or something.

The spending part…yeah that wasn’t supposed to be so high.  I totally forgot to account for the 3-month baby pictures we had lined up for our youngest.  (We do milestone pictures for all of our kids and make them our gifts to other family members for Christmas & birthdays.  It turns out to be more personal and less expensive than figuring gifts for everyone.)  So it was nice to have the surprise income, but a lot of it was eaten up by the pictures.  They’re so cute though! 

Another thing that really helped the budget (I’ve updated it again to reflect all these changes) is another $200+ in medical reimbursement statements that came in the mail today.  I’ll submit those before the next pay-period is over and that almost completely eliminates all the negative bank balances in the budget for the rest of the year!!!  There’s only one more the last weeks of October where we’re under by about $20.  Surely we can come up with some eBay sales by then to make up for it or some extra pay from the wife’s job.

Stay tuned!  We’re going to do our best to bump ourselves up just a little more so we can get rid of all the red numbers in our bank balances for the rest of the year!

Today started off kinda rough.  Had a little heart-to-heart with the wife after showing her the budget.  Immediately stuff comes out "what about X" and "that means we can’t do Y".  Well, that’s right.  Looking at that budget, we’ve got zero wiggle-room if we intend to pay our bills.

On the bright side, we came away from that chat knowing that if we wanted to be able to spend money on Christmas presents and not cancel plans we’ve already made…we’re going to have to act fast, and bring in more income.  Also, we need to immediately find ways to eliminate expenses and start living more frugal.  With a combined emergency effort on both fronts, we should still be able to get through the year without dramatically effecting the children’s lives too negatively.

Another plus was that we found some personal checks written to us a few weeks ago to pay for some of the fundraising purchases we made for distant family.  That immediately adds $140 to our "income" this week and helps alleviate the negative bank balances!

I’ve updated the budget files to reflect some minor changes with the newfound checks.  Also, I put in actual values for our power and water/trash bills.  They were a little higher than I’d expected.  :/  Time to start teaching the kids some lessons on being frugal!