Money Matters: Tight Budgets

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** This post courtesy of guest blogger Chris Kingsley**


Does money feel stretched for you?

Do you feel like there are always more opportunities for your money than dollars to fund them?

If you answered yes, you are probably not an alien (if you answered no, I have my suspicions). I mean, hey, money’s tight these days…right?

When did money start getting so tight? Has it just always been that way? Was it in the infamous 2008? Was it when gas prices went up? Was it the kiddos (ding ding ding ding)? Was it when a certain thing called technology made all kinds of information and opportunities available to those who purchase the right products and monthly subscriptions? Do you remember a time when you felt like there was comfort in your budget and a nice chunk of discretionary income?

I am constantly fascinated in my financial counseling work by the trend of families who make significantly more income than ours who are stretched to the brink and even behind on payments. I wish I made as much money as they do. They wish that they made as much money as [insert name]. [Insert name] wishes they made as much as [insert wealthier sounding name].

There’s always something more that we can do if we have the money. Many of the people that I meet with who just don’t have enough money live a lifestyle that leaves me wondering what more they could want. But, there’s always more. Hang with me while I get a little edgy here, but with some households, I’d like to do an experiment and increase their wages by $1 per hour every month. There would be multiple things measured in this study (this would actually be a great study). My first question would be how long will it be before they actually decide to stay current on their monthly obligations? Second, I would be interested in seeing during which month savings became a part of the equation. Here’s a really good one: after 2 years, will the majority of participating households have more debt or less debt? At what point would they say that money isn’t tight? On and on the study goes.

I love how conversations always come around to those crooks at the gas station. Gas prices get a lot of publicity, and to an extent rightfully so. I get the fact that everything becomes more expensive when gas goes up, but is that really the issue? Most peoples’ phone (home and cell), internet and tv costs have gone up as much or more over the last several years as the amount they spend on gas.

How much more would you need to make in order to not feel stretched? My first pay raise would go toward better funding my 403b, my HSA (health savings account), and maybe an upgrade on Gretchen’s insurance (in other words, no change in net income). The next raise would need to go strictly toward the transportation situation. The next raise would have us thinking about some desired home improvements. The next raise might go to being able to afford more organic fruits, vegetables and meats. The next…etc., etc., etc.

I really believe that one of the long term keys to financial freedom is getting to the place as a household where we spend significantly less than we make. This takes such discipline because of the very fact that there is always more. I know I talked early on about the power of contentedness when it comes to financial freedom (really any kind of freedom). At what point do we have enough and not need anything more?

I really want to be one of those households that spends way less than we make. Wouldn’t that be way cooler than having all the same stuff that every other discontent household has? I freely admit that I do want a lot of things and I really do have my next 5 or 6 pay raises spent (to be clear here, I, like you, get pay raises about once every never), but is how I am fantasy-spending this fantasy-money really the route to happiness or freedom?

Where does the balance fall for you when it comes to now spending and later spending (later spending = saving or investing)? Are you stretched by necessity or by habit/impulse/oops/car (this one actually fits in oops usually)? Outside of a rental house near our house, there sits a very new looking Chrysler 300. I wonder if their budget is tight?

Rusty and Kelsi lived in an apartment cooperative for several years paying below $300 per month for rent for a three bedroom apartment. We pay more than twice that amount monthly (plus repairs, maintenance and improvements) because we chose to purchase a home. More often than not our budgetary tightness is due to choice. I do not regret that particular choice, and we have a spectacular home loan, but I must confess that the stretch that I feel is relative. There are other options.

I want to be in one of those conversations that are always happening where everyone is nodding their head and talking about how-expensive-everything-is and how-can-anybody-make-it-anymore and give a nice, wide-eyed, Pollyanna, really? I just thought everyone made way more than they needed like we do – and we don’t even make much! I want to be one of those aliens that I referenced at the beginning of this. Who are you? What planet did you come from, ‘cuz down here on earth we don’t do comfortable budgets.

I’m not there yet and I wonder if (under the laughable assumption that regular raises will become normal again) as our income grows we’ll make the decisions necessary to get there. Maybe it just won’t be worth it to us. I do think that we have set our course in this direction, though. I love the thought of having extra. The fact is, though, that we’ll have to seriously buck the norm for this to happen. Less is more doesn’t get any more concretely true than when you talk about the compound benefits of a simple, pared down, budget and lifestyle.

What are you doing to unstretch your budget?



This post was linked to Monday Mania at The Healthy Home Economist, Welcome Home Link Ups at Raising Arrows, Mentoring Mamas Monday at Simply Living for Him, Seasonal Celebrations at Natural Mother’s Network, Sunday School Blog Hop at Butter Believer, Traditional Tuesdays at Cooking TF, Fat Tuesdays at Real Food Forager,  WLWW Link-up at Women Living Well, Frugal Days, Sustainable Ways at Frugally Sustainable, Simple Lives Thursday at Gnowfglins, Your Green Resource at Live Renewed

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6 Responses to “Money Matters: Tight Budgets”
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  1. I love this post! We make enough money to cover our expenses each month by working, but we also have a home based business – the entire income from that goes into savings. On the months when we get an extra paycheck (more Fridays than usual in a month) we put that paycheck into a savings account for “planned spending” – hockey, etc.

    I always wonder about the coworker that cries how broke she is, but has a $700 cell phone bill and eats take out for every meal. And she is at a pay grade 2x higher than mine, lives in a small house and only has herself and one child to account for expenses for (plus receives child support). My husband and I live a comfortable lifestyle on an income that combined equals hers, we raise 2 children, 5 horses, own two (old) vehicles and have a nice house.

  2. busymomma

    We have tried to cut out interest payments whenever possible. Paying the car insurance for the entire year all up front was a huge hit to our savings account at first, but when you did not have interest added each month it ended up saving us a few hundred dollars over the course of the year.
    We are also trying to cook and eat as much from scratch as possible unless we find things on sale for a low enough price.

  3. Great post, as always Chris. I recently quit my job (crazy I know, but some jobs just aren’t worth it), so we’re down to one income for a while. It’s been on my heart for quite some time to reduce our spending anyway, and to really, really re-think our lifestyle. We’re not extravagant, but it means giving up the idea of what society thinks my lifestyle should be. D and I don’t go out for dinner much, buy gadgets or expensive clothes, drive our cars everywhere etc., but there is still more we could be doing to live more simply.

  4. I imagine your clients are eternally grateful when you are able to show them the light, Chris, via a budget of course. 🙂

    The budget gets such a bad rap: it’s constricting, it’s just for nerds who have no life, it just takes away, etc. I have to admit-we were there a few years ago. Then we found Financial Peace University, and saw a better way, just as you detail in your post.

    It is such important work you do, helping folks over those obstacles in their hearts and minds so they can head towards wise money management.

    You have to say no to all kinds of things that are less important so you can say yes to what is really important. It is such a simple concept, but can be so very hard to grasp, especially if you are not willing to let go of pride, prestige, keeping up, and filling those holes in your life with stuff.

  5. Great post!! We’ve just been evaluating our financial decision-making processes after my DH moved into a job that pays significantly more than we’ve ever earned yet we seem to have as little money left over at the end of the month as ever. Granted its only been 2 months since he started there, we just moved house and baby #3 made her appearance last week so there have been adjustments and extra costs to factor in but now life is getting back to normal we want to make sure we stay on top of our finances and choose what we spend on versus just spending madly in a haze of ‘oh my gosh the eftpos won’t decline if I buy this, how exciting, I’ll buy it just for that nice feeling’ 😉 This post is timely encouragement to stick with our original, low-income-proof budget and be wise in choosing where to ‘stretch’ ourselves. Thanks!

  6. Another great post Chris, thanks! We have much higher rents here in the UK with lower incomes and lower healthcare costs, but we manage to live well within our means, but we are rare as a family. Almost everyone I know spends more than they earn. My husband and I are in our late 40’s and I suppose we are from the generation that didn’t grow up in the ‘instant gratification society’ our children are currently growing up in. We have to teach our children the importance of living within the confines of a budget and finding pleasure in the challenge-we do!