Tuesday, October 16, 2012

Interesting - Lesson Learned!

If you have been following along in the last couple of months, you'd know that we have been going through a tight financial time.  In order to combat this, we really pulled in on the budget, and then laughed as we quickly transferred the money back OUT of our emergency fund for a few things.  We've managed to save very little, but at least we haven't gone into debt!

See, we've got a little guy who is just starting Kindergarten.  Call me crazy, but I totally didn't realize how expensive it would be to get him all set up in school.  We faced school fees, purchased school clothes, winter coat and boots, and a bunch of other things!  Our little guy is super sensitive to anything touching his skin, so we had to make sure he had super soft pants, seamless socks (rather expensive!) and a bunch of other stuff that would be suited to making him feel comfortable at school.  I didn't want his teacher to have to fight with him every day to get his socks back on, while he screamed that his socks seams were cutting into his feet.

We also ended up having to get new tires, a wheel alignment, and a couple of other things.  It was kinda crazy.

The one mistake we made was to not bother getting cash out of the bank, and assumed that without the cash in hand, we'd spend much less.  WRONG!! 

I can tell you that without the cash in hand, we spent quite a bit more on groceries than we had before we cut the budget!!  Like, easily $200 more!  Wow... was that ever a wake-up call for us!  When we cut out our cash budget, we spent more on the things that we used the debit for.  I was baffled at how we were spending so much and yet, we were trying so hard to save more!  Starting this week, we are back onto a cash budget... that will save us more money than spending with a debit card.

The second mistake I made was to cut out some of our grocery budget.  With one of the kids in school, healthy snacks are a must.  Easy lunches are a must.  Unfortunately, I cut back our grocery budget to a completely unreasonable amount and then "overspent" even when I was buying just the bare minimum of our food needs.

In November, I'm starting up a dayhome, and that will replace my lost salary from the bookkeeping position that I quit in August.  (It is the only job where I can honestly stay home with the kids and focus on them, without having to meet deadlines, work late hours, and neglect the kids when I'm busy with work.)  I'm very excited to start this up, and have already been planning out a new budget.  We'll go back to the same grocery budget that we had, but we'll try to keep out other expenses as low as possible.  We should be able to save like crazy and see our emergency fund back up to the full 6 months of expenses within the next 6 months.  We'll see.  I know that there will be expenses that come as a result of the dayhome - insurance, a little more food, other random things, but I'm confident that we can manage those things well. 

Well, here's to a new start... again!  :D  I am a very optimistic person and I don't mind starting fresh as many times as it takes to get back on the right track.  As long as I start fresh from a slightly higher position than I started from last time, I'm happy!