Our Budget – How We Went Down to One Income

Are your finances something on your mind this year? Perhaps a budget is part of some of your 2018 goals or something you’ve been meaning to do, just like I’ve been meaning to write this…

I left my full time career over three years ago now (more background here), and before I stopped working, my husband and I obviously had a lot of discussion on what this would mean for our finances. He had read Dave Ramsey’s, “The Total Money Makeover,” and thought we should consider it. When he first started explaining some of the principles to me I listened and nodded my head. Then he started saying things like we’ll just use cash and get rid of our credit cards. Then I knew he had lost it – he was nuts. Use cash for everything? Um, no. This is crazy talk, I told him. How does that even work these days?

Moving Past Crazy Talk

After getting over my own issues and realizing people actually did this, I decided I should learn more about it before totally blowing his proposal out of the water. My husband was definitely worried knowing we would be moving to less than half of our income and at that point, we didn’t have a plan and I hadn’t come up with one besides, “we’ll be fine.” Thankfully, he’s my rock and I knew he had good reasoning to look at a plan like this even if it seemed drastic to me. So we started to listen to the book on tape (not going to lie, this was rough but we had some good laughs sitting on the couch together discussing what this would look like for us.) So we started down the official path to financial peace. Fortunately, we had already taken some steps towards Dave’s steps like finally paying off our crazy student loan debt. The book details some big steps regarding paying off your debt and saving for retirement. If those are some of your concerns, I would definitely recommend looking into this program. Meanwhile this post is really focused on our monthly budgeting that has come to be because of Dave’s steps.

Cash was still going to be a hard one for me to move to. I was still trying to figure out why we move to cash if we have a budget. Why not continue to use our credit card and pay it off like we do, today? The biggest reasoning in the program is that it’s a lot harder to spend cash than use a card. And they’re right. As you literally watch your grocery money or spending money dwindle throughout the month you make better choices. We moved to cash immediately, and I definitely fumbled over handling all the envelopes for several months. Now it’s just habit.

There’s no doubt we are still very fortunate to have my husband in a good paying job but wherever you start from, to think of making less than half of that each month is scary. He was right, we needed a good plan if we didn’t want money to become a point of stress in our family and our marriage.

Budget Priorities and Non-negotiables

We decided on our priorities for the budget. One was to pay down our final debts which were our cars and our house. From the monthly budget perspective, we figured out what we would put towards those items, and we also decided on non-negotiable items in the budget – for us, medical bills and giving. Once our cars were paid off we also added car maintenance and house maintenance to our non-negotiable list, meaning we put a certain amount of money away every month regardless of what other expenses we have coming up for that month. We can always put more money in those categories, but we have a minimum that we put away so if/when larger repairs are needed it’s not a complete shock to our budget.

Flex Items

We flex certain categories each month including groceries, restaurants, clothing, toiletries, personal spending money and entertainment. If it’s going to be a tight month, clearly we don’t move groceries to $0, but we do tighten that cash and we focus on making sure we find deals during the month and plan our meals accordingly. On the flipside, things like clothing and entertainment can go to zero when needed.

Changing Expectations

I quickly realized my expectations on what we needed to spend money on weren’t really needed at all. Now, I often wonder what we were even spending our money on…(besides daycare that is).

I was surprised at how much less we could spend on groceries by having a plan and how much less we could spend on restaurants by having the same plan, too. So much of the money we spent eating out was because we weren’t really organized, and we would make a last minute decision to go out. We still enjoy our favorite restaurants, but we do so more sparingly. One of our first date nights after we started this process was pretty eye-opening. As we went to pay the check, we both looked at each other with big eyes and realized, we just spent a full week’s worth of groceries on one meal! Yikes. But food and wine, is kind of our thing, so we just do it less and enjoy it more when we do go out.

I was also transitioning to staying at home and had made it a point for Moms or Girls Night Out a couple times a month (sadly, this has gotten away from me but I digress.) So that money came out of my spending money and depending on what we were doing as a family, may have come out of restaurants or entertainment for the month. Let’s just say that by the end of the month, I was suggesting a Girls Night IN opening a bottle of wine to save but still see my friends.

And if you would have asked me three years ago about our home, I would have said we’d likely be moving soon (in my mind to a bigger home with everything nicely up to date). Now I know I don’t need that and don’t even desire it any more. We’ll probably move in the next few years but it will be for practical reasons to find a ranch that serves our growing family and as long as we determine non-negotiables, I don’t need anything much bigger or more expensive.

Budget Line Items

We honestly did not have a budget before three years ago, sad to say. When we started to create our budget, we first did a lot of it on paper and then moved to the EveryDollar app. I didn’t even know where to start in the beginning. What I’ve learned is that we have to have a budget discussion every month and talk through what’s coming. If it’s new to you, here’s a quick laundry list of all the regular line items that have been in our budget by category:

  • Giving
    • Church
    • Giving Account
  • Savings / Retirement
    • Retirement IRAs
    • Emergency Fund
    • Other
  • Housing
    • Mortgage
    • Property Taxes
    • House Maintenance
  • Insurance
    • Life Insurance
    • Identity Theft Insurance
    • Auto Insurance
    • Home Insurance
  • Debt
    • Student loans
    • Car loans
  • Medical/Health
    • Medications
    • Healthcare bills
  • Transportation
    • Gas
    • Car Maintenance
  • Food
    • Groceries
    • Restaurants
  • Utilities
    • Home phone (yes, you may not need this but with our middle daughter we feel more comfortable having it and have just about the cheapest option there is)
    • Electric & Gas
    • Water
    • Cell Phones
    • Cable & Internet
    • Sewer
  • Personal
    • School Tuition
    • Aftercare/daycare
    • Toiletries
    • Hair cuts
    • Pet Supplies
    • Clothing
  • Recreation
    • Spending/pocket money
    • Entertainment
    • Gifts
    • Babysitting
    • Kids activities (swimming, gymnastics, etc.)

Bottom Line

You can do this! Make some financial goals and get started. I’m by no means an expert, but we’ve found what works for us. One final thing – I do wish we would have started this sooner before I had to stop working. I wonder where we could be now if we had been living generally on one income even while bringing in two. I hope this post has helped you consider what next steps you may take towards your financial freedom! “Live like no one else today, so you can live (and give) like no one else tomorrow.”


*The Total Money Makeover link is an affiliate link to Amazon.

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