Tip Jar: Budgeting for 2021 - Lisa's Two Cents

This past weekend, my husband and I sat down to do our annual exam of our household budget and savings plan for the year ahead. We thoroughly look at our budget and realistically examine potential expenses and find ways to cut/save money for the upcoming year.

We have built out and customized an awesome excel sheet template which is an extremely helpful resource for us. I can share if anyone is interested! Having a firm understanding of your budget can allow you to prepare for future expenses (i.e. school, home projects, home maintenance issues, etc.), reconsider what items are truly important and remove things that waste money all while challenging yourself to become a better saver. This sheet is what helped us make the jump for myself to become as stay at home Mom (and of course my husband’s career, we were blessed) – we number crunched and saw the opportunity was possible!

In years’ prior, we would take some of our savings and pay off any debts that were outrageously high in interest and/or any items we could afford to remove completely from our monthly expenses, but I’m proud that this year is a little different and we have less going to these debts and more towards things that will truly benefit our future!

GOALS – What are you saving for?

I highly recommend having some sort of budget to follow. As mentioned, this year, we are fortunate enough to start saving much better than years prior. We were able to eliminate nearly all our debts over the past couple years. Here is how we are planning of saving this year!

Build up Emergency/Savings Fund

I was astonished to read recently that most Americans would not be able to afford/pay cash if slapped with a $400 maintenance charge. I also read that many retired folks never plan for the added expenses of a home, even if it is paid off. The financial article further explained that it is important to expect maintenance costs of 1% of your home value a year. These discoveries made me really start thinking, we need to start saving, preparing and building up our emergency fund.

This year, we have set up an auto transfer to contribute 10% of our monthly income each month to our savings account.

Schooling and 529 College Savings Fund

For us, we are trying to make sure we have money available for the kids’ schooling. We know the costs of Audrey’s Kindergarten and JP Preschool, so we are looking ahead at how we can save for this in the immediate future and making sure we set aside the costs related to that. Like I said, we are starting to save a little more and now we are looking ahead to make sure we have our yearly tuition covered.

We’ve also started a 529 College Savings Fund. This “savings plan” is tax exempt and can be designated to each child. I have read about some “cons” resulting in less financial aid because of the 529 plan.

Pay for Groceries in Cash

There is no greater challenge for myself than paying for groceries in cash. I am FORCED to pay attention to what I’m spending and know exactly what my allotment for that shopping trip is. The reason I challenge myself here, is because I know how much I overspend at the grocery store, particularly when I throw it on my debit card! There is always something that was not on my list that finds it’s way into the cart.

I’ve shared some posts about this before:
LIFE LATELY: BUDGET REVIEW – SAVINGS CHALLENGE
LIFE LATELY: SAVINGS CHALLENGE – MID-MONTH UPDATE
TIP JAR: SAVINGS CHALLENGE – THE FINAL VERDICT: SUCCESS OR FAIL?

One thing I’ve found is that making a grocery list and filling out the estimated cost of the item as well makes a huge difference for me. I go into the store with the mindset that I only should be spending $xx amount on that grocery trip.

Sell unused items and clothing on Marketplace/Poshmark

This year I want to challenge myself to try and make some additional income in a way that would be beneficial and not time consuming (I already have invitations and bouquets that do that!). You all know I love garage sales! I love finding amazing deals and obviously helping others do the same, so I figured I would sell some of my nicer clothes online this year. I’ve already set up a Poshmark closet and I have a stack of clothes a mile high I’m looking to sell for cheap! I just need to photograph them and post online. I’m currently not an active Facebook user but have been intrigued re: FB Marketplace. My sister-in-law LOVES it and I’m thinking selling kid’s clothing, toys, household items, etc. might be a neat thing to try and will eliminate some clutter from my house – SCORE!

Review Spending Weekly

Our goal is to look at our week thoroughly and see what we need to cut back on throughout the rest of the month. I also want to make sure I am entering in all our expenses to the spreadsheet on a weekly basis because catching up on a full month in one sitting is not fun!