This past weekend M and I sat down and had a conversation I'd never had before.
It wast he Budget conversation. Big fat capital B.
M and I have never been wild spenders, but we've also had the luxury of not really having to track what we spend too closely. We've been able to pay our bills, save, and have fun while we're at it. I understand how incredibly fortunate we've been.
Last year right before our wedding I had signed up for Income Based Repayment for my student loans. My payment was calculated based on my 2012 income- the bulk of which I was working only half time, while studying for the bar exam. My income was pretty itty bitty, and since M and I were not yet married, my payments were itty bitty as well.
I've had a reminder set that by the end of this month I needed to recalculate my IBR payments and resubmit them. I had been avoiding it in part because I knew it was going to skyrocket. I now made significantly more than when I first reported..and unfortunately (fortunately?) I got married to a man who is doing well in his career so I knew that number was going to go up. I plugged in some simple numbers for an "estimation" and was reduced to hysterics when I saw the number go up by approximately 500%.
This prompted a very serious conversation about our spending.
Like I said, we're not bad by any means, and both decently frugal all around.. but when it comes to dining out, there's significant room for improvement. I won't hesitate to order out lunch, even if I have a perfectly fine lunch in the fridge. M does the same. We both grab drinks, dinners, and happy hours with our friends without even a second thought and some nights will eat out just ourselves when we don't feel like cooking. Food is a huge part of my life, I LOVE trying new restaurants and have a list a mile long of must-visits. Unfortunately for the time being we've made a deal to rope that in and be way more intentional when we DO decide to dine out. We've set a budget for that, as well as reduced our "personal spending" fund that we had been pulling from our joint account.
We put everything into Mint.com and set estimated allowances for things like utilities, gas, groceries, etc., to see how we do month over month on that.
We also decided to cut cable.
Yep, we went there. Really I don't think it'll be too terribly hard for us since we have access to a LOT of "live streaming" accounts (Netflix, HBO Go, Amazon, Comcast streaming/Xfinity..whatever that one is-- and most are family that have let us use their log ins). We'll have basic TV, so really the only struggle for M will be sports. My cable watching basically consists of throwing on episodes of Big Bang Theory, or any of the Law & Orders in the background or to veg out to. I do love me some food network, but I can always get my fix at the gym if I need to (worst case scenario we can beg M's mom to come over and just lay on her couch and watch crap..haha).
I don't want to give the impression we're super hard up as a result of this increase in my loan payments. We will still have a good sized surplus left over every month (or we SHOULD, we'll see how our budget works!) but we wanted it to STAY that way for the foreseeable future.
We're also fortunate enough in that our only really "bad" debt is my student loans. M has a very small amount left, but mine induces hives. Ohhh law school, the gift that keeps on giving. I won't ever get into numbers on here.. because, well, this isn't a personal finance blog and it's personal to our family. We have 1 car lease and 1 car loan, but that will only last a few more years (knock on wood). We do have a mortgage but know our house has appreciated in value since we bought it so we don't look at that as "bad debt" in the same way we do my loan. We have zero credit card debt- although we both have credit cards- we treat them like debit cards and pay them down every month.. basically just using them to build credit and earn rewards points (we earn travel miles and hope to use them to take vacations in the future more economically).
We're definitely looking at this as a challenge and this is something I've been wanting to do for a long time. I struggle with balance though- I don't want to venture to either extreme and deprive myself of some of life's smaller indulgences. I realize it may come to that if we were ever that hard up but honestly, we could die tomorrow and I don't want to miss out on my 20s because I wanted to save literally every.single.penny. That's not living.
I feel like I should add as a footnote:
yes, we're still going to Italy in a few weeks and yes that's costing us some $$$ but that will be our last "exception" for a little while.
Basically what I'm wondering is, do any of you have any tips, tricks, good blogs, resources, on personal finance, budgeting, creative ways to save/make some money?