We’ve all been there… you’re standing in front of the register and just as you go to pay, you’re envisioning all of the ways “it” will make your life better. You don’t stop to ask yourself “Why am actually I buying this…?” Quick as a flash, it’s now yours and you’re on your way home. A few minutes… a few hours… a few days pass and buyer’s remorse kicks in and you kick yourself for buying “it”. So many times this has been the story of stuff that we’ve bought. I’ll be walking by stuff that I’ve never even thought about or used before and scenarios enter my head of how can I go another day without it? Just today, we were in the grocery store and we saw a very reasonably priced and good quality colander for sale. Steph and I picked it up and looked at it and were almost ready to buy it. Then the thought hit us… It wasn’t on our list, we came here for groceries and most importantly… we have 2 perfectly functional colanders already at home! In our home, we’re trying to change our focus from “later today & tomorrow” to “next year & next decade”. It’s not easy because there’s so many distractions and so much to do in the moment. However, we’re finding that it’s absolutely vital that the “today” you makes the decisions the “tomorrow” you would want you to make.
A wise man states often that “Children do what feels good, and adults devise a plan and follow it.” Simply put, children (and those who behave like children) tend to impulse EVERYTHING while adults try to plan for EVERYTHING. Before any substantial purchase or life changing decision, we’re finding that we should ask “What will this mean to me and my family in 10 years.. in 20 years.. in 30 years?” If the focus of our thoughts is only “How can I drive/carry/ship this thing home this weekend?” we’re not going to win in the long term. The Zombie shows and movies got a little more right than what they realize. When “stuff” fever hits us, our brains shut down and we mindlessly shuffle towards what we want. The zombies want brains, but we want stuff. You do not want the planning for your future to be the equivalent of trying to hit a piñata to see what falls out.
Your budget is both the “GPS” and “Guard Rails” for getting you to where you want to be in 20 years. If you are not living in a way that is conducive to your goals, your budget is going to tell you that you took a wrong turn and that you need to recalculate things and get back on the right road. An incredible thing happens when you live on a budget. Where money just flows freely out of your life, your budget can show you in excruciating detail (if you’re faithful to it) what your financial situation is. It will show you where the worst leaks are and help track your efforts to minimize or eliminate them. The longer you budget, the more granular you will become in the categories you’ve setup. Just as you can die from a thousand small cuts, your financial future can be killed by constantly outflowing nickels and dimes. The longer you budget, the more you will see how the nickels and dimes of today are costing you dollars tomorrow.
An example from our home recently. As we work on our budget more and more, the area that we spend the most money (in the flexible categories – not including mortgage, insurance and other unchanging & necessary expenses) is the grocery category. We took some of our receipts and thought back on how the grocery bill got to be so high. We thought and thought until we realized that it wasn’t any 1 singular thing that was hitting us hard. It was a lot of “little” items that were hitting us. We realized that we were spending $10 a week on bottled sweet tea to keep in our fridge since we love sweet tea. Steph had some SYW reward points from Sears to spend (hooray Super Bowl promotion!), and she was looking through their website and found an iced tea maker. It was listed for $30 and she had $27 in points with free shipping so she ordered it for $3 out of pocket. It arrived, and on our previous grocery trip we picked up a 100 Pack of Black Tea for about $3. The bag of sugar we purchased was about $2. We unboxed the sweet tea maker and started brewing. A pitcher of tea requires about 8 tea bags and 3/4 cup of sugar. A pitcher of home-brewed sweet tea (almost a gallon) costs roughly 50 cents (24 cents in teabags and about the same in sugar). A single gallon of tea we were drinking cost $2.50. Simply put, we can brew 5 gallons of tea at home for the price of 1 gallon of tea at the store. After we brewed our 4th pitcher of tea, we had already broke even on the iced tea maker.
Now lets take a step back. Many people I know would think that a $2.50 gallon of sweet tea really isn’t going to make a huge difference in your life. On the surface, it appears to be the case but I’d argue that both the practice and principle of it will make a big difference. At 10 dollars a week, our sweet tea that we drink at home was costing us about $500 a year. “But Jason, how does $500 a year really make that big of a difference in the long run?” You have to put it into perspective. This is ONLY sweet tea we are talking about here. It was 1 item on a long grocery receipt. Coffee used to be the same way to me a couple of years ago. I’m not going to go into a long explanation of it like I did with the sweet tea, but look at the cost before and the cost after realizing how much was being spent.
“On-the-Road” Morning Coffee: $2.00
Workday Week Total: $10
Annual Workday Total: $520 (If only 1 coffee a day.)
“Home-Brewed” Morning Coffee: (~$8 for a 12 Oz. Bag) which comes to $.25 a Cup.
Workday Week Total: $1.25
Annual Workday Total: $65 (That’s 1/8th of the price of getting coffee to-go in the morning.)
It’s the little victories that you have to win over the long term. Saving a dollar here and there may not seem like a big victory, but if you’re losing a dollar or two or ten every day it’s a leak that needs to be addressed. Now, maybe the “leak” is something that is desirable and you want to have it in your life. The whole idea here is that you’re aware of it, you accept it and you choose to keep it around rather than getting a lot further along and wonder why every penny slipped out of your pocket. Even the little choices in your life need to be intentional. Knowing why you are where you are is so much better than just happening on a place in life not knowing how you got there.
As time goes on, and you spend time budgeting and adjusting the values in the various categories, you’ll start to see both patterns and really see the anomalies. You’ll know when something big happened financially that month because it won’t match all of the others months that you’ve budgeted. The better that you get at adjusting the categories, you’ll start to want to shrink the largest categories so that you can then inflate other categories (hopefully debt payment and savings rather than lifestyle inflation. This is the point that we are at in our financial journey. We have lived with the budget categories we have set up for close to 2 years now, so we know what the “usual” month looks like. Months do vary, and that is accounted for, but now it’s time to start trimming back to see just how lean we can make the outgoing categories so that we can fund the “future building” categories more and more!