For the last two months, I’ve been working to a brand new budget. I thought I was budgeting before but actually I had a vague list of monthly bills in a spreadsheet which reminded me of what I would need to pay out for roughly. The hubby and I just hoped for the best each month and then couldn’t figure out what went wrong most of the time!
I’ve now changed the way that I budget (thanks to Claire at Ready for Zero for writing a post which inspired me to change what I was doing) and I must say it’s been working out brilliantly so far! My new way of budgeting involves me looking at the checking account daily and tracking and recording every expense down to the last penny.
Checking my bank account and tracking expenses every day is slightly tedious but it’s so worth it because I feel that finally I have complete control over everything that goes in and out of our account. More importantly, I can forecast what will be left (if anything!) in our bank account at the end of each month before the next payday. I now know that we’ve ended up overdrawn so many times before because quite frankly checking our finances was not something that we paid enough attention to!
Socialising costs are now included in the budget!
Anyway, since changing the way that I budget, I was able to see clearly that last month, we spent £55.12 as a family on ‘socialising’. Broken down this involved a couple of playgroup trips, a few coffees (and cakes) out with friends and the cost for my daughter’s Halloween party at preschool. This month so far, I’ve spent £5.25 on socialising. On average I’m setting aside £50 for our socialising budget each month and if we can spend less than that, great.
Last month, some friends of ours asked us to go out for a meal with them to a local restaurant. The hubby and I looked at each other anxiously as we both knew we that we would have to reply with our well practiced phrase, “No, unfortunately we can’t make it. But thanks so much for inviting us. Maybe next time?”
We knew straightaway that our socialising budget would be breached before we could order a starter, because we’d already spent half our budget that month already. When we said that we couldn’t make it, then came the next question, “That’s a shame. You could bring your daughter perhaps, then you wouldn’t have to pay for a babysitter if that’s what you’re worried about?”
We could have then told our friends that actually just the cost of the food in the restaurant would have burst our budget, even if we didn’t have to pay for a babysitter. However, we made an excuse up about the fact that we already had plans for the evening in question and changed the subject quickly.
On the way home from meeting our friends, the hubby and I talked about whether or not we should have explained our situation. We didn’t know whether they would understand – I mean it was just one meal out and they were happy for us to bring our daughter along. So the only cost would have been the food and a tiny bit of fuel to get there and back. Without showing them our budget spreadsheet and explaining the whole situation, how could they understand?
Should we have ‘come out’ of the debt closet?
These people are our friends, we enjoy spending time with them and although they are aware that money is tight for us, we haven’t confided in them about our debt and probably won’t in the near future. In all honesty, we’re worried about what they will think of us! Maybe one day, we’ll feel able to explain. It just didn’t feel right at that time to tell them. There’s only a handful of good friends who know and can understand our situation without judging us. So we decided that in this case, the best option would be to defer and deflect away from our finances.
Having debt does cause barriers and even if we do wear our hearts on our sleeves, there are people who can’t (or won’t be able to) understand our situation. These people may well come in the form of family and friends. So for us, it’s a case of riding the waves the best way we can on this journey to debt freedom!
Have you ever come across barriers concerning finances with friends or family?
Editor’s note: Tomorrow is week three of Frugal Feast with the fabulous Eva from Girl Counting Pennies, so please check back then for another tasty recipe!
- The Gift of Debt: A Taste of Freedom
- I will not give in: the cycle of debt has been broken
- October 2013 Debt Repayment Update
*Image courtesy of freedigitalphotos.net (Let’s celebrate – cheers! Stock Images)