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?
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Related posts:
- 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
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27 Comments
I have come out of the “broke” closet and in some ways it helps friends understand when I say I can’t go out and in other ways, they just don’t get it. I always counter with offering to host a potluck instead.
Stefanie @ The Broke and Beautiful Life recently posted…4 Ways To Destroy A Friendship With Money
We tend to host a lot of dinner parties (cheaply) or nights in at our house. We make sure we still see our friends and try to accept invitations to their houses when we can and if it doesn’t involve a babysitter!
It’s a tough call to know who let into your inner circle. The reality is some friends will understand and be incredibly supportive while others will not. You most likely have an inkling which of your friends will fall into each camp. I would suggest a couple of things. First, you and your husband come up with a standard answer for declining invitations that don’t fit your budget. It can be as simple as Thank you for very much but unfortunately it’s doesn’t fit our budget this month. Or Thank you for very much but we’re saving our money for XYZ. Or make a counter-invitation of something that fits your budget. Essentially have a ready answer that you can deliver with confidence and don’t second guess yourself. Second, when you feel confident in your budget and debt repayment plan and can speak out those efforts positively, tell the friends you believe will be supportive.
Shannon @ The Heavy Purse recently posted…What You Need to Know about Life Insurance {Infographic}
Thanks Shannon! The inner circle reference is very true – some friends will understand and some won’t. I think what you’ve said about delivering a ‘declining’ answer with confidence is really important -something we don’t do very well! That’s probably because we want to accept the invitation but feel that we can’t.
I’ve sorta come out of the debt closet with my friends and family. They all know I’m serious about paying down my debt but no one knows the exact amount of debt I owe. They just know it’s TOO MUCH! 😛 I don’t think you should feel like you need to explain your financial situation to everyone. Sometimes a simple “NO thanks” is enough.
Girl Meets Debt recently posted…Ask the Reader: What is Your Financial Achilles’ Heel?
That’s great that you’ve come out of the debt closet with friends and family even if they don’t know the extent of your debt. I hope that one day soon I’ll be in that place! 🙂
Most of our friends know that money is tight for us and we have some debt like a lot of people do I guess. But only a handful know the extent of our situation! Up until a couple of years ago, the hubby and I would have accepted every invitation whether we could afford it or not, so some of our friends may have noticed a change in us because we’re not doing as much these days!
I agree it can be awkward letting people know, especially when they make “YOLO” remarks or whatnot. I think curt and to the point like a polite ‘no thanks’ often helps out with it, as well as not feeling the need to justify it. I like that you’re adding in portion for social activities – if this is to be a lifestyle change, then I agree it makes sense to add in some fun so that the process is sustainable!
anna recently posted…Tapping Into My Emergency Fund
Thanks Anna! Like Shannon commented earlier, delivering an answer with confidence would help and that’s something we’re not so great at! I had to google YOLO – You Only Live Once! I really need to get to grips with abbreviations. 🙂 Oh yes, we’ve had lots of those comments before. Budgeting for socialising never happened before yet we still spent a little on coffees and the odd outing. The best thing about our new budget is that it’s realistic.
I definitely have trouble communicating my financial situation. With my close friends and family I’m very forthcoming about my finances but I have a tough time with friends I see less frequently and co-workers. It’s difficult to be the one saying no, but I’ve found that people respond better when I have a counter-offer. Along the lines of, “I brought my lunch but I would love to sit with you” or “I’ve my budget limit for eating out for this week/month but let’s plan something next week/month.” Part of that is following through too, of course!
And thanks so much for the nice mention! I’m so glad that you’re finding the budgeting tips helpful.
Claire M recently posted…5 Mistakes You Should NEVER Make with Debt
Thanks Claire! Good advice about having a counter offer ready. I always struggle with this. I need to be more prepared!
Hayley recently posted…Beauty is in the eye of the debt holder
Telling people that money is tight and “I can’t afford it” makes them understand that it’s financial constraints and not your personal relationship that’s causing you from not going out for dinner with them. Your friends might also be able to help or share info on possible freelance opportunities or job opportunities that might help you earn some extra income. I always find good communication is always a good thing!
Brent recently posted…5 Ways To Save Money On Travel & How To Potentially Travel For Free
Thanks Brent for stopping by. 🙂 I agree communication is the best way forward. It’s still tricky though when it comes to personal circumstances. With these friends, we’ve told them money is tight quite a few times now and from their point of view, they’re probably thinking ‘why can’t they just save up?!’ Maybe one day we’ll pluck up the courage to be completely honest about our debts with them!
Hmmmm…sticky subject. Personally, and since I am on the opposite side of the fence as it were, I would have thanked them for the invite and then proceed with a “but it’s not in our budget at the moment.” Hopefully, that would be enough of an explanation without you or your husband having to explain your current finances.
The reason why I would have told them is because they may walk away thinking up other reasons why you don’t want to hang out with them. At least the truth is something everyone can relate to and understand without question.
But like I said, it’s a tricky situation and one that you need to feel totally comfortable with.
Take care and all the best.
Lyle
lyle @ the Joy of Simple recently posted…An Apology And Please Remember!
Thanks Lyle! It’s tricky because we’ve already had to say something along the lines of ‘we can’t afford it this month’ quite a few times now. I feel like we always bring it back to finances so I’m thinking that it sounds like an excuse in itself! If they knew the full extent of our situation, it might help I guess. I will get around to telling them one day I’m sure! 🙂
I am glad you’ve found success with your new method of budgeting. Feeling in control of your finances is so important. My budget spreadsheet isn’t extensive, but I do track my spending as best as possible.
My family knows I have student loans to pay back, so it’s not really an issue with them. My friends are in the same boat as we are, so we’re not afraid to say it’s just not in the budget when that’s the truth. While our friends tend to be frugal with their outings, barhopping or going away on a 4-day trip is not happening any time soon.
If you felt it wasn’t the right time, then it’s probably for the best that you didn’t reveal all. I think it’s okay to say something more vague, like it isn’t in the budget, and hopefully they won’t try and pry. Your situation is yours to keep between your family if you wish. I know my family members aren’t very open about their debt, but they all have some. It’s understandable.
E.M. recently posted…November Goals
Thanks E.M. Knowing who to tell and who to trust is a funny one. It would make things easier in the end probably if all of our friends knew. But if it doesn’t feel right, it doesn’t feel right!
Since I’ve started budgeting this way, I’m already planning ahead to bills I know will be taken out next month and after Christmas. It’s been a really valuable thing to do!
I did tell a few of my friends that I’m trying to get rid of our debt and I’m on a budget. But I still don’t use that when turning down a dinner invitation or other outing. I just make up some other excuse, because some think I’m overexaggerating and some think I’m trying to be cheap. Some do understand, but I don’t want to give them the same excuse everytime. I don’t want to go through explaining our situation and mindset everytime. I haven’t turned down that many invitations, but when I do want to join I try to steer the plan toward something more affordable, such as making suggestion to a cheaper restaurant or inviting them to my house for home cooked meal.
Michelle’s Finance Journal recently posted…2013 Financial Goals Reached!!
Michelle – this is exactly how I feel about everything. You know how you can just tell that some friends don’t quite take it seriously what you’ve said about money being tight, debts to pay off etc? I don’t want to give the same excuse every time either. I think what others have said about delivering confident answers could work really well.
I think coming clean with my friends about my financial situation and my blog makes it a LOT easier for me to turn down plans. If they read my blog they just know, and don’t question it one bit. Well, truthfully they were like that even before they knew about my blog. But I think it does help.
Budget and the Beach recently posted…I Was a Teenage Shoplifter
I’ve been toying with the idea of telling a few people about my blog but I’m going to wait a bit longer I think. Once I’ve paid off some more debts, hopefully my friends and family will look past the debt figures and see progress!
I understand this conundrum all too well. Most of my friends are in the same financial boat as me but being in debt sucks and sometimes people will just not understand how difficult it is. For what it’s worth, I think you made the right decision 🙂
Mackenzie recently posted…Do You Know What This Is?
Thanks Mackenzie! 🙂 That’s just it – some people don’t or can’t understand, especially when they don’t have any debt of their own. I have friends like this (they’re the ones that I definitely wouldn’t mention our debt to!)
You real friends will find ways to do things cheaply with you. I’ve had times where I was short of money and all we did was hang out at the house, it was better than wasting money out.
Charles@gettingarichlife recently posted…How Someone Can Earn $60,000+ Pre Tax On Welfare In Hawaii
Social gatherings at home can be lots of fun! We have plenty of those luckily. Even when we’re debt free I’m sure our social nights in with friends will still continue.
Countless times I have also done what you guys did – deflected the subject and moved on to something else. My personal finances is a subject I tend to avoid in most situations and for good reason, as someone has said above, its just hard knowing who to let into your inner circle where you finances and debt are inlvolved. At the end of the day I think its the best move, you stay on course and no one is any wiser 🙂
Simon @ Modest Money recently posted…How Not Being Careful Almost Cost Me $1200+
Thanks Simon! It is a tricky one as honesty is of course the best policy. But sometimes it’s easier to deflect and doing so saves the uncomfortable feeling of having to explain something very personal.