This was an easy goal to agree on, because 2012 opened my eyes. Having grown up in the US, I was ill-prepared for the cost of living abroad. Whoa. Items in Kuwait are regularly priced 30-50% more than what I paid for them in the US. We're talking clothes, cosmetics, restaurants....even groceries. For example, for the first few months in Kuwait our groceries totaled $180 a week. FOR TWO PEOPLE.
Fun fact: I once cried in the cheese aisle when I realized the mozzarella ball I was holding cost $12. And the bottle of Simply Lemonade I'd passed up was $18. $30 for mozzarella and our fave lemonade? Gabe couldn't hug me, because you know...no-no on PDA in Kuwait. So I just stood there sobbing about cheese.
White girl crying...aisle 3. Send a mop!
Anyway, by the end of 2012 I was sick to death of falling prey to the price gouging. Every month, we were further and further away from our financial goals. So, we finally sat down to make a budget. Or rather, I made a crazy Excel spreadsheet and Gabe pretended to be impressed. We budgeted for every flexible expense I could imagine: coffee trips, personal care items, gift-giving, groceries, entertainment, transportation, pet items. You name it, there was a column....and I tracked that ish every single day.
One month down, and we've made some pretty big changes.
Here are eight things we learned in the past few weeks:
Nix impulse purchases: We started using this adorable free grocery list printable from Ellinée, which allows you to check off anything you need. Together we create a grocery list prior to heading to the store, and buy ONLY items on the list. Absolutely no impulse buying. And guess what? We've cut our grocery spending in half. Half!
Fun dollars are cheesy but cool: We budgeted separate "fun money" for each of us, aside from entertainment or eating out. This way we don't feel suffocated by our new budget, and can still buy fun things. For example, mine goes toward clothing, accessories and pretty things for our home. Any unused money gets carried over and therefore accumulates over time. If one of us wants to splurge, it means saving and sacrificing other fun items for a month or two. It really forces us to weigh our wants.
Stay on the same page: Purchases over $75 are always discussed, and there's an open conversation almost daily about where our finances stand.
Plan online purchases: Amazon and online shops get much more business from us. I used to run out of things and simply have to pay Kuwait's prices, because I needed it now. Example, my Maybelline foundation is $22 in Kuwait! Online...$8 with free shipping. Yep, this means taking stock of what we need a few weeks before we actually need it...and that's a little annoying. But it also means saving hundreds of dollars over the course of time.
Say goodbye to Starbucks: A medium Starbucks latte runs $7 here...and thanks to the Starbucks five steps from our apartment we used to indulge every other day. That's $200/month for coffee! Crazy. This month, we nearly cut out all Starbucks spending and opted for instant lattes we love. They're $0.50 a cup. I haven't darkened a Starbucks door in three weeks.
Bid farewell to credit cards: Our credit card wasn't used once in January. Credit cards are the devil. They really are, because you lack the feeling of having spent REAL money. Even if I'm getting a mile for every dollar, I'm just not willing to use them anymore, and don't carry mine regularly.
Build-in rewards for underspending: Any budgeted grocery, transportation, coffee and entertainment money that went unused gets carried over to be used on an agreed-upon purchase. Maybe we'll take a trip with our leftovers at the end of the year? Or buy something nice for our home? Who knows...but it is a great game that causes me to opt for less now.
When in doubt, think about your debt: This sounds yucky, but it's true. Sit down and tally up your debt...all of it. Credit cards, car loans, student loans, mortgage. It might be brutal, but it's your reality. Now sit with that number for a minute and really let it sink in. You owe that money. Scary, huh? Whenever I was faced with the urge to purchase something I didn't need and would put me over budget, I thought about that number. If not buying this trival thing, meant lowering that suddenly very real number? Even a teeny bit? Well, then I choose to live without this silly thing I don't need.
All-in-all...Month One was pretty rewarding. Dare I say...it made our marriage stronger? (Barf. I'm cringing, but it's true.) Seeing money saved at the end of January was worth the planning and small amount of belt-tightening it took to get there. And it wasn't painful. My biggest fear was that budgeting might influence relationships with others, since we were opting to be less free with our dollars. But, then I stumbled on this quote:
"People first, then money, then things." --Suze Orman
This truly guided our first month of budgeting. I never want to be the friend who refuses to split the check, because my entree was $2 less than my girlfriend. Yiiiikes, that's awkward. I'll still happily split the check or make it my treat. I'll buy reasonable birthday gifts and party decorations with a happy heart, because letting people know they're loved is so much more important than meeting rigid financial goals.
But, I've found that your true friends and loved ones understand if their gift is a little smaller, or if you're not quite as free with your cash as you once were. They get it, and won't let it effect your relationship. And sacrificing a few of your silly "wants" is worth it for your long-term needs.
To anyone thinking about starting a budget...do it. It's surprisingly empowering. And hey, maybe you can buy yourself some pretties with all the cash you save. :)
Did anyone else make financial resolutions this year? How are you fairing?