I'm realizing that based on my other posts about shopping readers might think I lead a vapid, shallow life and am in debt up to my eyeballs. I'll not address the meaning and level of deepness in my life; however, I will respond to the debt issue.
Simply put, the only debt we have is Jake's student loan and our mortgage, both of which are tax deductible. People ask us all the time how we managed this. Part of it is luck, and part of it is strategic planning. We purposely moved into a smaller house with a smaller mortgage right when the real estate market started to take off, because we wanted to have a house payment we were comfortable with---although we easily qualified for a lot more. Then, we waited a couple years and refinanced, capitalizing on the huge appreciation in values housing underwent while still maintaining a low loan rate. This also allowed us to get rid of the PMI part of our loan, so even though we refinanced for more than we originally purchased, we kept the same loan payment.
We used extra money from the refinancing to pay off the car. That saved us $496 a month in payments. We then increased my 401k contribution from 10% to now 25%, with a 4% match from my employer. Jake just became eligible for a simple IRA at his work, and he is contributing 4% with a 3% match. In the meantime, we have each had Roth IRAs for several years now. I contribute $150 a month, Jake, $250 a month. We also have about $2000 in savings bonds and some CDs. Plus, we have a "hidden" savings account at a credit union where we do not have our checking account, that we have no ATM access to, and are thus only able to access it during business hours. We put all "extra" money into this account: bonuses, rebate checks, cash gifts, etc. As you can imagine, it has grown quite a bit since we never access it except to run through the drive-thru and put money in the account. We also have $50 from my paycheck added each pay period to our regular savings account, and when it gets over $500 we move the money into a higher yield savings account which we rarely have to access. Plus, as soon as my daughter got a social security number I set-up a savings account for her with $1200 seed money, and this is where we put all her cash gifts, piggy bank money, can redemption money, etc.
We take advantage of health care flexible spending accounts offered by my employer and next year will add the childcare account as well. When I receive the expense check for money spent from these accounts, I usually take that check and deposit it into our "hidden" savings account. That way it is like we never even had the money and it is just another way to force us to save.
Yes, I do a lot of shopping, and Jake likes his toys, too (like the pricey mountain bike he just ordered). I think what helps us is that even though I pay the bills, we talk about our financial situation on a regular basis and set goals together every year for one, three, and five years out. Any money we have left over at the end of the month is moved straight into savings and out of our reach. Since I only work part-time saving can be even more of challenge, and next year when Siena starts daycare I think we will be alright since I will be adding an extra day a week to my work schedule, and that extra day will pay for her childcare that week.
Jake and I have both known periods of unemployment, both before and after we married, and have had our share of low-paying jobs. However, we have always strived to live within our means and so far have been successful. When I was younger I got into credit card debt and made a deal with my dad to loan me the money to pay it off. He loaned me money at an interest rate higher than he would get on his savings at the credit union but lower than I would pay in interest to the credit card. I paid off the bill and and signed a loan contract with him and made my dad monthly payments until I owed no more. We did the same thing for the very first car I purchased. Thanks Dad! Being in credit card debt like that really taught me to never get back in it.
We don't keep a monthly budget per se....we just know what we have, what we want, and take the steps to get there without getting in debt. Sometimes it is a challenge and yes, sometimes we have to take money from our savings account for emergencies, but so far we are doing alright....and I still get to shop within these parameters.