Guest post from Leanne of Cooking With the Johstons
When I was a teenager, my parents divorced and I saw first-hand that the number one cause for divorce is money problems. As a young adult, I did what I knew and overspent.
At 24, I overdrew my checking account for the umpteenth time. What was different this time was that I had also gone over my limit on all four of my credit cards. I had no cash, no savings, and no safety net. While I’d spent years overspending and overdrawing, this was rock bottom.
Because of that experience, I created a budget. It was the first time I saw on paper that I was spending far more than I was earning and had absolutely nothing to show for it but a car payment, credit cards, and student loans.
Shortly thereafter, I discovered the Dave Ramsey’s Baby Steps. The concept of living below your means was completely foreign to me. I started to live differently. For the first time in my life, I had peace about money and my future.
Two years later, when I met my husband, I was well on track of being debt free within the year. When we married, my debt turned to our debt. Combined we had $117,000 and were making $40,000 a year; however, we had peace and a plan because we had a budget.
A budget saved our marriage before it even started — here’s why:
- Having a budget means having a plan — a budget frees us to tell our money what to do each month. We have a plan for every dollar that we earn. We have lots of dreams for the future and know we will achieve them because we have a plan.
- Having a budget means having peace — things will happen outside of your budget. Children get sick, windows break, and cars break down. A budget takes the emergency out of these situations. It brings peace into the financial inconveniences of life.
- Having a budget will change your future — without a plan, you will wander aimlessly. Without a budget, you will spend aimlessly with nothing to show for your efforts. A budget puts effort behind dreams.
- Having a budget helps you stay on the same page with your spouse or family — My husband and I know how much money we have, where it needs to be spent, and what our financial goals are because it is in black and white. If it’s not in the budget, it doesn’t get spent. If we want to spend money on something, we need to agree on it and add it to the budget.
My husband and I have incredible peace in our marriage because of our budget. Our plan allows us to give generously, save for our future, and be in control of our money. Our infant son will have the skills necessary to manage his money and make an impact in the world.
Leanne is an organizational whiz working with youth and young adults in Fort Worth, TX. She is a seminary graduate and a walking warrior. She’s the nerd who loves spreadsheets and finding a good deal. She lives in the Dallas area with her husband and infant son, Wesley. Visit her blog, Cooking With the Johstons.
I just want to second Samaritan Ministries! We had our third home birth with our beloved Certified Professional Midwife, (around $1500 here) after joining, and the shares that other members sent completely covered that. Obviously your mileage may vary, but it would definitely help quite a bit with a hospital birth as well.
Most people I know can’t get ride of their car or their car insurance. Car insurance is a requirement to those who own a car. Have you ever been hit by someone who has no insurance? It’s not fun!
I agree Becky, though not all states require car insurance. I live in a state that doesn’t require car insurance and as a result, we pay a lot for extra non-insured motorist coverage on our policy.
Great post! My husband and I are finally getting this-After being married 10 years!
great post! for us the hardest part with budgeting is being on the same page. my husband is a spender and I am a saver. but he is learning to save and I am learning it is okay to splurge occasionally when we have some extra cash.
for me the hardest part is unexpected medical bills 🙁 I had to put $20,000 worth of medical/surgery bills on credit cards and that is killing us.
I’m also sad because I don’t have maternity insurance and really want to have kids. Anyone have advice on this?
If you pay cash, some doctors will accept a lower rate than what they bill insurance. You could also try a midwife or birthing center. Some places let you set up a payment plan.
My husband recently turned down a job opportunity because they didn’t offer health insurance, and I have a thyroid disorder and am newly pregnant!
Have you ever considered looking into opening your own individual health care plan? I really don’t know much about it, other than you can shop several health care providers much like you would for car insurance.
Also, I have a friend that is extremly pro mid-wives and home births. Maybe this is an option that could work for you and your family. I wish I knew as much about it and she does.. something to consider.
We had two babies at free-standing birth centers and the whole package cost for everything (without insurance) was less than $5,000 — including all prenatal and postnatal visits, bloodwork, etc.
All certified free-standing birth centers also accept most major insurance providers. We were very happy with both of our birth center births, though I’m sure that birth center experiences vary widely.
You can find info on birth centers near you here: http://www.birthcenters.org/birth-center-locator
thanks for the tips ladies. unfortunately where we live there aren’t any birth centers 🙁 it’s sad!
we’re going to attempt to save enough money to pay cash in hopes of getting discounts but I’m already almost 30 and want to have 4 kids and I don’t know how we’ll be able to pay for it 🙁
Oh and here in OH individual health plans don’t include maternity insurance and that is why I don’t have it 🙁
There is ONE midwife about half an hour north of here that I plan to look into. I also am planning to check out of the hospital early as long as there are no complications.
Denise, There are definitely ways to go about it without getting yourself into debt. Having cash is a great negotiating tool! Mid-wives are a great option – we used one with my son. I added a maternity rider to my independent insurance before I got pregnant when insurance was not furnished by my employer. Is this an option in Ohio? It was fairly expensive – $300/month or so. If that’s an option, it might make sense to add it…but it also might not make sense because paying cash could be cheaper. It’s a difficult thing because if everything goes smoothly, birth isn’t that expensive (ours was less than $5000, so expensive is relative!) but if things don’t go perfectly, it definitely adds up!
What is maternity insurance? Is it separate from health insurance? I live in OH and our health insurance has covered all 3 (soon to be 4) of our kids (minus the small deductible). I’m not very intelligent on insurance so I really am asking in order to learn something.
A maternity rider on my insurance would cost me $380/month and include an extra deductible of $3000 so it will be cheaper to pay cash.
Amy, most group health plans include Maternity coverage. I’m on an individual plan that does not. Unfortunately my husband works in a very small business that doesn’t have group health for me to join in on.
I’m also in OH and that was the deal why my DH turned down that job offer. You can also call the hospital billing department and ask the cost of L&D stay. Remember that if you end up needing a c-section, you have to stay in a hospital.
Don’t forget to look into Medicaid if you qualify under the income requirements.
I am in Ohio and most of the hospitals also have a prepay option for those without insurance that is around 2,000 for reg. delivery and costs a little more if you have to have a c-section. Alot of the hospitals that have this option also have OB clinics that are alot cheaper and sometimes included in the cost.
Look into Aflac. You can get a hospital policy that will pay you cash when you are in the hospital. With my 1st baby I actually made money after our regular health insurance and my Aflac policies.
I have a friend who just used Samaritan to have a baby and literally only paid $300. You might want to check it out.
http://www.samaritanministries.org/
I don’t know your whole situation so this may not apply. We have had some major health bills in the last two years (my husband has cancer and had a lung removed, chemo, radiation, etc). We never put anything on a credit card because almost all of the doctors and hospitals let us pay them over time, only one sent us to a collection agency and the collection agency is taking payments. The doctors and hospitals are not charging interest. So if it is at all possible negotiate with the doctors & hospitals rather than putting it on a credit card.
Unfortunately the hospital/dr I saw would have sent me to collections 🙁 Their only payment option is splitting your payment into 3 payments over 3 months! I have a low interest rate on my credit card so it wasn’t so bad. We’re starting a second job in Dec. or Jan. when my mother in law retires from it so we’ll have a 3rd income between the two of us soon! I’m glad your dr/hospital worked with you though Beth!
Beth,
Sorry to hear about what your husband is going through. It must be tough. Just wanted to encourage you that I care.
Thank you Carla, I really appreciate that. He is healing slower than the doctors expected from the surgery, they don’t want to do any other treatment until he is healed more. This means we are doing one of my least favorite things- waiting!
Denise, I am happy that you will have an increase in income soon. I hope everything comes together for you guys.
I agree that no savings still equals stress in an emergency even with a great budget. Just a note of encouragement to those who have no or very small savings, even a couple hundred dollars saved will really make a difference in small “emergency” situations. It really does help make some of the smaller life occurences less stressful and less of an emergency. ex. doctor visits, tire repair, appliance breakdown, etc.
I am not married – but am in a very committed relationship with my boyfriend. I struggle with this.. trying to nudge him into being better with money, but at the end of the day we have our own banking accounts and he spends his money how he chooses.
Anyone got any advice?
For example: He constantly eats out on his lunch break. I buy food for sandwichs, etc. He has a lunch box. I “nag” him about it. (I use nag loosely..) But short of me making his lunch for him and handing it to him as he walks out the door, I really don’t know what to do.
We call it “personal money” in our house 🙂 a set amount of money each pay period goes to our separate checking accounts, for which we have our own debit cards, and the rest goes to our joint account. For us, this money covers gas, clothes, haircuts, lunch out, Starbucks, pedicures, and any other random things for ourselves. Right now, we get $175 every two weeks. When it’s gone, it’s gone. That way if he wants to buy lunch every day he can and if I want a mani/pedi I can without us having to micromanage the other persons personal spending. It’s also a small way for your boyfriend to be introduced to budgeting and when he runs out of money before the next pay period, he’ll start making his lunch or he won’t eat 🙂
If you see the relationship going anywhere, then you need to be on the same financial page. If you’re not, then you have years of turmoil ahead of you.
Stop nudging. Have a serious conversation about money.
I am in the exact situation, it may seem easy but men tend to spend the way they want even after the nagging. And when there is no ring on the finger, how much can you actually say? I totally understand. Hopefully your influence will help in the long run. I really love Crystals idea of personal money. It seems like it will be the way to go when it comes to marriage.
Sorry Catherine’s Idea!***
At least “with no ring on the finger” you have the option of judging whether the differences of attitudes with regards to money will be a deal-breaker when it comes to marriage or not. Better to find out beforehand than afterwards!
I agree with most of what you’ve written, but a budget only brings peace in emergencies if it includes a savings plan or a “slush” category to cover the unexpected. If your budget is so tight that you have nothing left to save each month, financial emergencies will still be stressful.
To Andrea: If your budget is so tight then you may want to cut your expenses. Cable, cell phone, internet, a car, and car insurance are all things that can go. Maybe think about moving into a smaller less expensive place or just get an education so that you can get a better job. There are options. You just have to sacrifice something to have financial freedom and peace of mind. I just can’t stand when people say it’s not possible. It’s possible, it’s just hard.
I was pointing out a flaw in the way the tip was written.
Budgets don’t miraculously solve problems faced by the 8 percent of Americans that are unemployed and the nearly 20 percent that are underemployed. There are plenty of very frugal people out there that have cut everything they can and are still just scraping by. Budgets help, definitely, but become even more useful and stress-reducing when they include a savings category.
Agreed. I am currently unemployed and single. I have cut everything down as much as possible but unfortunately there are some things suggested that can’t be cut– I have the cheapest cell plan available and a car w/car insurance is not something I can go without.
And the comment “just get an education so you can get a better job” in my opinion is extremely judgmental. I have a Bachelor’s degree and have taught for over 3 years but unfortunately with the ways of the current economy it’s not easy to get in to the teaching field anymore (I was let go along with 10 others at my school before Christmas). I could get a Master’s degree but that would cost me $50,00+ so thats certainly not going to be saving me any money or even guarantee that I get a job. It took me a year to even secure a job in the first place.
I’m debt free currently and have everything cut as low as it can go. Sometimes there really isn’t any more that you can do.
{Hugs, Kristin!} I’m so sorry you’re struggling so much financially!
I’m so proud of you for being debt-free, though. I’m sure you’ve looked into many different things, but if you’d like some extra ideas for ways to earn money while you’re looking for a new job, here are a few ideas:
https://moneysavingmom.com/2012/04/27-ways-to-make-money.html
So sorry for your job loss. This, however, might be the perfect time to get your masters. I got mine in Reading through Walden. At home. My own time. Only 11,000. It paid for itself (through salary increase) in only one year!
Also, cass, thanks for the tips. They might be useful for someone else, but we’re debt-free except our mortgage and are putting plenty into savings each month.
Andrea, having a budget also allows for flexibility in emergencies. Prior to having a budget, if my car broke down it was a crisis. Now if I don’t have enough in my car repairs envelope, I can move money around in my budget and make things work. I also have the power of cash to negotiate and get a good deal. If I just put repairs on a credit card I am not nearly as careful with getting the best price. We do not have a “slush” category, but our plan allows us to really evaluate what is most important each month.
To my understanding, this means that your budget includes discretionary spending, has wiggle room or that you’re “robbing Peter to pay Paul”.
For every person that has that flexibility, there is someone else that doesn’t.
I’m sorry if my comment came across as rude enough to warrant this kind of response. I simply meant that in my experience, having a budget gives the flexibility to decide who gets paid and who doesn’t. That doesn’t mean discretionary spending, more prioritizing. Of course some folks have more flexibility within their budget than others and creating a budget doesn’t create income or eliminate bills.
Your comment wasn’t rude and I didn’t intend for my response to be rude, either. I’m sorry if it reads that way.
Wow I’m surprised at some people’s attitude… Here is some encouragement, someone further down the line said this “I agree that no savings still equals stress in an emergency even with a great budget. Just a note of encouragement to those who have no or very small savings, even a couple hundred dollars saved will really make a difference in small “emergency” situations. It really does help make some of the smaller life occurences less stressful and less of an emergency. ex. doctor visits, tire repair, appliance breakdown, etc.” We don’t have much in savings but at least I know it wouldn’t all go on a credit card if we had an emergency and that def makes it a little less stressful. Maybe see if you can even spare $10 or something a month it adds up….
I totally understand, Andrea! Until a couple years ago when things were going well, I wouldn’t have understood though. We are a family of 4 living on $10.50/hour. We have a small house so the payment is reasonable. We have basic internet and one cell phone with no bells and whistles. Food is at a minimum and then we have utilities and gas. There isn’t any wiggle room. When my husband doesn’t get overtime, we’re in the hole.
RachaelP, {Hugs to you!} It sounds like you are doing really well with the difficult circumstances you’re in right now. Stay encouraged and don’t lose hope!
Here’s a post that might be an encouragement to you:
https://moneysavingmom.com/2010/10/qa-tuesday-is-it-possible-to-save-money-when-were-barely-keeping-our-head-above-water.html
Also, I’m not sure if there’s a way for you to consider some extra side work that you and/or your husband could do on the side, but you might check out the post I shared with Kristin above, if you’re looking for more ideas.
There are also a number of ways to make money ideas here:
https://moneysavingmom.com/2011/06/ask-the-readers-how-can-i-earn-1000-per-month.html
I’m glad you understand what I was trying to say, Rachael, but I’m sorry you’re in a finically lean season of life. I hope it passes quickly.
We tried in the past and just didn’t see to get it right. We found Dave Ramsey about 6 months ago. It has been such a blessing. Before there was tension when we talked about bills and what money was left. I felt guilty to spend anything on myself and both of us have done things that put us in a bind. Finally at 31 we are so much better financially then we have ever been in our life. And amazingly no more tension when we talk about money.
A budget has built trust in our relationship and has made finance discussions so much easier. I can’t believe we went 14 years without one.
I agree that one of the benefits of a budget is being on the same financial page as my husband. We have been married three years and have never fought about money.
Well written!!! We have peace in our marriage, too. It wasn’t always this way…. what a blessing it was to find Dave Ramsey’s plan. Both our marriage and finances got stronger! Great post!!!
“Having a budget means having peace” – so true!!
Great post! Thanks!
My husband and I are just starting a budget. We have been so foolish with money that as of right now we don’t even have the money to make a budget…seriously, when we try to work the numbers it always ends up negative. We are faithful in tithing though and I believe this is why God always gets us through the month! In a little over 2 months a big loan we have ($576 a month) will be paid off, then we will be able to actually work a budget.
We just started FPU a few weeks ago. Since we started we have been spending absolutely nothing extra! Posts like this one are an incredibly encouragement to me!