Maybe it’s because it has been back to back snow days and frigid temperatures here in Minnesota, but I am dreaming of vacation big time. Over the last few years, as we have worked to pay off our debt and save more money, I have become a lot savvier when it comes to finding sneaky ways to save money on vacation. Here are some of the best tips I have found that have totally worked for me and my family.
The first time I started a budget I did it all wrong. I started with our monthly income, subtracted mortgage, utilities, car payments, and credit card payments. Imagine how happy I was to find money left over! Hooray! We had money to spare after paying all of our bills! Little did I know, I was doing this totally wrong, and it’s part of the reason we stayed in debt for so long. When I saw that we had money left after paying our bills, I thought we were doing pretty good. In this post, I want to discuss my three major budgeting mistakes. Why instead of having money leftover, I should have ended up with a total of $0. Unfortunately, most people are making the same mistakes I did. Let’s review what these mistakes are and talk about what you can do to change them.
We have been budgeting for about 5 years now and our first budget was really not great. We tried, we definitely thought we were doing our best but there was still so much we were missing out on. It’s no wonder we continued to struggle financially. Now that we have a good handle on our budgeting, it’s crazy to think about all those little things that would jump up and bite us in the butt (financially speaking) but we never took the time to change our budget for them. This is how it goes for a lot of people. After subtracting your bills, you think you’re all done budgeting. In reality, you have only spoken for a portion of your total budget. After sitting down to budget, if you don’t find yourself with a balance of $0 then you’ve missed something. Every single cent should have a place. It’s like doing the laundry, you don’t just put away your work clothes, the important ones, and just leave the rest in a pile on your floor and call it a day. Well, maybe you do; but you should definitely not do this with your money! So what are some things you might not be budgeting for, but you should?
When we first started getting serious about money, budgeting and paying off debt, all the things we read got to be really overwhelming. The different books and articles we read would say things like, “Build up your savings.” “Get all your debts paid off.” “Don’t get behind on your bills!” “Don’t have a credit card.” It all felt so overwhelming that we weren’t really sure where to start. Even though we got the debt snowball rolling, and kept adding to our savings we weren’t really able to fully dedicate ourselves to our finances because we were getting pulled in so many directions without any real guidance or game plan. Then, when we started Financial Peace University, we were given the answer to our biggest question. Should we be saving money or paying off debt?
For the majority of my life I had a negative mindset about money, making money and saving money. But I had no idea how to change it or that it was even wrong. I wanted money, that’s for sure. Money was the cause of most of my stress, but I just couldn’t seem to get a handle on it. I know I wasn’t alone. In fact, America has hit an all time high in credit card debt; around 1 trillion dollars of debt to be exact. How can something we think about so often, something we want so badly have this negative affect on us? The truth is, like most workings of our mind, we just have to change the way we think about it. Finally, I feel like I’m at point where I finally have a healthy money mindset and it is not at all what I imagined it to be. There are steps and understandings I had to take to finally get a grip on my out of control money habits. So let’s talk about creating a healthy money mindset.
It’s no secret that Tom and I have struggled big time when it comes to finances. During those times in life when we had less kids to worry about, more time and money we made terrible choices. What could have been the best savings years of our lives turned into the best chain restaurant years of our lives. We had all the latest in movies and clothes and we found something to spend money on every weekend. Still, at the end of the month we found ourselves penniless. (I guess it’s easy to see why.) If only time travel was possible…I would totally go back in time and kick my well dressed butt. These days, we have dug ourselves out of some serious debt, gotten our priorities strait and we have sinking funds to thank for a huge part of it.