July budget meeting and savings update

A No Spend Challenge update; my family is saving for a down payment on a home (closing in February!).

Hubby and I had our budget meeting yesterday, as we always do at the end of each month. A couple of things I’ve learned about budgets along the way:

A budget is a living, breathing thing. It’s not a “one and done”.

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Every month we review last month’s spending. We talk about ways to reduce in every area. I see people criticizing the idea of budgets because they say budgets give you “permission to spend”.

Au contraire, mon ami. Pas de tout! 

Well, maybe budgets give some people permission to spend, but they only give me impetus to save.

Knowing what our monthly bills typically are (utilities, housing, petroleum, etc – things that aren’t discretionary) means we know how much we can safely put into savings without endangering our “four walls” (housing, utilities, food).  This was a lifesaver when we were getting out of debt, because we knew we could send very large payments to creditors without running out of money.

Every month I look for new ways to lower our recurring expenses.

Examples: in the last two months I’ve lowered our internet service costs and shaved nearly $200/month off our electrical bill.

This month I’m on the warpath about our car insurance. I’m investigating and checking prices from other companies online and looking into ways to lower our premiums (reminder to self: I need to sign up our newest driver for defensive driving).

Hubby’s homework is to call our cell phone provider and negotiate a lower bill. (If it doesn’t work, I’m cancelling my service and going with a low-cost provider like Republic Wireless or Ting.)

We discuss expenses unique to that month and add them to the budget.

For instance, new clothing for the kids as the weather changes, or needed household items, or car repairs. I used to be confused about how to handle irregular expenses. We tried having envelopes for sinking funds that we put cash into, but hubby found making frequent cash withdrawals a hassle. So instead, we simply put that item in the budget. It works fine.

My tactics for lowering the grocery budget tactics are working.

Groceries were under budget by $300 for the month, even though I wasted much more food than I’m comfy with last week (ugh – a constant battle for me).

Our house down payment total is now $12,274, meaning we’re halfway to our goal, so we’re on track to start house hunting at the end of the year.

Hubby had a great month and I did too in terms of income. We’re now working on getting our paperwork together to give to our banks so we can shop around for a mortgage. We’re making plans to meet with a realtor friend to discuss what we want. Things are getting real, real fast.

Any advice for a first time home buyer?

A few things I already know:

• Don’t get emotionally attached until after you move in, stuff happens
• Look up the crime stats and check the sex offender registry – if a “should’ve been hanged by the balls” pedophile lives next door, look elsewhere
• Have extra cash on hand for repairs
• Follow the inspector, ask questions, take notes, test windows, test taps, turn lights and ceiling fans on and off, look under furniture for clues as to the house’s condition
• Visit all times of day, talk to the neighbors, look at Google Maps and Street View
• Don’t overbuy. Our mortgage will be less than 25% of our monthly after-tax income. I have no interest in being house poor.
• Ask about utility costs – don’t want a leaky, inefficient house
• Check for dead trees on the property, look for wet areas in the yard, flooding potential, signs of termites and other vermin
• Don’t pay for features that will rarely be used. I’m interested in a house in which every square foot is used. I don’t want a fireplace, deck, formal dining room, or too much storage (minimalist here – my storage closets are half empty).
• Check appliances (if they’ll be left behind), look for leaks, make sure they work

Anything else? Thanks in advance!