I decided today to share one of the greatest ways my husband and I found to find financial peace-of-mind for an entire year. It’s tax season so I know a lot of you are hoping for big refunds! Instead of blowing your refund on something extravagant, let me share what we do with ours! We, like most people, live from paycheck to paycheck. We also have a very tight budget FOR that paycheck! We learned the hard way that sometimes the unexpected happens and there just isn’t any money to pay for it. What do you do then, charge it on the credit card? Sounds easy enough, until the credit card bill builds and builds until you eventually can’t afford to pay even the minimum payment out of your normal paycheck! Here is what we do:
At the beginning of the year (before we get our tax refund) we sit down and try to think of all the expenses that come up during the year that aren’t in our paycheck to paycheck budget. Some of these things include oil changes and car registrations, birthdays and anniversary, cleaning products, back to school supplies and school lunch, vitamins, diapers and wipes and other household products. You know exactly what I’m talking about. It’s the things that get forgotten about until after you’ve already paid your bills and spent your money. Or it’s just the things that you can’t afford on your current income but you know you need. Then, after we come up with a total for everything, we add another $1000 for an emergency fund (because you just can’t foresee everything!) After we get our refund, we take this amount and put it into savings.
I like to be prepared and I hate to run to the store for 1 or 2 things when we run out, so I buy all of our vitamins, diapers, wipes, cleaning supplies, toilet paper, etc. for the entire year ALL AT ONCE! I know, now I’m sounding like a hoarder, right? This is where peace-of-mind comes. How many times have you made a special trip to the store because you were out of toilet paper, or diapers, or had to charge the credit card for an oil tune up you forgot about? I know that for at least the next year we have all of these things covered and I only have to worry about groceries and paying the bills! I just filed our taxes today. It would be so nice to use that refund to buy a nice sectional couch for our family room downstairs, BUT it is so much nicer to have financial peace of mind for the next year!
Here’s a fun game my husband and I play to help us get even more out of our “planned expenses” money. We think of something that we really want (like the before mentioned sectional) and we tell each other that if there is any money left over by Christmas time, we can purchase it. It motivates us to be frugal in our spending and to really focus on needs rather than wants. Last year, I got my extra freezer (I still need to go and buy it, just waiting for a good sale now 🙂 )
What do YOU do to find peace of mind in your finances?