Where we “Splurge” and where don’t in Our Budget

Our family has been living on a paper or digital budget for about eight years. Achieving our financial goals without this tool would have been incredibly difficult. Our budget has been our plumb line, and an intentional way to align our spending with our values. That being said, there are places within our budget for extravagance. Here’s where we “splurge” and how we do it.

Vacations - One of the most tangible changes in our budget after retiring our non-mortgage debt is that we began taking family vacations. We began setting aside money that would normally go towards debt towards making memories away from home. Each month, cash went into an envelope for trips, and sometimes we’d allot extra money from side work, bonuses,  or refunds for a yearly trip.  Using these funds, we have visited Minnesota’s North Shore, Bayfield, Wisconsin, Belize, and Washington State.

These adventures are even more relaxing for us because we funded the trip, including activities, food, and entertainment, via a cash envelope. A Visa bill doesn’t follow us home, and we are able to fully enjoy our time away and feel like we are splurging, even though the spending was all accounted for on the front end. Mindful splurging has allowed us to make wonderful memories without sacrificing our bigger financial goals.

Christmas - Our son was six weeks old for his first Christmas. (He and his twin brother were six weeks premature, and for other reasons, our son Jack had passed away on Thanksgiving morning.) As new and bereaved parents, our first Christmas was scant.  Our boy received a single book from us, our families received a framed picture of our twins, and that was it. Using that first Christmas as a reference point, our current Christmas gift giving feels extravagant.

Each month we sock away money for an incredible day of shopping in early December. My husband takes the day off  work, and we find care for our children while we spend hundreds of dollars buying gifts for the people we love. It is fun, it is over the top, and it doesn’t break our bank account. Since we have been saving since the previous January, we are able to enjoy all parts of the gifting experience without worrying about next month’s bill.

Giving - I have found that giving generously to people, places, and ideas that we value is what I enjoy most about spending money. We regularly give to our church and other missions working for good in the world. This giving is drawn automatically from our checking account and has been on the top line of our budget since we began applying Dave Ramsey’s Baby Steps in our life. This planned and measured giving reminds us regularly that the money  is ours to manage, and the world ought to look different because of the wealth that has run through our hands each month.

The most fun I have with money is to giving an unexpected gift that addresses the need of a person I love. We have purchased so many Financial Peace University kits for friends and family that we should consider buying them in bulk. Hearing the stories about how this class changed the trajectory of their lives is incredibly fulfilling. Sometimes we do this anonymously and it is a hoot hearing a loved one talk about receiving a gift never guessing that it had come from us. Sending flowers, gift cards, or a meal to help out a struggling friend gives hope when we feel powerless. I am grateful to have married a man who believes these  opportunities should be regular occurrences, and agrees that they are a big part of the reason we ought to earn money and build wealth.

Our regular monthly offerings are a line item in our budget, and, at this point, involve little discussion or thought. There was a time that we had a line item in our budget called “The Big Give,” which we’d contribute to regularly to  set aside money for addressing needs in our tribe as they presented themselves. However, we’ve steered away from that and have decided that funding our “spontaneous” gifts ought to come out of conversation, and a deduction from a different budgeted category. (Sounds really spontaneous right?) For instance, when we give an extra offering for Global Missions at our church, we often forgo a month of restaurants as a family to fund that gift. By doing so, our kids get to participate in generating the money by skipping something they enjoy.

Our money follows our values, and we ought to spend more on the things that are most important to us. People matter most in life, and so they should show up in our budget as places we can intentionally be extravagant. Mindful splugring has been a wonderful way to use the money that we’ve been given, and I am always looking for the next way we can pay it forward.

When You Know What You're Working of

Our family had committed to following Dave Ramsey’s Debt Snowball plan as a way to attack $55,000 worth of debt.  This mountain of bills included medical debt, a student loan, a 401K loan, and our second mortgage.  Our first fervor and intensity began to wane as we successfully eliminated the smaller loans but were now staring at the remaining $35,000 adjustable rate second mortgage. The second mortgage had looked good as a way to bypass paying PMI in the era of creative home financing, but now the monthly payment was increasing at an alarming rate.   We needed a bigger shovel to dig ourselves out of the hole we were in.  We wanted that loan out of our lives.

We had been living on one income for approximately four years and began to consider seeking additional employment to speed up eliminating that debt snowball.  While we were discussing the logistics of my returning to work or my husband’s picking up a second job, my husband was offered a new opportunity at his growing company.  A new role would involve traveling to clients every other week.  This new job came with a substantial pay increase; a six-month review would determine if it was a good fit both for my husband and for the company.

He lasted five months.

Flying a few times a month, communicating with toddlers via phone calls, and building a strong marriage without his physical presence each evening simply wasn’t sustainable for our family.  My husband had an honest conversation with his boss about the situation and asked to return to his previous position and compensation.

Here’s the thing: he returned to his position, but his employer insisted on paying him much of that salary bump because of the ways he had grown professionally over the previous five months.  I remember being shocked that his company was willing to support our family in this manner. Usually employees pay for training that will result in higher pay, but my guy received that additional training on the job itself, and received a reward for it.

Those five months were really challenging for our family.  While I do not want to relive them, I am grateful my husband took advantage of the opportunity, and I was able to support him.  Trying out the new job opened doors for him professionally, helped define work/life balance for our family, and increased the size of our financial shovel for his career.

I am confident that none of this would have happened without our understanding of our financial situation and the shared goal of eliminating our debt.  Knowing that we were working to eliminate our mountain of debt made it easier to make the shared sacrifices of the five-month new job experience.  On those tough weeks when I was home with two cranky toddlers in search of a break, I could remind myself that this would last only until our debt was retired.  When my husband was working eighteen-hour days, he could remind himself of what this short-term sacrifice would provide our family in the long run.

Over the years of teaching FPU, we had met numerous families who have taken on extra work, extra hours, grown their own business or sought side jobs in order to generate additional income.  Their willingness to dig in and do the hard work to meet their long-term goal constantly impresses me.

Last week all three of our children started school.  After twelve years as a full-time stay-at-home mom, I am gathering my courage, summoning my confidence, and channeling my enthusiasm to re-enter the job market.  We have lived and thrived on one income, we have a plan for the additional money my work would generate.  That, in addition to the dignity of paid work, makes me excited for this next chapter in my career story.

The Struggle is Real

This week my sister bought my Mom a sign stating the obvious, “The Struggle is Real.” As the kids have returned to school and we’ve worked to relearn the school rhythm and routine in our house, I’ve thought of this phrase a dozen times. My hunch is that I’m not alone in feeling overwhelmed with trying to balance the demands of the outside world and creating a safe home where our kids can be who they are as we steer them towards who we hope they will become. A few years back after reading a bunch of books in a short period of time, I was inspired to figure out the goals for my kids.

1. Love God
2. Serve Others
3. Want to Come Home

It often seems that the most important things in life are really simple. Parenting with the end in mind, has offered grace in the times that we have messed up and gotten lost in the struggle; this mantra reminds me what’s important. For instance, this morning my toothless child came bounding into my room telling me that she heard the tooth fairy in her room and was excited about the dollar but confused why her tooth was still under her pillow. We talked about how the tooth fairy that visits our house is pretty terrible, sometimes she even forgets to show up for a couple nights in a row! While this magical part of childhood is fun, it’s not critical to the adult I want my daughter to become, and reminding myself of that allowed me to let it go.

On the other hand, we see a direct connection between finances and faith and therefore actively teach that to our kids though example, conversation and intentional learning opportunities. We want our kids to love God, and part of building this foundation in their lives comes from recognizing that all that we have has been entrusted to us to manage for God’s Kingdom. These conversations are just as important as attending regular worship services, participating in youth events and serving with the church.  

We are offering a new class at Augustna Lutheran Church starting in October called Smart Money Smart Kids which focuses on the values behind having a healthy relationship with money. The class is designed for parents to gain new insights about topics such as responsibility, patience, giving, honesty and contentment and how to encourage those traits in their children. These traits all fall within the Sanford end game goals, and learning and teaching about fostering this in our children will be awesome.

If you are local and interested in attending you can learn more about the details and sign up here. The cost for the six week class is $60 and will be held Sunday mornings October 2nd - November 13th at 9:45. Sign up by September 18th so that materials can be ordered.