Things are better than I thought

Boy, it really pays to sit down with paper and pencil sometimes. I did it back in February and created our budget and it was really helpful. I think I planned too far in advance though. I'm thinking about trying PearBudget. Here's the thing about that, though: a spreadsheet is a spreadsheet is a spreadsheet, right? I've spent a lot of time tweaking mine on Excel and I'm pretty happy with its funcionality- it's my own fuctionality that is a problem!

But anyway, the main point is that we do bring in enough money to cover our needs and pay $700 each month towards our debt. The trick, of course, is sticking to the budget. This is the hardest part. All that discipline. It's hard enough for me, but I think it's twice as hard for my husband. One of the best things we've done is to open an additional bank account that is joint, but only he uses. I give him an allowance that he deposits into that account and he can use it for what he wants. It's not much, but it keeps me from agonizing over what I see as frivolous purchases- beer and tobacco. He's definitely the "nickel and dimer" in our family, so it's great to just hand him a chunk every payday and let him deal with his own bookkeeping.

That being said however, I am wondering how it is we do end up in such financial holes. I think it's because of not having anything set aside for big expenses. If I budget a set amount for clothing and we don't buy clothing, it burns a hole until we spend it on something stupid- usually lunch and beers or something. You know- "Well, we have $50 in checking, we could just buy lunch." The problem with that is when the kids outgrow their jeans, we have no money to replace them, so we charge it or when we are maxed out, like now, we get a cash advance. That's a cycle from hell, for sure!

The major flaw in our budget is there is no room for savings. I know the experts say pay savings first, and I guess we do, in a way. Our IRA contributions come out of our paychecks. But we have no emergency fund. That is where I hope to use snowflakes. I do have a little etsy shop that I need to work to keep stocked, I am searching for a second job, I am thinking about marketing some of my skills in my community (calligraphy, sewing) and I've started doing surveys online. Once our debt (currently $20,000) gets paid down a bit, I will build our savings more aggressively. Oh, also, the $700 monthly that I have budgeted for debt reduction is just barely above the minimum payments. That's how tight our budget is! Otherwise, I would pay slightly less for debt reduction and pay some to savings.

So, in a nutshell:

1. We must spend within our budget on each category
2. We must use our snowball towards our debt
3. We must gather snowflakes toward our savings for now

Okay, it's not good, but it's workable and that's the main thing. My biggest fear is that we had reached the point of not being able to meet our obligations. We can, but we cannot be lax about our spending AT ALL!