How do you guys afford....

[EthansMom]

Like Crisi, my husband and I have a higher household income which certainly helps. But we also Live Below Our Means (LBOM) in order to have the kind of life we really want.

We stopped giving gifts to our adult relatives at birthdays and Christmas and limit our gift spending within our immediate family (approx. $100 ea. for DH, DS, and I) and for the nieces and nephews (who get $10 gift cards). We don't buy anything we can't immediately pay for -- including a recent basement renovation which came out of our savings, not a home equity loan. We try to limit our eating out. I usually buy my son's clothes from Target or Walmart and mine and DH's usually come from J.C. Penney's when there's a sale.

I track our monthly budget on Excel and make sure that our retirement accounts and college savings get funded first. We also make it a priority to pay extra towards our debts each month.

Like others say, it's all about priorities. We don't try to keep up with the Joneses. We don't have fancy new cars every two years, no yard service, no cleaning woman, no cable, no call waiting, no cable modem, no fancy dining out, no name brand clothes, etc...

But the cutting spending in other areas is what allows us to go on one to two nice vacations each year, have me be a SAHM, have a nice house, keep DS in swim classes ALL summer long, plan on paying for DS's college, and plan on an early retirement.

(For anyone who's interested a good book on budgeting and living within your means, I highly recommend "The Only Other Investment Guide You'll Ever Need" by Andrew Tobias.)

Basically, I started our budget by keeping ALL of our receipts and bill stubs in a vanilla envelope for a month. At the end of the month, I tallied up the bills and receipts into different spending categories to figure out what we REALLY spent. When I first started, I couldn't believe how much money we were wasting on some things -- eating out, the bookstore, and the coffeeshop were black holes financially. Once I knew what we really spent, I was able to make a framework for what I wanted to spend in the future.

I keep telling my husband that it's easier for us to spend less money than to make more.

Best of Luck,

EthansMom

 

[missypie]

EthansMom, how did you stop the adult gift giving? We stopped it at Christmas but it somehow continues for birthday ... my DH and I keep saying we want to stop ... at my birthday I had only a gift from 1 of the sets of adults and was thrilled at the thought that the gift giving had finally stopped ... but it turns out the packages were just late. Do you just start only sending a card and figure they'll get the idea?

I like the gift card idea...we've been doing that for the older nieces and nephews ... I bet everyone is old enough now that it would be appreciated (even if you don't save money on the gift, you save the shipping and the time it takes to box up the gift and send the package).

 

[skiwee1]

My DH has a great job that lets us buy and do what we please!

 

[missypie]

Love your honesty!!!

 

[maleficent1959]

Originally posted by missypie
EthansMom, how did you stop the adult gift giving?

I'd like to know that too. We have tried. One year my SIL got DH's family to agree to draw names, but his aunt went out and bought everyone gifts anyway. The next year several more people did that and then after SIL died the whole idea of a drawing went out the window. Last year we said we would only do charitable donations and asked everyone to do the same but everyone squawked. We ended up giving each family themed gift baskets of "gifts in a jar" that I put together. I guess they thought we were cheap because we never got a thank you. So this year they are all getting a card that says a donation has been made in their name.

 

[WIcruizer]

I keep telling my husband that it's easier for us to spend less money than to make more.

Can you tell my wife as well?

 

[WIcruizer]

Who in the WORLD takes out a LOAN to go to Disney World?! Sheesh.

We have in the past...about 3 years ago I think it was. But that ws part of a Home Equity loan for $20,000 that also included a car. The interest is all tax deductible, and we needed a car anyhow. So I just tacked on another $3,000 for the vacation and I'm paying it off over 5 years. If you do the math, I'm better off paying it off at 5% AND getting a tax break instead of paying $3,000 up front.

 

[crisi]

WIcruiser,

You'll pay about $3300 for that vacation. $400 in interest over 5 years. You can write it off, but unless you are at a really high bracket, it won't be more than $100 in tax savings. - So $3300. A lot of people (and I don't know if this is true of you) believe "writing off" money on their taxes means they take it all of the top of their taxes - you don't, you take it off your taxable income - so if you are in the 29% bracket and pay $1000 in interest, you'll "save" $290 - but you'll still have spent $710.

Now, a 10% premium may be worth it to you. I went to Europe in college on credit cards at 19% interest and it was worth every dime in interest - as after college when I would have had money, I couldn't have spared the six weeks, nor could I have travelled as cheaply (sleeping in trains and student hostels).

 

[barbeml]

Lots of good points here, and priorities really are key.

We have NO KIDS and NO DEBT. Well, most everyone has a mortgage, but that's it. Cars are paid off, we pay credit cards off in full every month. We live in a townhome (in a very desirable and now expensive neighborhood--but I bought pre-construction) and have no desire to trade up to a mcmansion (I can barely keep this house clean!)

Despite the combined six figures, we save change and have fairly simple tastes (prefer to have friends over for dinner to going out) and our jobs do not require extensive wardrobes. Our biggest indulgence is our annual trip to WDW, and we now drive because we prefer it.

As long as I have my WDW trips and can see an early semi-retirement (someplace closer to The World) at the end of the rat-race tunnel, I am a very happy camper.

 

[DiznEeyore]

Originally posted by skiwee1
My DH has a great job that lets us buy and do what we please!

Wow! Hope he never loses it!

 

[skiwee1]

Originally posted by DiznEeyore
Wow! Hope he never loses it!

Hope not too! If he does then he can come work for my company!

 

[disneysteve]

Originally posted by EthansMom
(For anyone who's interested a good book on budgeting and living within your means, I highly recommend "The Only Other Investment Guide You'll Ever Need" by Andrew Tobias.)

Two others that can really open your eyes to what separates the haves from the have nots...

"The Wealthy Barber" and "The Millionaire Next Door"

Sorry, don't have the author's names handy.


Steve

 

[jann1033]

this is an interesting thread...we don't go all that often however it is much cheaper to go the way you can afford rather than get into debt over it. when our kids were small we always drove ( from Ohio none the less) camped ( FW is wonderful and on property so all the fringes with out all the cost,,,now my grown up kids miss staying there!) and went in value season. we did not eat in the expensive resturaunt s all the time, we did for a "treat" night. I could have done better had I known about sites like this(lol) we never bought a bunch of over priced stuff we would never use/care about again. People think of it as a very expensive vacation but it doesn't have to be and can still be fun.

 

[MK Familystone]

Hi ETHANSMOM!

My columns on my general ledger are tittled:

Day Month ,Day of Week, Bill Title, Balance or Amount , Min Payment, Check Number or which C/C , Date Due, Amount Paid, Date Paid, Bill Balance.
All on one line for all BILLS of everyday of every month of the year for the last 14 years.
Summary line at the end of each week and summary weeks at the bottom of each month.
Each month is on page, with balances brought forward to the next month plus a year summary page of all months with each category broken down such as : food, clothing, trans,
fun , utiilties etec. which are divided even more .

WHY!
Because 26 years ago, my wife and I got caught in the 1970's recession and were layed off 3 months after our wedding
and honeymoon at The Golf Resot at WDW.
It took TEN YEARS to recover from the economic impact on our family but made it up in the last 14 years.

By the way LOTUS is now with IBM.

ENJOY your EXCELL!

"THE MAGIC HAPPENS!"

 

[EthansMom]

MK FamilyStone,

I use Excel because that is what I already have -- to darn cheap to buy something else. I basically keep a separate sheet for each month and delete the sheets from past months. Have a column that lists my spending categories, a column that lists projected monthly spending, a column for the actual amount spent, and then let the program compute differences. I have roughed-in sheets for the next 6 months or so. Have a separate sheet for Savings that delineates the purpose for all of the money in our savings accounts (Vacation, New Car, etc.). Also, have sheets set up that show the effect of paying extra towards our two debts (DH's student loan & our mortgage).

Like you we started LBOM after I was laid off a few years back. I was luckily only out of work for a couple months, but learned a valuable lesson and LBOM is the main thing that lets me be a full-time mom.

DH keeps trying to get me to try Quicken since it will automatically download debit card and check info. from our accounts on the internet. I may do that one of these years.

I also really need to get a good program for tracking our portfolio. Right now, it's all neatly in a three-ring binder, but that isn't too handy for getting a quick look at the big picture.

..................

Missypie & Maleficent,

We started spending less on gifts for adults about 3 years ago after we realized that between gifts, shipping, and travel costs to visit family at the holidays, we were literally spending thousands of dollars.

That first Christmas, we told everyone who had gotten us gifts in the past to please spend less money as we would be doing so ourselves. Then for the following Christmas, we told family members in about July/Aug (well before most people start shopping) that we really didn't need anything and that we would prefer if they stopped getting us gifts as we would no longer be giving gifts to the adults and would only be giving gifts to the children in the family. Yes, there were people who still gave us Christmas gifts and they received very nice thank you notes. This last Christmas, most people seem to have gotten the message -- very few gifts for DH and I.

I did get a birthday gift from my Grandma last year (a very nice coffee table book). I sent her a nice thank you note telling her how much I appreciated the book, but that I would prefer that she spend her money on something nice for herself. This year, she sent me a card with a note, which I enjoyed a great deal.

Likewise, with gifts for the kids, we had cut the spending down to $15 or so per gift (for kids who really have no true needs or wants). But shipping sometimes ran $8 for a $10 toy! So this year, each child is getting a $10 gift card for Target or Walmart for each birthday and Christmas. The kids will probably appreciate getting to pick out something on their own later.

With our son, we had to request that his grandparents limit birthday and Christmas gifts to one toy (however many clothes, books, & videos they want). They aren't totally sticking to this, but seem to have gotten the message and the worse excesses have been curtailed.

When we are invited to other children's birthdays, I shop for a $10-$15 item(s). Likewise, for Ethan's second birthday, I took homemade cupcakes, soda, & gift bags to his playgroup at the park and let everyone know "no gifts, please". Was easy, affordable, and everyone enjoyed it.

Basically, we no longer give a lot of gifts or expensive gifts and we don't expect them from others. Over time (esp. as there are more and more grandkids for our Moms and StepMoms to buy for), our family has grown to like the fact that they don't have to get gifts for all of the other adults.

Now, I spend the holidays visiting with friends, decorating the tree, sending Christmas cards, and baking -- things I like to do! (I also try to have my Christmas shopping done BEFORE December -- it really frees up my time and helps me relax and enjoy the season!)

As for family members who have called me cheap (yes, they have) and have asked why I choose to "live poor" (which I really don't understand considering everything we have and do). Well, I figure I'll get the last laugh when DH and I have our mortgage burning party, our retirement party (hopefully in mid-50s), and when our kids are able to go to the best schools that our hard-earned money can buy.



EthansMom

 

[toystorymom]

I've been reading this thread with great interest. We are planning a trip with our 3 kids in November and I really haven't told any of my friends because I know they are going to ask and wonder how we are affording it.

Can we afford it? I guess that depends on what you mean by that. We are not charging anything, didn't get a loan, etc. Tickets, hotel, etc. the big things, are paid for. The 1200 tax rebate helped alot, basically paid for our hotel/tix. We are just saving spending money now. We will spend only what we have. However, could we have used that money on other things? Sure. Our living room furniture is getting old, the mower needs to be kick started on occasion etc. but it was a choice we made.

The kids are so excited about Disney and we are really looking forward to sharing this family vacation. I somehow doubt that they'd grow up and think back fondly, "remember that year we got that new couch and love seat..."

We are also trying to be smart about it. We are going during value season, staying in a value hotel, planning on counter service meals and breakfast in the rooms. We usually go away for a weekend each summer, that ends up costing about $500. We didn't go this year and put that money into the Disney fund. We took the kids on several day trips instead - I know how to bargain hunt and they had a great summer!

DS4 had his birthday last month and grandma and grandpa were thinking of buying him one of those motorized motorcycles, cost about $150. Since the boys already have a jeep like that (also from grandparents a few years back) I asked if they would be willing to buy his plane ticket. They agreed and said they would do the same for the other boys. If things hadn't worked out this way, we would have driven and wouldn't have minded.

We live very below our means all year long - not to go to Disney, we just do. We rarely go out to eat, shop at Walmart, etc. all those things others have mentioned. My good friend has been going through a tough financial situation for about a year now. She's the one I really dread telling. However, this spring she bought new living room furniture which cost close to $2,000! Her rationale? No payments til 2004.

I know this is getting long so I'm going to shut up now. My bottom line is that it all depends on what you choose to spend your hard earned money on. This year we've chosen Disney and the 5 of us can't wait!!!

 

[jessiesue]

I'm a SAHM of 3 DS's. My DH is self employed and makes an average income. We use coupons, buy end of season clothes, etc. We do pretty much what other people on the boards do to save money. I think the key to being able to take many wonderful trips is how much you spend on your trip. We could go for a week, stay on Disney property, fly to Orlando and rent a car, eat all our meals out, attend character meals and buy a lot soveneirs. But we choose to go the other route so we can get more for our $ and take more trips. We have not stayed on Disney property because we can rent a 2 bedroom villa for $250 a week. These are very nice villas with washer & dryer, full kitchen, jacuzzi's etc. We drive because it would be too costly for 5 to fly. It takes us 12 hours. Sometimes we spend a night on the way and sometimes we drive straight through. We might eat 1 or 2 meals during the whole week at a counter service. If we do, I bring our own drinks and that cuts down on the costs. I usually pack our meals and snacks. We have never attended a character meal and my children are not upset because they don't even know about them. I'm thinking about attending the ice cream social with Mickey. DS's usually buy 1 soveneir. They prefer to go to Walmart and pick out something than to buy it from Disney.
Everyone has their own agenda for trips to Disney. If we wouldn't have a great time when we go, I would defintely change it. But we love our trips! We are leaving for 2 weeks next Friday! Can't wait.

 

[MK Familystone]

HI ETHANSMOM!

Suggest you graph the month summaries for one year and compare the graph with previous years.
Line graph will show the months of high cash outflow in a big picture.

The trick is to be aware of the low and high cost of living months.

OR subtract the monthly total cash payout from the your monthly income and graph the net gain or loss of the months.

ENJOY!

"THE MAGIC HAPPENS!"

 

[WIcruizer]

You'll pay about $3300 for that vacation.

That's only part of the equation. You spend $3,000 up front, meaning you won't get any return on that money- it's gone. I invested that $3,000 and have averaged about 9% return in the last 3 years. At that rate, I will have over $4,000 after 5 years, minus the interest. So I come out ahead.

 

[ducklite]

Here's another idea. (Actually two)

1. What interest rate are you paying on our house? It might be a good time to refinance. But, keep the TERM the same, so you aren't just borrowing money for a longer period than you have to. So if you've been paying for nine years, refinance into a 20 year loan.

Figure the difference in the payment every month with the lower interest rate, and let's say you're saving $60 per month, out that money aside into a "Disney Fund". It will add up quick.

2. Take a low interest HELOC and literally pay a chuck on your regular mortgage with the HELOC. Then have an accountant friend figure out how much interest per month you are saving if you continue to make the same principal payment every month between the two loans as you had been on the one, what ever is left over is "savings". That's a hard concept to explain, and you'll have to be VERY sure that you're disciplined enough to make those principal payments (plus the interest) every month on the HELOC, as most are interest only for a certain term with a balloon payment at the end. Make sure there's no prepayment penalty either. Again, figure out the monthly savings and stash that money away for a trip.

Anne