My Super-Charged Life

Sign-up now to receive our articles for free via RSS or e-mail. Thanks for visiting!

I have lived on a budget for almost two years now.  As a result, I have paid off all my debt except the mortgage and have began building an emergency fund of 3 to 6 months of living expenses.  Living on a budget has taught me a lot about money.  In Part 1 of this series, I wrote about how living on a budget changed my attitude toward money.  It helped me to realize that budgeting is the path to a wealthier, freer, and simpler life.  I overcame several reservations I had about budgeting and as a result learned some very practical lessons.  Yesterday, I wrote about the first five of these practical lessons.

This is the final article in this series.  Here are my last five practical lessons I learned from living on a budget.

1. A book from the library reads just the same as the one from the bookstore.
   I am a big fan of books.  I read constantly.  I am also a huge fan of the library system.  I think it is one of the greatest American institutions.  What other establishment operates on what is essentially an honor system?  Books from the library are obviously the same as the ones that you can buy except they don’t cost anything and you don’t have to store them once you are done reading.  I do buy some books.  Ones that I want to read over and over, but I check out most of my books from the library and it has saved me countless dollars over the years.  Living on a budget drove home the value of the library system to me.
2. I can eat lunch on $25 per week and get by on $30 of spending money per month.
   That’s right.  For almost the last two years, my weekly allowance for lunches has been $25 and I have only given myself $30 per month to blow.  This was one of the things that I resisted the most when we first started our budget.  Previous to the budget, I withdrew whatever I needed to eat out for lunch at work everyday.  If I ran out of money mid-week, I just withdrew some more.  If there was something I wanted to buy during a given month, I usually got it.  The justification in my mind went something like this, “I work and earn a good living.  I should be able to eat out for lunch when and where I want.  I should also be able to treat myself to some fun things once in awhile.  I deserve it for working so hard.”  This was short-term thinking and selfish.  I was overspending and it was hurting my long-term objectives.  I have successfully adjusted to my new allocations in these areas.  In fact, even though I thought it would be impossible to eat lunch on only $25 per week, I have, on most weeks, been able to save a little of my weekly allowance to put in a date fund for my wife and I.  If I want something that costs over $30 in a given month, then I have to save for a few months to get it.  This discipline has helped me make choices and only spend my money on things that I really want.
3. You don’t always have to spend a lot of money to have fun.
   Living on a budget has forced my wife and I to become more creative about how our family spends its time.  We have found that it is still possible to have fun without spending a ton of money.  For instance, we still go out to eat as a family, but we do it less often and are choosier about where we go.  We try to get the most bang for the buck.  We have also found that our daughters enjoy less expensive vacations like camping or just going to a decent hotel with a pool as much as they might enjoy something like a theme park.  It is all in the approach.  With kids in particular, they seem to have the most fun when we get involved and play with them.  Frugal Dad has written about their family fun nights.  We do this on occasion and have developed our own family movie night where we rent a DVD and watch it as a family while eating something fun like tacos or pizza.  There was an initial adjustment period when we first started our budget, especially on the weekends, but now we have our things we do and it all works.  A side benefit is that I think we get more quality family time.
4. A budget is a plan and not something written in stone.
   I have learned that a budget has to be flexible.  Life happens.  A budget needs to adapt to life.  Another way I like to describe a budget is as a spending plan.  Plans change when circumstances change.  Our budget has evolved over time.  Sometimes it is the same for several months, but then other times we adjust our budget every month or even in the middle of the month.  We try to anticipate before the month begins when there are going to be additional expenses in a given area.  For instance, May is a month where we have several family birthdays and Mother’s Day.  So, we adjust our budget in May to be sure we have funds available to buy the appropriate gifts.  When we do this we always have to move money from one area to another to cover the expenses.  We never spend more than our income in a given month.  Learning to be flexible with the budget and to anticipate when changes are necessary took time.  We got better with experience.  For the last year or so, we have been very good at it.  However, it can be a struggle at times.  Madison at MyDollarPlan wrote an article recently discussing her challenges with unexpected expenses. 
5. We don’t want to be ultra-frugal forever.
   My wife and I are pretty conservative people.  We have been very intense about paying  off our debt over the last couple of years.  Now we can start to loosen up a little.  I know we won’t go back to our old ways of overspending nor do we want to.  Living on a budget has taught us life is better this way.  It has changed how we look at money.  We will always have a budget because we always want to have a plan for how to invest our money.  However, now that we have financial margin in our lives, we don’t have to be ultra-frugal forever.  We have already made some adjustments in our budget to give ourselves some breathing room in a few areas.  The idea is that we have really tightened things up in the beginning so that we can accumulate wealth and be able to have and spend more as we go.

Well, I hope by sharing what I have learned living on a budget that it will help others to first of all choose to create a budget and then be encouraged to stick with it.  I am 100% convinced that it is a tremendous benefit to me.  I feel confident that I am so much better off financially today than I was when I started.  My net worth has gone up and I am making smart use of the funds I have.  I can’t wait to see where I’m at 5 or 10 years from now!

If you enjoyed this article, please give it a Stumble or Digg so others might find it and benefit from it as well.  Thanks!

Photos by Andrei Z and Lion’s Mane and Unhindered by Talent