This is the list of all expenses that are generally short-term commitments and flexible in their amount. Initially, try to get a handle on where you are spending your money right now. Once you have that written down and can get the picture of how your income is being used, you can begin to make adjustments based upon your goals. So, be realistic and honest in this step! I will write more about how to cut some of these costs down in the next section, but for now get a handle on your spending. You will be able to make better decisions if you plan spending ahead of time, together with your spouse. Remember that accountability is very helpful!
During a month, try to keep track of the normal expenses within this category. However, it may be that you only make a sizable purchase to restock your reloading supplies or soap making supplies or other prepping materials, which can often be obtain at greater discount when purchased in larger bulk. Do your best to figure out what is a realistic amount you need to spend over the course of the year for these items that you only buy once or twice a year and then divide the cost into months, so you can properly determine how much of your monthly income should be set aside for those future expenses.
For gifts, list the people you buy gifts for each year and about how much you spend for each person and then total it up and divide by 12. Apply these same steps to other categories to obtain monthly estimates for each category of flexible expense. These categories (in no particular order) include:
- Gasoline. Remember to include extraordinary use, like car trip vacations that might be taken in the summer or at holidays to see family and friends.
- Vehicle repairs and maintenance. Include tires as well as oil changes and repairs. Repairs are hard to estimate in advance, but set some money aside especially if you have older vehicle(s). More will be needed if you require a garage to do the work rather than you just buying the parts and making repairs yourself. For a seven year old truck, you are probably spending (or needing to save for future expenses) $100-200/month. If you live in town or the city and must transfer clients in your vehicle where you require a full service car wash/detail every week, then you may be adding another $40-150 per month, depending upon the services required and your location. Edmunds provides a resource to estimate the total cost of ownership of vehicles since 2010. Part of the information available on this website is estimated repairs and maintenance for various makes and models over the course of the first five years of ownership. If you have a newer model vehicle that you recently purchased, you could use this to estimate your repairs and maintenance. There are other sites as well to help find average costs.
- Clothing. Include purchases of everyday street clothing, work clothes, hunting/survival/tactical clothing, vacation clothing, church clothes, shoes/boots, coats, gloves, hats, jackets, hunting/camo gear, swimsuits, and anything you and your family wear on your body throughout the year– winter, spring, summer, and fall. (I do list fine gold and silver jewelry separately, because it has the potential to be used for barter or trade as something of high value rather than merely a functional item, like clothing.)
- Laundry/dry cleaning.
- Children’s toys.
- Home school/continuing education.
- Dining out. A lot of people do not realize how much they spend in this category. Keep receipts and add them up for a full month. Include breakfast, lunches, and dinners as well as those quick runs to the mini-mart/dollar store for frozen dinners, candy bars, ice cream, chips, and soda, too! Those are conveniences usually purchased at premium prices. Either place them in this category or in groceries, but do not exclude them.
- Groceries/cleaning supplies. Keep your receipts for an entire months and total it up. Don’t modify your purchases yet.
- Livestock/pet care/veterinarian services. Your expenses for medicines, neutering/castration, injuries/illnesses, basic first aid supplies, as well as securing their area (fencing, kennel, or cage), feeders, watering supplies, hygiene, feed/seed, vitamins, and toys, and anything else specific for your animal(s).
- Household maintenance. Whew! Our homes need lots of TLC, don’t they? This is especially true of the older homes, but it is true of even the brand new homes. At a minimum there is the A/C and heating maintenance, light bulb replacement, battery replacement in fire and carbon monoxide detectors, but there are plumbing issues, electrical issues, and simple little functional things that need attention, like drawer sliders, door knobs, and key locks. It is conservative to say that a person should budget $100/month for household supplies, especially if you have a home that is not “newish”, and if you must hire help for even minor repairs then I recommend that you budget more. Take a look at what you have spent in the last year, if you have receipts. Some of the stores, like Home Depot, let you email your receipts to yourself and then you can electronically keep track of expenses over time, but it is best to keep paper copies in case we lose our electronics.
- Yard/land maintenance. Do you have to mow the lawn and/or maintain a lawnmower, weed eater, hedger, edger, and/or chain saw? Is a tractor, hay baler, trailer, and/or other heavy machinery required to maintain your property? The cost of any of these items and their fuel and oil should be included in this category along with anything else required, including plants, seeds, chemicals/sprays, gates, gravel, et cetera. If you have a tractor loan, include it here, unless you want to set up a “ranch” or “farm” expense category because it is a significant separate category from the house yard.
- Vacations. How much have you spent in the past year on trips, including weekend getaways? Do you have plans to do something extraordinary or different in the future? Consider the fluctuations in gas prices and airline tickets when projecting costs going forward.
- Gifts. As stated earlier in the introduction, think about the holidays during which you give gifts and the list of people to whom you give gifts. Estimate the amount you give to each person throughout the year and then divide by 12 to arrive at a monthly expense. Most of it may be utilized in the months of November and December (the biggest shopping time of the year) or at some other time of year, but you will need to set money aside each money prior to these months in order to have enough when it comes time to do the shopping, so we need a monthly amount to withhold from our monthly income for gift-giving. Also, remember that you will likely have a few surprise gifts or invitations extended beyond what you know about now, so add a little extra. Try to be realistic with this budget, based on what you have done in the past and then add just a little for the “unknowns” or “forgotten gifts”. If you have used your credit cards, you may be able to go back through your receipts or history and get a good idea, particularly around the times of year that you celebrate holidays/birthdays.
- Reloading, ammo, gun maintenance, and cleaning supplies.
- Religious education/conferences.
- Larder. Include in this what you have bought beyond “groceries” for your larder. If you have purchased buckets of freeze-dried foods that you don’t normally use in your food supply, the expense of these buckets would certainly fit in here. Anything that is above and beyond what you utilize during the month and that can be stored long term should go here. It may be difficult to tell which category some things should go into (groceries or larder), but don’t worry too much about that. The main thing is to get every expense into a reasonable category. Just make the best judgment you can. If you want to combine these two, as I do, go right ahead. Going forward, it just may help if you are only beginning to build your larder and getting started with prepping to separate an amount toward buying some things that you don’t use normally, like freeze-dried items, to help you get disciplined in doing so. In spite of some who ridicule the idea, our family does eat what we store and store what we eat. We eat some wild things also, including some early spring-time dandelions in our salads and so forth, and we always eat whole grains so that our bodies will be well adjusted to the stored grains. We’ve found we prefer their taste and the health benefits, so it is now a way of life for the Latimer family, and the “larder” is simply our larger pantry with an intermediate and small pantry, too. You have to figure out what works for your family and how you make purchases. Look at receipts and begin by looking at what you are buying now.
- Jewelry/precious metals.
- (others categories specific to you and your family.)
Take a Good Look at Your Budget
Now that you have everything written down, take a good look at where your money is currently going. Is there money left over every month, or are you going into debt each month? Ask yourself, “Am I spending my (our) hard-earned income in ways that support my (our) life goals?” Is this how God has directed you to utilize the resources He has enabled you to have? If not, you need to think about making some changes, possibly some significant ones.
Does your family know and love our Lord and Savior? Is your family emotionally close to one another and obedient to God’s Word, such that you all have a common perspective on life and priorities in this world? Do you have a secure homestead that is away from the city? Do you have multiple sources of clean water, food to sustain your family for weeks and months and possibly years in a TEOTWAWKI event, a means for cooking without utility services, power when the grid goes down, communications, defense, a bug out location, bug out gear, medical supplies/training for SHTF/TEOTWAWKI, and is your family trained and prepared spiritually, physically, and emotionally for what may come? Do you have skills that can see you through and be valuable to others in a long-term SHTF event or TEOTWAWKI time? If you can’t say “yes” to these, then maybe you ought to consider investing in achieving some or all of these goals. There are many ideas in SurvivalBlog articles about how to achieve the objectives above, including your relationship with God. Our money reflects our priorities or a lack of directed priorities. Take a good look at your own and pray about what needs to change. There is always room for improvement. I am working on some right now myself. What do you need to do differently or better?
It may seem scary and risky to make significant changes. The greatest returns on investment usually, though not always, come from things that seem to have the highest risk (or require the greatest patience). Now I do not believe in taking risk for the sake of the thrill of risk. Oh, no! However, when there is a strong reason to do something that I believe in but requires me to leave my comfort zone, I have learned that being risk-averse only keeps me from reaching my goal and ends up causing me harm. Staying in the same rut is often detrimental, though it is comfortable. If I am willing to make changes and adjust my life to accomplish something great that the Lord is calling me to do, there is reward. You, too, can make changes that will bring about great reward! In the short term there will likely be some pain and discomfort. Change seems to do this. We have to let go of some things that we have held onto for awhile. Even if they were not healthy for us, we grow comfortable with them. However, when we see that something better can be accomplished, we need to move to it. That is the case with your budget.
If you need to cut way back on your entertainment in order to increase you larder, it will be painful in the beginning. However, you’ll find comfort in seeing the larder grow. You’ll find other avenues for inexpensive entertainment, too. You might even find something that you enjoy far better that you would never have explored had you no had to search for it. I certainly had no idea how much I would enjoy gardening and herbalism, until I realized the necessity of them and began pursuing them, at first to supplement our income and improve our health. Now, they are a pleasure, though there is still a fair amount that I wish someone else would do for me. (Weeding is not high on my list of favorite past times!) Still, there is always the opportunity to listen to music or instruction while weeding to make the time pass more quickly.) What joy there is in seeing the produce come in off our garden and to taste the incomparable flavor of our homegrown, organic vegetables and herbs, given to us by the hand of God through His providential love, care, and provision and our obedience to guard His garden. We get more resourceful out of necessity, and this is a good thing as we prepare for SHTF situations.
My mother was an accountant and gave me some very good guidelines when I left home that I agree with. She and Daddy were married during the Great Depression, and she graduated in the 1930s at the top of her college class with a degree in accounting, so I think she had a good handle on finances. Though some things have changed since then, most haven’t. Her guidelines below still apply:
- Don’t spend more than 30% of your income on your home mortgage/escrow payment and preferably only 25%, then pay extra each month as you are able to get that mortgage clear as soon as possible. Be sure not to take on a balloon mortgage or one that penalizes you for early pay off. With the banks so volatile these day and eager to foreclose, a person really needs to do their best to get their property paid for as soon as they can. However, other debts with higher interest rates may need to be handled first, if you have those.
- Use credit cards for travel and emergencies only and always pay off the balance each and every month. Never leave a balance that requires any interest be paid!
- Put cash aside in savings in order to pay for a few emergencies, and keep some cash at the house to cover weekends and holidays when banks are closed. While Mom’s recommendation to keep cash in the house isn’t as necessary for weekend and holiday access with debit/bank cards these days, the risk of bank closures, credit card cancellations, hackers, and possible bank account confiscation by the government are all real risks to relying on the bank to hold all of your money. It is still good guidance to keep cash or coin outside of the bank in a secure location that is accessible to you whenever you might need it.
- Cut corners where you can, but buy quality where it matters. This was one guideline that has been profound as we got our financial and life priorities realigned. “Keeping up with the Joneses’” is fruitless. Appearances to look like you have more than you do is counterproductive, especially in SHTF situations. We do well to do the reverse. Mother made a lot of things in our home, sewed many of my clothes, repaired clothes, gardened, collected those old S&H Green stamps at the grocery store to buy her small kitchen appliances, and cooked many things from scratch. Daddy hunted, processed meat, did woodworking, and was “Mr. Fix-it” around the house as he was capable, and they both readily bartered services and products when possible. Still, we took vacations to foreign countries, had reliable vehicles, lived in a nice house, and generously helped our church, foreign missionaries, and many individuals in need. They also had a nice retirement built up and had bought farm land on which extended family were sharecroppers. Dad, being in the healthcare field, believed in buying quality shoes, but they didn’t care about brand named jeans or designer labels. Healthy, durable, functional, wholesome attributes at a good value were the criteria that mattered. They’d save up for what they needed until they could pay cash. I recall the car salesman’s eyes when they brought cash to buy a car Daddy had negotiated. Apparently, few bought that way. It was the norm with my parents. It has become the norm for Hugh and me, now, too! It is strange how things change and yet don’t, isn’t it? There is so much to learn from those who went through the Depression. I feel fortunate to have been raised by people who learned those lessons. I only regret that for a period of my life I discounted those ways, thinking we were in more “advanced times”. It would have gone better for me to have listened and applied all of their lessons earlier. The age of “gotta have it now,” indebtedness, and thinking “I deserve to have ‘it’” is not advancement. I recall when Hugh and I were shopping for my recent vehicle at a local dealership and waiting for the car salesman to return from taking our offer to his manager that we listened to a woman bawling. She was hysterical over being turned down for credit on the car that she just had to have. I honestly don’t recall seeing anyone who had just received news of a loved one’s death bawling any harder (and few as hard as) this woman. The salesman offered to check on a lesser expensive car, but she just had to have that one. That car was the only one for her, and it seemed to be the end of her world that she couldn’t afford it. Even if she had been sold that car, it would have probably been in the junk yard in less than ten years. How sad!
- Above all, pray about purchases, especially large ones, and don’t make emotional, quick decisions to buy anything without talking with the Lord and your spouse, if you have one. When married, pray and discuss purchases together. She suggested setting a limit of how much one spouse should be able to spend without consulting the other and then sticking to that limit. Hugh and I have changed this amount as our financial situation and goals fluctuated, but for most of our married years we have rarely spent more than $100 without consulting the other one first. Many times the other one has served as a good consultant to ask the questions that guided the one considering the purchase away from making a mistake and toward making a much better investment elsewhere. Two heads are better than one, and the one that isn’t in front of the salesman or the shiny, new toy can sometimes be more clear headed to think through the considerations and the other items higher on the family’s “need” list competing for the family’s resources, too. I have so many times been grateful for Hugh’s wise counsel on purchases I was considering! I think he would say the same thing about my advice. We have “family” goals, yet we also desire for the other one to have hobbies and be satisfied, too, so there is no selfishness involved. We aren’t trying to deny one another but to help each other make good choices for the benefit of the family and our common goals. Sometimes, I have advised Hugh to upgrade his purchase consideration, which usually shocks salesmen of tools and guns, as apparently most wives are not generous, but I like Hugh to have the tools necessary to get the job done right! Working together to set family goals and taking actions that help the family reach those goals is key, but we each also need to have a little flexible spending money, too, to pursue our individual interests and spontaneous desires or opportunities. That limited amount should be determined in advance and respected. Mom and Dad did a good job of this. They had a separate compartment in their wallets for their “personal” money, and I sometimes, if not often, saw them take their personal spending money and use it for others. Dad bought a sandwich for a “ho bo”, and Mom bought some perfume for a lady in the nursing home. Sometimes, they would buy me some candy with it or we’d all go out for a banana split or malted shake, which of course I didn’t mind at all. It was all the Lord’s anyway, and they considered themselves simply good stewards who got the benefit of enjoying it and enjoying sharing it. Hugh and I have to agree that there is a great pleasure in caring for others and sharing what we have with those who appreciate it and have true needs.
In the next article, I will address goals and specific cost-cutting ideas for various categories that we have implemented and that might help you to cut your costs and achieve your budget goals. Thanks for hanging around for this long series articles. I truly hope it helps.