Two things which are actually necessities, but which I don’t budget as such, are groceries and clothing. You see, it’s easier to justify overspending in these categories if we consider them in the same class as the mortgage, but these expenses are both functions of our values.
A little story? Delaney and I were at the mall one day. We’d seen a perfect blouse there a few months ago for an outrageous $70, and as we walked by the shop, I said, “Hey, I bet that shirt is on clearance now. Let’s see if they have any left.” She found one in her size for $22, which is still quite a lot more than we usually pay for clothes, but it was a rare treat and she loves the top. Also, she was pretty impressed that I knew it’d be clearanced out.
As we were driving home, she said, “Can you imagine how much people’s wardrobes are worth if they only shop at the mall?”
“They’re only worth whatever you’d pay for them at the thrift store,” I said. In a few months, or a year, whenever those people get tired of their clothes, that’s where they’ll end up, and people like us will get their nice, hardly used, expensive clothing for just a couple of bucks! She was quite tickled by that thought, but it’s true. As Davey says, just try to sell your stuff if you want to know how much it’s worth.
We all have to wear clothes, but we don’t have to spend a fortune on them. Likewise, we all have to eat, but there are ways to economize to keep the food budget at manageable levels.
We’ve been blessed, from time to time, to have an acquaintance or two with a child the next size up from one of ours, which has made our clothing expenses for that child non-existent. Other times, we keep our eyes open on our regular second-hand shop rounds. Boys clothes are particularly hard to find in decent condition, but Old Navy, Target, and Children’s Place often have good deals. I don’t buy clothing for our two oldest girls anymore, unless it’s a gift, so for eight people, plus baby on the way, I budget $200 a month. It’s amazing how often they need new socks and underpants.
As for groceries, I figure on $100 per person per month. You might be able to get away with less if you have quite small children, but this figure includes ordinary household needs you’d buy at the grocery, like detergent, toilet paper, and light bulbs, so it isn’t strictly for food. We spend about $800 per month at the store for eleven people, and the rest goes to feed and butchering costs for the livestock. Grocery prices don’t differ drastically across the county, in my experience, and for that $800, we eat a combination of conventional and organic foods, both produced by our own labor and purchased at various establishments, and we buy almost no convenience foods.
Now, this is important right here: You don’t have any more needs. Everything else from here on out is entirely discretionary. That means you have to have the money to fund the category, or, being the responsible adults that we are, we do without.
My remaining categories include homeschool books and materials, magazine subscriptions for the children, tithing and charitable giving, birthday and Christmas gifts, allowances, household expenses, beer and wine, meals out, and farm expenses.
I’d rather buy books than watch television, and if I’m not home, I don’t want to talk to you, so I don’t have cable or cell phone categories, but this is where those go.*
You also want to be planning to save some of your money, especially if your savings account is currently underfunded. Savings goals will differ, depending on your situation. Do you need to get through a slow work period? Might your company be laying employees off? How much is the deductible on your insurance policies?
And, of course, debt repayment trumps nearly all of your discretionary categories.
*Most cable/satellite providers and cell phone companies charge you a disconnect fee for breaking your contract with them, equivalent to two or three months of service. This is a psychological trick to make sure you keep sending them your money each month. We’re naturally adverse to giving up money in exchange for nothing, and they know that. It’s not for nothing, though; it’s for taking control of your finances and your life, so don’t be afraid of that fee. If you want out from under a smart phone contract or a Direct TV bill, this is a perfectly worthwhile expenditure!
How much is your entertainment worth to you? Or to them?