15 August 2007

New Financial Plan

Let us veer away from the recently negative, sad, and infuriating chain of events and turn to a decent bit of communication that happened between my husband and I in the last few days.

This conversation occurred as we were driving home from Minnesota this last Monday. It was about finances. Brent still makes a corporate salary, I have my Masters and make a respectable salary (for a teacher), and we live in SE Iowa, where the cost of living is much lower. Needless to say, we live very comfortably, and are able to enjoy just about anything we like...which leads to a smidgen of reckless spending. We're not thousands in debt or anything like that, but we make several trips to Walmart during the week or we make frequent ATM cash withdrawals. Now, I haven't had to hock my wedding ring, but it's a concern.

So, we came up with a plan on Monday's drive. We had nothing else to do anyway!

The Nelsons' Solid Financial Plan

1. An ATM cash withdrawal of $100 will be made once a week. H gets $40, B gets $40, and $20 goes to the "money drawer."

2. All purchases are made in cash; the only exceptions are groceries, gas, and bills - these will be put on credit card (all others are cash).

3. Credit card usage should be limited as much as possible to the weekends.

4. Nelson family is allowed one credit-card-restaurant trip per week. Any other dining out is paid in cash.

5. Money is not taken from "money drawer" unless the other person is consulted.

6. Money from "money drawer" is used only when $40 allowance is gone, and then only for necessary household purchases.

7. Online purchases must come from weekly allowances, which is then put into a separate "Online Purchase" envelope. This money is then recycled into next week's allowance (under $100) or deposited in bank (over $100).

That's it. We've done detailed budgets before and it became a bookkeeping nightmare. This way, we only have a certain amount of money, but how we spend it is irrelevant. It hopefully will also make us think about our purchases and think ahead to things we REALLY want or need.

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