On Achieving Financial Greatness (Baby Steps)

I hope you don't mind if I share something that has made me really happy lately. I promise I'm not bragging - we've just been working on some things that really make me feel awesome, and I want to share.

For the past couple of months, Eric has been doing a lot of video work for a guy named Brian Ford, who does financial training seminars called "The 8 Pillars of Financial Greatness." After seeing a couple of them, Eric came home and told me that (among other things) we needed to cut up all (2) of our credit cards. I was willing to see what he was talking about, so we started watching the seminars. And I LOVED them. (Side note: if you bank with Mountain America Credit Union, they will have these seminars available online for their customers for free. Neat, huh?)

I feel like in general, we're pretty good with money. But for the past year or so, we've felt like we were just treading water - barely breaking even at the end of each month. Eric is essentially self-employed, we're self-insured, and we're trying to pay of student loans and medical bills, so it's sometimes difficult to know what to do from a budget standpoint, because the paychecks just vary quite a bit from month to month. However, we learned that there are definitely some things we can do to help us feel more in control, and we have been loving the last couple of months. Here are some of the things we've done. 

• Established a Financial Confidence Account. That's a fancy way of saying we now have an emergency fund, so if our car breaks down or someone breaks an arm or we accidentally neglect to pay a medical bill for 4 months, we can pay for it and sail on our merry way without ruining our financial plans. Our tax return helped us quickly reach the first goal of $1000, and now we'll add a little each month until we have 3 months' living expenses. 
• Created a budget based on our values. We made a list of the things we valued most right now, and then asked ourselves whether our financial plans are in line with the things that are important to us. Sure, there are lots of things we want right now. I'd like a 4-door car and a new computer. But when we wrote down our values, I realized that what I want more than that is for CB to eventually get some siblings, and our insurance is such that we should start saving for that right away or we'll never be able to afford it. (Our insurance covers complications, but we'll basically pay the full cost of a normal birth unless something changes between now and whenever we have another baby.) Instead of using our tax return on a new computer or a vacation as we'd originally discussed, we put a big chunk of it in an account labeled "future baby," and we'll add to it each month. We also started an account for travel (so we can visit E's family in Texas), and soon we'd like to start a future home account.
• Zeroed out our credit cards and switched to a cash-based system wherever we could. Credit cards are fine when you pay them off at the end of each month, and we pretty much always do, but we still get to the end of the month wondering how we spent so much money. Let me tell you, when you go to the grocery store with your grocery money in cash, you think twice about those extras that get thrown in the cart here and there. We came in $10 under budget this week! (I guess we could have gotten those sausages after all.)
• Created a discretionary fund for each of us. We take a certain (small) amount of money out for each of us at the beginning of the month that we can spend on whatever we want without feeling guilty for spending the family money and without feeling like we need to consult with each other about our purchases. This keeps us from feeling strangled by our budgets, but also helps us think carefully about what we personally want to spend that money on. If I want new jeans, I'll probably need skip a few extras somewhere else.
• Started having weekly planning, budgeting, and menu planning meetings. Planning out our weeks and our menus together before we go grocery shopping means that 1) we don't buy things that we don't need or that will go bad before we can use them, and 2) we know what we're going to make, so we don't decide to go and pick up Chinese take-out at 7 pm. Not only are we spending less money, but we're eating healthier and our lives are more organized.
• Automated as much of our budget as possible. Our bills and our savings come out automatically so we aren't tempted to put them off until we don't have any money left for them. 

We're only about three pillars in, but let me tell you - I am loving it. We feel like we're making progress on our goals for the first time in a long time. We feel in control of our money, and we feel less frustrated when we have to pay our bills each month.