Recently, Chris and I kicked off a day date in our favorite way: with a coffee + budgeting session. It was a particularly fun one because we were incorporating Chris's new salary as a full professor and projecting out a few years to include some possible big goals. After diving into our budget I wanted to share a few places where we are trying to manage spending, and a few budgeting wins lately.

If you'd like to see more about our budget, last year I wrote an overview post about how we manage our finances and a post about our monthly budget. Currently we use Monarch to track our budget and spending and we've been really happy with the program.

Budget challenges

Miscellaneous spending. As I wrote about in my budget post last year, and what so many of you agreed with, "miscellaneous" spending can be a very unwieldy category. Under the umbrella of Miscellaneous spending we have many sub-categories such as Kids' Activities, Gifts, Haircuts, Family Fun, Day Dates, Allowances for Chris and myself, etc. So this category represents a lot and there are many things that we need to spend on in this category each month. However, we can also exercise a lot of discretion and that's where we want to bring some attention.

Something that helps us reign in spending in this category is regular budget meetings, which we are going to try to get back to having weekly. Even just a quick touch base. Another thing I try to do is to keep a list of things I feel like we need to buy (usually shoes or a clothing item for the kids, or something for the house) and then run that by Chris. He's great about pointing out a way we can get by without something or he's always willing to go browse a thrift store for kids' clothing (something I don't love doing).

Sticking to our allowance limits. If I had to generalize about where Chris and I each tend to over-spend, I would say that Chris spends on wood for woodworking projects and for experiences like concerts while I spend on home decor and projects. The challenge is that this over-spending can always seem justified because we are both supportive of how much these kinds of things brings the other one joy. But we're both feeling really motivated to stick to our budgets lately.

So going forward we've both committed to sticking to our budgeted allowance of $150/month. Within that budget we can spend however we want to, but when it's gone it's gone and we can't try to justify our way to over-spending.

Travel. We really value traveling to see friends, family. and new places, and giving our kids the experience of travel as well. This year has been a particularly busy year for travel and between Chris and myself we've taken six trips already this year with two more family trips still on the calendar. We regret none of them but we are in the mindset for a less travel-heavy year in 2025.

Looking ahead to the rest of 2024 and 2025 we talked about keeping family travel fairly minimal and inexpensive, such as in-state weekend trips, camping, or if we arrange a reciprocal Home Exchange stay again. Something that helps me travel is having a Southwest credit card with accumulates points for airfare. I can usually get one round-trip flight per year for free that way.

Managing our energy bill. We had solar panels installed on our house in 2018 and produce enough energy to offset between 50-60% of our energy use. However, the rate plan that our utility company forces solar customers to use has a fee structure that makes it much harder to save money even with solar panels. Don't get me started! Anyway, our energy bill has been creeping up over the past few years and we decided to really focus on using less energy to lower that bill.

The things we are doing to help here are raising the temperature of our house during the day to 78º, although we still sleep with the temperature at 70º at night. I wake up hot and have a very hard time sleeping if the temp is even at 71º and this is a place I'm not ready to compromise. We also have "peak" energy hours so we are committing to being mindful not to run the dryer or dishwasher during those times (2–8 p.m. during the summer, and during the winter 5–9 a.m. and 5–9 p.m.). Also during peak hours if we are going to use the oven or stove we should turn the air conditioner up to 80º to offset the extra energy usage. Hopefully this challenge will soon turn into a budgeting win as we save on our monthly bill.

Budgeting wins

We're making more money! Always an exciting win, our income is going up with the 10% raise Chris got when getting promoted to full professor.

Contributing more to the kids' 529 accounts. We increased our monthly contributions $50 to to $150/kid.

We created separate budgets for the summer and the academic year. A simple but impactful budgeting win. We realized that our budget looks different enough during the summer that having separate budgets would be helpful. Our budget spreadsheet (in Google Sheets) is where we can see all our budget expenses and savings line items at a glance and tweak things as needed.

During the summer our expenses change such as no paying for school lunches, preschool payments are replaced by payments for camps, and possibly more "family fun" spending. Plus during the summer months Chris's paychecks increase a little bit for some administrative reason that I don't quite understand.  So in our budgeting spreadsheet we started creating an academic year budget and a summer budget for each year and we like it!

We are tracking well in Monarch and really liking it. At the beginning of the year I felt a bit daunted by moving over to Monarch and getting set up. But we've fully made the transition, customized all the categories to our liking, and are staying on top of tracking.

We are glimpsing a turn out of "the messy middle." An episode of the Money Guy podcast (which I've been enjoying lately) described the concept of the messy middle and I relate so much. The messy middle is the phase of life when you have young kids, you might need a bigger car or house, and there is a general sense of life feeling very full and money practically flying out the door. I know what that feels like! I really liked hearing about the messy middle because it normalized the experience, and the episode helps remind you of the good financial practices that you can still keep in place even when you are feeling squeezed financially.

What is exciting is that we think we might be glimpsing a turn out of the messy middle within the next couple of years. The big contributing factors are: Chris's recent raise, the end of daycare/preschool payments next May, and the end of our car payments in January 2026. All together these changes will mean that our monthly income will increase by $2,400 (!!).

During the next couple of years there's also the very real possibility that I will continue to earn more money, and perhaps to the point where my income can contribute to our finances in a meaningful way. It's exciting to think about the things that we can save towards with that increase in our income, such as increasing our college savings contributions, saving towards travel, and house projects.

I'd love to know what budgeting challenges and wins you've noticed lately.