To avoid a repeat of our year of disaster, Jason and I have been living off one income while using the second income to pay for wants, unexpected needs, and savings. We've found this system has prevented us from ever being unable to provide ourselves with not just the basic necessities but luxuries, too.
The great Miss Suze Orman pointed out that if you can't live off half your income now, what would you do if one of you lost your job? Well, you'd have to! It's better to just live below your means now in case your means ever decreases. And if you're a single income household, you should try to live off half of what you make. If you're laid off (and you should probably pray for that instead of being outright fired), your unemployment will only be a portion of your regular paycheck. It's better to adjust your lifestyle now so you're ready for an income change later.
We've been living like this since 2007, and it has paid off for us big time. Since then, there has literally been no month or week where both of us haven't been earning money. This leads us to believe that living off income and not feeling like both of us have to have a job, we perform better at work because we're there because we want to be. Our lives are more stress free, we have more money than we ever had in the past, and we're giving more.
I promised last week in Part 1 that this week I would share our budget with all of you. But first, I thought we should take a look at what some experts say the average is for an American household budget:
Alcoholic beverages: 1%
Household operations: 15%
Housekeeping supplies: 5.9%
Apparel and services: 2.7%
Personal care products and services: 1%
Smoking products: 0.7%
Now, let's take a look what you should be spending, percentage wise, on each line item:
Alcoholic beverages: 0%
Household operations: 5%
Housekeeping supplies: 2%
Apparel and services: 5%
Personal care products and services: 4%
Smoking products: 0%
Charitable gifts: 10%
Charitable gifts and savings are definitely things the average American should be spending money on, but it's scary to note that in the average American family's expenses, these items are missing.
Next week, I promise we'll take a look at my family's budget. In lieu of sharing the percentages, however, we decided to share the expenses in order of how much we spend to preserve our privacy regarding finances. We are hopeful that in sharing our own expenses and explaining why we have felt called to spend more or less on certain items, we can influence our dear readers to re-evaluate their own expenses - whether that means spending less money on transportation or more money on vacations! We'll also share where our own line items fit in with the line items above - are we spending more or less?
I Double Dog Dare You: Until next week, I challenge each of you to go one day without spending any money - at the grocery store, at the gas pump, at a restaurant, online, anywhere. Jason and I will do this tomorrow, and we'll let you know the results next week!