My wife and I have a goal to keep our expenses flat for as long as possible. We realize that some day (like when college comes) we will have to stretch our plans to cover costs outside the normal list. But for now, we’re trying to keep a flat budget for the next several years. Allow me to explain:
Let’s pretend I net $1000 per month and that we spend $300 on housing, $400 on expenses, and the other $300 on tithing, savings, and discretionary spending. We’re pretty much maxed out and I’m okay with that. Now, let’s say I get promoted at work and net $2000. It’s our goal to continue to “live” on $1000 per month and bank the other $1000. We’d like to get to the point where we can pay for cars with cash, pay off our mortgage early, have an emergency savings fund, and maybe even invest in the future (we have 5 kids- we’ll need all the help we can get).
So here’s the question: If a promotion comes and I have the increase in net pay, should housing count in the flat budget? Should we be able to purchase a home that increases our housing costs to $600 (double)? We’d still be able to pack away $700 each month in savings ($1000 - $300 for the increased housing cost). That seems to be in line with our goal. But then we run the risk of being tempted to spend $1300 on housing, thus swallowing all of the increase. The budget stayed flat, it was the housing piece that went crazy. I’m not worried about going stupid- we are frugal people, so we’ll only allow ourselves to be moderate in our housing budget.
What I’m talking about here is the concept. Should YOU include housing in your budget? If you want a better house, do you feel like you have to cut costs somewhere else? Or do you let it encroach on your savings? What works for you and your family?
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