What finally opened my eyes to the value of spending wisely was this decision: should I stay home with my baby after my maternity leave? Or should I go back to work?
Ultimately, I chose neither and both. With a lot of reading and spreadsheeting and planning and fretting and negotiating I was able to craft a plan that would suit my need to be a hands-on mother and a wage earner. I wanted to work part-time.
With more expenses than before baby and less working hours to pay for the expenses, some fancy financial footwork would be required. Here's the steps I went through:
1. Set the goal.My goal: working part-time, specifically half-time.
2. Track spending.I started this by tracking our spending for a month, then two, then three. (I have actually never stopped. The information gleaned from recording our spending has been incredibly valuable. I will go on and on about this in the future.)
3. Track money coming in.It's really less difficult than it sounds. The credit side of any bank statement usually has much fewer lines than the debit - even now that we spend smarter.
4. Are we living with our means?Subtract #2 from #3. At first we were spending more than we were bringing in. This had to change.
5. Set a budget.Create a spending plan. Make #4 as close to $0 as you can.
6. Do everything within your power to stick to the spending plan.Always keep your goal in mind.
I was also rewarded for my obsessive online research with a great website find. Today's Parent magazine has a great calculator called, "Can You Afford to Stay At Home". No matter how I put the numbers into this calculator, we needed to learn to spend much less if we were going to live the lifestyle we wanted.
The goal was achieved - I went back to work half-time AND we started paying down our debts. With some planning and care I was able to answer my question, "Should I Stay Home or Should I Go?" with a resounding, "YES!".