Budgeting - We'll Give It A Try

on Thursday, April 30, 2009

As I wrote about earlier this month another blogger, Gather Little By Little, issued a challenge and the G Family accepted! We have never actually lived on a budget. Yes, I have suggested spending limits in Microsoft Money but we've never actually stuck to those limits. This will be our first attempt at having an actual budget. I am hoping that this challenge is just another stepping stone in the right financial direction. I want to say thank you for issuing this challenge and I can't wait to blog about it through the month of May and beyond.


Baby: $100
Gasoline: $115
Cell Phone: $55
Reoccurring Bills: $325
Miscellaneous: $50
Student Loan: $190
S's Credit Card: $100

O: $50
Travel: $50
E-Fund: $215
Snowflake: anything left over from the other categories


Final Steps

Today is the last day of April and I'm winding up my Steps from Financial Literacy Month.

Step 27 is about the cost of credit. We thankfully are down to on S's credit card and our student loans. After my experience with my first and second runs with a decent amount of credit card debt I doubt we'll be doing that again. Once S's credit card is paid off we'll only use the cards if we can pay them off each month.

Step 28 talks about assembling a team for financial planning. I will admit we are in need of a lawyer. We need wills and health care proxy forms. We will be getting on top of this during the summer months.

Step 29 and Step 30 deal with the benefits of having a financial plan and feelings about having one. I can only speak for myself but I will say that I feel much better when I don't have credit card debt hanging over my head. I also feel better when we have a budget in place. I seriously need to do an overhaul of our budget tonight because our 30 Day Budget Challenge starts tomorrow and I was paid today. How fitting! After working through this plan I feel like I have a better handle on some areas and there are some areas that S and I need to work on. We will continue to work on our finances as best we can.

I am really glad I was able to take part in this.


Step 23

on Sunday, April 26, 2009

Step 23 has to do with grocery shopping. I am not the main grocery shopper in our house. This does not really apply to me. I do buy a few things and when I do I use coupons and shop deals. I do plan on using menu planning and shopping deals along with my coupons when we move out as well.

Step 24 deals with sharing a tip. I have been trying to share tips on here with things that work for us. I hope this counts as working on this step.

Step 25 deals with adjusting spending habits. I am going to create an all new budget for the challenge in the previous post that starts on Friday.

Step 26 deals with insurance check-ups. S and I really need to have a long discussion about this once he arrives home. This step is not completed and will not be completed for at least another month. I am going to bookmark it and keep it safe for a little while longer.


Accepting another Challenge

on Thursday, April 23, 2009

Gather Little By Little has issued a challenge to anyone willing to accept. He is currently challenging all of us bloggers out in bloggerspace to live on a budget for 30 days. I plan on implementing a new budget as of May 1st anyway so this is a timely challenge that I am glad to accept. I will be working on the budget more this weekend and definately posting it either before or on next Friday.


Step 22

on Wednesday, April 22, 2009

Today it is time for step 22. Step 22 is about reducing spending. This is probably one of the areas I need the most work in. We would have a lot more money ok not really a lot more money but at least some more money if I didn't spend frivolously.

I bring my lunch to work almost every day but still tend to stop to pick something else up at least once a week. This could stop or at least be cut down to once a month.

In the past I was saving all of the change I had after breaking a dollar. I am now spending that when I run out of dollars. I need to go back to saving the change.

The rest of the ideas on the list do not really apply to me. I wash all of my clothing and have a drying rack that I use for heavy items such as jeans and sweaters. I end up washing three loads but only having to dry one.

All of our extra money that comes in goes into our snowflake pile and transferred to savings at the end of the month. I suppose we could transfer it every time we found some money but that would prove to be difficult and most likely stop after a month. For instance, I have $30 in the budget once a week for gas but usually only need $24. I'd have to make a transfer at least every week for $6 which seems a bit unnecessary when I could just make a transfer once a month for $24. Wow, I just realized I am over budgeting this category by a whole tank of gas. I just might need to reallocate some of those funds. Then again, gas is going back up in our area so my best bet is to leave it alone, I think.


Steps 17, 18, 19, 20 and 21

on Tuesday, April 21, 2009

I'm trying hard to get caught up with these steps to finish out Financial Literacy Month on time. I have just had so many things on my mind lately with O's minor health scare, trying to get things organized for S before he comes home and a lot going on at work.

Ok, back to business. Step 17 deals with savings. The first bullet says make it automatic. I have a small amount being automatically saved each month. I really should change this but will do that once S and I reevaluate our budget when he starts working. The next bullet says to turn your hobbies into cash. We I do know how to knit but I haven't knit anything worthy of being sold. I highly doubt I'll end up doing this bullet. The third bullet says downsize. While we can't really downsize we did decided this weekend to hold off on getting a new car for a while longer. My car has some major issues going on but we're going to try to just run the car down and then look into getting a different one. The final bullet says use gifts and found money wisely. We are saving all of our wedding presents for our trip to Germany. I received two target gift cards today through a diaper deal they have this week. I am going to use those towards O's birthday presents. Any other found money will be snowflaked into our emergency fund.

Step 18 deals with tracking daily expenses. I am already doing this by logging everything into our budgeting program.

Step 19 deals with documenting fixed expenses. We have very few fixed expenses. They are the cell phone and student loans. Everything else is pretty variable. I do put $100 for baby expenses in the budget but usually it comes in somewhere around $90. This is pretty variable as are most of our other categories at this point.

Step 20 deals with reoccuring but not monthly expenses. I have a seperate account that I stick money in each month for these bills. It is call my reocurring bills account. It pays for car insurance, clothing, oil changes, car tires, among other things. I added all of these expenses up and then divided them by 12 and then put that amount into the reoccuring bills account each month. I take them out at the start of the money that they will be used in by putting them into my regular checking account.

Step 21 deals with documenting spending. I have been tracking my expenses and spending in Microsoft Money since before I met S. I will continue to do this just adding his information as well. This steps pretty much explains how to create a budget. I will be posting my budget on or around May 1st. It will be as up to date and workable as possible. We may need to make some changes a long the way but we'll see what happens when the time comes.

I am now all caught up with these steps until the next time I fall behind.


Our Little O

on Monday, April 20, 2009

Our daughter is O. She is just over 10 months old. She was recently diagnosed with a heart murmur. While this might sound like a common childhood ailment we were very concerned. As a baby I had to under go open heart surgery because I had a large hole in my heart that would not close on its own and my doctor originally diagnosed it as a murmur. Today, I had her second opinion appointment. The second doctor too believes it is a just childhold murmur that she will out grow. Hopefully, this is the case. The doctor said that she should out grow it by the time she is two and if not then her primary care doctor will most likely order more testing.

We are praying that it will go away on its own. I do not want my baby to have to go through what I had to go through. We have been pretty worried about this for the past two weeks or so. In the end we know things will work out the way they are supposed to but this is more of reason to have that emergency fund built up. Today, we went to an out of network doctor for the second opinion. I'm sure we will have to pay more than a regular co-pay for this appointment. While I knew it was coming since early on in the month and was able to squeeze enough to hopefully cover the bill it would be helpful to have the e-fund funded just incase we have a medical issue that will require more money. For now, we are hoping for the best but preparing for the worst.


Steps 13, 14, 15 and 16

Seems I have fallen really far behind on my steps. I am going to do my best this week to catch up.

Step 13 deals with debt. As we all know I am working hard on pay down our debt. We have all of our debts listed on the side bar. The step explains the two snow ball methods. The first one being start with the smallest balances and the second starting with the highest interest rates. I can see both of them having advantages and disadvantages. We are tackling my credit card first (which is paid off now), then medical bills (awaiting an updated bill), and then finally his credit card. As soon as we get the updated bill we will be paying the medical bill in full this month. After that we're on to his credit card bill. We will still have our student loans but are not in a rush to pay those off just yet. Once we have all of our other debts paid off we'll have a lengthly discussion on what to do with the student loans. I have a feeling we'll just pay them on time each month until they are paid off.

Step 14 deals with emergency funds. We are working on building ours up. I am trying to adjust our budget so that we are able to put at least $300 per month into our emergency fund to build it up. As I said above we are working on paying off debt but I feel we need to build our emergency fund first. If we were to have an emergency right now we'd need to use our credit cards which would just create more debt. Increasing this savings account is more important to me at this time than paying down S's credit card.

Step 15 deals with retirement accounts. We do not have any yet. I just started working at my company and they require you to be here at least a year before you can open anything with them. I haven't opened an IRA yet but will do so this year. I don't think I'll be able to fully fund it this year but will try my hardest. I will also find out more about my company's 403b. I'm not even sure who to ask about that. I will find that out first and then get more information about retirement accounts. S is currently not working and does not have any income so he does not have any retirement accounts either. Our goal for this is to both have at least once account by the time we are 25.

Step 16 deals with commitment. I have posted my goals on the side bar of my blog. I sign in almost every day to update the 101 in 1001. I see these goals often and keep myself motivated that way.

Ok, that's enough work on this for today. I have some other things I want to start covering here. I want to cover my 101 in 1001. I also want to write more posts about O. I don't think I covered her enough here.


Dining Out

on Wednesday, April 15, 2009

I have been eating out entirely too much since the wedding. I do not have an exactly number because this is money from my travel expenses from work. I do not include this money in our budget. This is my personal fun money and when it's gone, I don't have any more fun money for the rest of the month. It was also Easter this past weekend and my parents almost always give us lottery tickets. This time I won $14. As sad as it sounds, this went to dining out too.

If I figure each trip costs at least $5 and I know I've gone at least 10 times in the last month it rounds out to be about $50. Starting right now, I am going to stop eating out as frequently. I am going to limit it to twice a month and I've hit that number for April already. In fact, I've gone out 5 times since Saturday. I have plenty of food in my house so there isn't a real reason to stop for food at a fast food joint.

If I want to lose weight and gain savings, I really need to start looking at my food intake.


Hourly Rate

Today, I stumbled across an interesting blog "One Caveman's Financial Journey". I love the balance between finance and personal touches. So, as I was reading the back posts I found this post. It really got me thinking. If after taxes, insurance, union dues and the .50 union donation, I only make $8.20 per hour I should really start being more careful with those dollars. My trips to Dunkin Donuts and Starbucks this past week cost me two and a half hours of work. Yikes! Those coffees and what not were not worth two hours. If I only remember to keep this in mind before I buy things I may think more carefully about buying them. This would be a win-win situation. More money in my wallet and less clutter in the house.


101 Things in 1001 Days

While searching the web, I found this neat site. It has you create a list of 101 things you want to accomplish in 1001 days. That is just about 3 years. I decided this is something I want to try. All of our financial goals on the side bar are achievable but these goals do not have to be. This are things I've always wanted to do and so I created my list. I know I won't be able to achieve all of them and that's ok with me. Having them written down is a way to keep me accountable for at least trying them over the next three years. I am going to try to keep the list as updated as possible. It is current as of today. This is not something that S is taking part in. I did convince one of our mutual friends to join me though.


Steps 10, 11 and 12

on Tuesday, April 14, 2009

Step 10 deals with priorities. This is an area we struggle with as a couple. Paying off debt is number one priority for both of us. This is a very big need. We are wasting money each month by paying interest to credit card companies that we do not need to be paying. Actually, my credit card is paid off and has been since early this month. S has a decent balance on is. We have decided that credit card debt needs to be paid off by the person that created it. This might not be the most effective way to pay it off but it is how we plan to deal with it.
Our second priority is our emergency fund. I will be adding as much as possible to it each month until we have $1,500 in it. This is our first goal. Once we reach this goal we plan to bump up some of our other savings areas and then come back to this goal to reach our eventual goal.
We also have a goal of going to Germany. This is a want. We are using all of our gifts from the wedding to pay for most of the trip. We are only adding a little bit of our own money. This will be one of our last savings goals for this year.

Step 11 deals with setting SMART Goals. A smart goal is something that is specific, measurable, achievable, rewarding and track able. Our side bar is all of our goals and they happen to fall into this category of goals without even know we were doing it. We also have stretch goals which might not be achievable but we wanted to challenge ourselves a little bit.

Step 12 is also about setting goals. It is about setting short, mid and long term goals. These are also laid out in our side bar.

It is really gratifying to find out that we have done so many of these steps without following this guide. It lets me believe that we are on the right track before starting this step journey.


Wedding Gifts

on Saturday, April 11, 2009

Today, S and I opened a savings account together. It is our first account together. We put all of our monetary gifts from the wedding into it and labeled it our travel fund. I am very excited about this because that means we are almost to our travel goal to get to Germany. I can't even put into words how excited I am to go to Germany. Not only because my bestest college friend lives there but also because HELLO it's Germany! We'll continue to add to this account each month as scheduled until our goal is reached.


Step 7, Step 8 and Step 9

on Thursday, April 9, 2009

First let me say, I have not been doing this every day as I should be. Life gets in the way and I do not always have time to do these things. I should make more of an attempt to work on things that I say I'm going to work on. I still haven't posted my introduction to my 101 things in 1001 days yet. That will come this Sunday with an update post. Now on to the business at hand...

Step seven is about figuring out income for a month. During most months I receive two paychecks. Each paycheck works out to about $630 which makes my monthly take home pay about $1260. I do receive a check for transportation reimbursement which usually works out to an extra $20 or so. I use this for fun money or extra gas money if I run over. When S starts work again he should be bringing home just about the same amount of money. We should have about $2400 per month to work with.

Step eight is dealing with net worth. I calculate our net worth each month on the sidebar. Have a look <----. It is not entirely accurate since it does not include S's bank accounts but it does include his debts. So in reality our net worth is slightly higher. I will continue to do this monthly.

Step nine is a debt test. I took the test and answered yes to some of the questions. At the end, it says if you answered yes to any of these questions debt pay off needs to be a priority. The two questions that I answered yes to honestly have nothing to do with debt pay off. One ask if our e-fund is inadequate. I answered yes because it is not where we'd like it to be. This is not because we have debt. It is because we used our savings for a wedding. The second question I answered yes to also has to do with savings. It says if I lost my job would we be in financial strain immediately. Yes we would because our savings is inadequate again not because we are in debt. Over all, on the questions related to debt I answered no which would make us pass with flying colors. I know we need to work on savings and that is going to be our next priority.

Ok, I am all caught up with this. I really should work on the next few steps as I'm going out of town for the weekend but I will do them when I return. As of right now, I'm not finding this a good way to get on track financially. We'll see how the rest of the days play out.


Step 5 and Step 6

on Monday, April 6, 2009

I'm putting step five on hold. I just paid a substaintal amount in credit card bills and expect my credit score to rise because of this. I am going to wait to pull my score for a two months or so in hopes that this information positively effects my score. Step six says to fix any errors found in step five. I'm not doing step five so I can't do step six.

Step 4

on Saturday, April 4, 2009

For all major bill paying and other financial situations, I am the go to gal. While I don't really have uninterrupted time to do these tasks, I am doing the effectively as we have never been late will any of our bills. We do not have an automatic online bill payment system but I do pay all of our bills with the exception of one online. My parents gave us an old filing cabinet with a huge dent in the top. While it's not very pretty it does work for our uses. All of our mail is filed in this cabinet. The bills to be paid have a section as well as all other paperwork. The system really needs to be revamped but that will have to wait for another time; probably this summer.

It seems so far that these steps are not really helping us. I also am not sure I'm putting enough information in my posts about them. We'll see. I shall continue and finish this program.


Step 3

I have been working on step three for a while now without the help of this program. It pertains to paperwork. Not too long ago, I posted about my organization of our filing cabinet. While I'm not entirely happy with the system we have now, it is much better than the lack of system we had before.

I usually keep grocery receipts until the food is finished and after it has been recorded in Microsoft Money. I keep my pay stubs for longer than necessary. I have them for about three years. I do not have any canceled checks. All of the checks that I write are saved automatically online. At this point, the only utility bill I have is the phone bill. I have been keeping these but I suppose I don't have to any more. We do not own a home or have a lease right now so none of those papers to worry about. As far as bank statements and credit card statements, both are available online. I do keep hard copies of my checking account statement in our filing cabinet though. I'll admit I need to keep better track of my taxes. I have 08 and 07 but for the life of me can't find anything prior to that. I will be keeping them from now on and will keep at least seven years worth.

For most things that I am throwing away, I shred it first. We have a shredder at my parents as well at work. I just bring my paperwork to one of these places and use their shredder. Hopefully, we will not have any fraud in our future.


Step 2

Step two involves a quiz posted on the website. After taking this quiz and tallying up my points my score falls into this range:
11-15 Points: Reflects a good effort to manage your money effectively. The 30 step plan can help determine changes that can be made to improve your financial well-being

Questions two, three and six are our biggest need areas. They are savings and budgeting related. I agree with this quiz completely that these are our biggest need areas.


Step 1

Step One-

I just put through my last payment to my credit card. As of the 7th when it is posted, my credit card will have a zero balance. I will not be amassing any more credit card debt that I can not pay off in a month and was doing very well with this until the wedding planning. With better planning and a clearer budget this should not be a problem. Through this I hope we become good examples for our daughter. With financially sound parents she will learn that credit cards are not free money and how to pay bills on time. We also want to express to her that wants and needs are different and how to obtain both by practicing good money management skills.


A few new things!

on Thursday, April 2, 2009

I have a few new things I want to start; some finance related and some not but all will be posted here. Each of these probably deserve their own post but that will come at a later time.

First off, our savings snowball:
Now that all my debts with the exception of my college debts are paid, I want to start saving for a few different things. As I achieve a savings goal I will move the money that I was paying to that goal to the second goal and so on. To start most of my money will be going to the emergency fund.

Emergency Fund - $350 per month until $1,500 then $50 per month
Travel - $50 per month until Emergency Fund is funded then once funded $350 per month
O's College - $50 per month until Travel has enough for our trip to Germany and then $350 per month until other savings goals come up or we move and need to reassess the budget.

Hopefully, that was clear. I have a feeling it wasn't.

Secondly, Financial Literacy Month:
April is Financial Literacy Month. I will be participating in taking the steps listed on that website to the best of my ability. I will post about each step individually unless I do more than one step per day and then those steps will be in the same post.

Third, 101 things in 1001 days:
Starting on the 5th, I will post a list of 101 things I want to have completed by January 1, 2012. I will keep updating the blog as I complete items.

March State of the Finances

March went much better than expected. I received my federal income tax refund. This was more money than anticipated and significantly helped reduce my credit card debt. Thanks to this I should be able to pay off the credit card during the month of April. When this is completed I am going to start a savings snowball which I will explain in my next post. Hopefully, with my raise that I received on the first and the lack of wedding preparations we will be able to save more money and create a more realistic budget.

Here goes:
E-fund - increase $1.15
Travel - new category - no progress
House - no progress
M Retirement - no progress
S Retirement - no progress
O College - no progress

M Credit Card - decrease $4700
S Credit Card - increase $900
M Student Loan - decrease $130
S Student Loan - no progress