Where the Hell is my Money

When creating my budget, I pretty much just looked at how much I was already spending, and where, and wrote that down.  I have read in magazine articles and such that your expenses should be broken down by percentages, but I didn't really know what those percentages were.  For fun today I decided to look that up, and see how my budget measures up.  

I am sure there are a hundred different ways to break this down.  Every "financial expert" has their own opinion.  I just googled it and trusted the first "expert" I found.  It was from CNBC.  It breaks it down like this:

House (mortgage or rent, taxes, insurance):  30%

Transportation (car payment, gas, insurance, maintenance): 18%

Debt: 10%

Food (including toiletries & anything else you use daily): 14%

Household (utilities, cable, internet): 7%

Savings: 10%

Everything else: 11%

Now here's what I actually spend:

House: 29.4% (pretty good, huh?!)

Transportation: 8.3% (we don't have car payments, thank goodness, though we should probably be saving more towards the purchase of a new vehicle should either of ours give out)

Debt: 7.1%  (you would think as much as I complain about paying of debt I could up that to at least the recommended)

Food: 14.1% (pretty close)

Household:  13.1%  (almost double the recommended-- that's something to work on)

Savings: 5.3%  (suck)

Everything else (and here's the bad one): 22.6%!! 

Clearly there is some work to be done here.  I will be reevaluating things to try to get us at least slightly closer to where we should be in some of these categories.  Upping Debt and Savings are the main goals. We'll look at this again at the end of next month and see what we can do.  

By the way, I highly recommend checking out the CNBC link above.  It has a budget calculator so you can put in your monthly income and it tells you exactly how much, according to the aforementioned percentages, you should be spending in each category.  

And with that, happy budgeting.

Month 1 Revisited

Well my goal of creating a daily (or even weekly) blog kind of fell apart, didn't it?  I guess that's my way of showing life reflecting budget.  The budget kind of fell apart as well.  But really, that's the beauty of budgets.  They fall apart, they evolve, they do many wondrous things.  My budget used to be a beautifully regimented thing, because I lied.  I budgeted out Hubby's salary but never added my part-time job.  So I'm thinking, WOW, I can really balance a budget!  Everything always worked out and savings were never dipped into.  Now that I don't have an extra paycheck I realize how hard it is to actually make these things work.  There is no extra padding, we only have what is written down on the piece of paper.  That piece of paper is so unforgiving.  It doesn't care if everyone gets sick and needs medicine that costs more than the "Medical" envelope allows.  It doesn't care that it's somebody's birthday and it would be really nice to order pizza to celebrate.  It doesn't care if someone unwittingly left the garage furnace running for three days and our power bill shot through the roof.  All the budget cares about is itself.  It cares that, come the end of the month, it doesn't have a negative balance.  Selfish bastard.

So since that silly piece of paper doesn't care, it's my job to care.  And I have spent this month doing a lot of caring.  It's been pretty interesting to find the foods that were shoved to the back of the pantry and creating new meals, desperate because I know there is only $20 left in the food budget and that has to be saved for milk (though, who knew, I have a box of powdered milk-- if all else fails, I guess we'll find out how that tastes in our morning cereal).

There are five days left in the month, and we have not quite run out of money yet.  Of course, I have not paid off as much of the credit cards as I originally hoped, and I still have license plates to renew, but for the most part I've made it work.  Hopefully next month will be more productive.  Sadly at this point I just feel like I'm holding my breath until tax refund time.  That's no way to be, but what can you do?  On a positive note, we were able to pay all of our bills and not starve to death.  We will not be losing our home or cars or anything else due to lack of money this month.  That's a lot more than some people can say.  The earthquake in Haiti was a big eye-opener for me.  I didn't want to, but I watched the fund raiser with all the celebrities talking about how sad life in Haiti is (what can I say? Kid Rock was singing when I turned the TV on, and the white trash in me will not allow me to deny Kid Rock my attention).  My life is not perfect, but it is wonderful.  I sat on the couch with my microwave popcorn and my name brand soda and cried my eyes out, realizing how blessed I am to have my home and my family safe, and yes, I have consumer debt-- but in a way isn't that a blessing too?  If the worst thing I have to deal with is paying off some stupid purchases, I am the luckiest person in the world.  I have thus far never had to dig a family member out of the rubble that was once our home because my city has been destroyed by a natural disaster.  I have never had to depend on the kindness of people on the other side of the world to make sure I have the basic necessities of life.

Sometimes it's easy to forget these things.  Especially when you want so much to pay off bills and be financially secure.  Tithing is such an important part of my budget, and for a few weeks I let myself forget that.  But what is ten percent of my income, really?  Believe me, it's not that much money.  Sure, it COULD be used to more quickly pay off a debt that I never should have allowed myself to accrue anyway.  But aren't there millions of people who could put it to better use than that?  Thanks to Kid Rock, I realized the error of my ways.  And I think I sleep better at night knowing that my money is helping people survive rather than helping me purchase more crap I don't need, or paying for the crap that I already bought that I don't need.  We made our token donation to the Red Cross after watching that show, though I will admit it wasn't as much as it should have been.  My goal for February is to continue on my path towards simplicity so I have the money available to help the world outside of my 4 walls.  I don't go to church anymore, but I still firmly believe that all I have, I have because of God.  Therefore, giving back ten percent in order that His world can be a better place, really is a small price to pay for all I have received.

The Dreaded Power Bill

There is no better way to ruin a weekend than to see your power company's e-bill sitting in your inbox first thing Saturday morning.  I woke up Saturday to a $300 power bill.

This is my first winter in a house (well, in a house I've been responsible for paying the bills on).  Apartment dwelling has its benefits, especially in the utilities department.  Not only was our townhouse significantly smaller than the house, but it also shared walls on both sides, which makes for awesome insulation.

I clearly didn't totally take these factors into consideration when planning my budget.  We went from a much smaller townhouse with gas heating to an all electric house.  Obviously I expected the power bill to go up a bit, but not in my wildest dreams did I imagine we would hit the 300-mark.  Needless to say, I spent the weekend in a panic, trying to re-budget for the month in order to come up with payment for this.

January has been a crap month for budgeting.  It's the first time since the summer that we've been sticking to it, and unexpected expenses seem to be coming out of the woodwork.  Dues for various community organizations are due, the new experience of Homeowners Association is upon us, the repercussions of spending too much on Christmas hit, AND apparently the power bill also goes through the roof.  So it's taken a lot of reorganization.  Here are a couple of immediate steps I took:

1.  Live off the pantry.  I buy a lot of food.  A lot.  We have a fairly full pantry and freezer.  This normally doesn't mean much because we have a few basics that we always eat, and the rest gets neglected.  So as of Saturday we are officially not buying groceries until we have eaten through what we have.  Now of course we're already hitting that time when we have run out of some essentials (like canola oil) that will have to be bought in order to cook the food we have.  But I am limiting the purchases to those type of things.
2.  Turn off the space heater.  I am naturally cold.  I sleep with the space heater on, and turn it on at various times throughout the day.  Since Saturday I have learned to layer clothing and carry around a quilt.
3.  This one I don't necessarily recommend for others, but in a moment of desperation I borrowed from the nest egg.  According to Dave Ramsey, there are certain steps one should take in order to eliminate debt and live a financially secure life.  He recommends an emergency $1000 savings account which was discussed earlier, then devoting all your extra cash to paying off consumer debt, then setting up a larger emergency fund that should have 3-6 months worth of living expenses.  I call this emergency fund our nest egg, just to clarify between it and our $1000 savings account (which, also as discussed before, isn't quite up to par right now).  We put this money aside before paying off consumer debt because we are a one-income household and my husband works in a somewhat insecure industry (who doesn't these days?).  Just for our sanity, we wanted to have a few thousand set aside "just in case."  This money is in a money market account that is not used at all except to hold this money and gather a tiny bit of interest.  Well, I used that interest to pay the homeowners association today.  Not sure if that was the best idea, but at least it's paid.

Now my big question becomes: how do we lower our power bill?  Beyond the space heater thing, I don't really know where to conserve energy.  I fear the thermostat needs to be lowered a couple of degrees, but I haven't been able to bring myself to do that yet.  My power company has a list of helpful hints here, but I didn't find them overly helpful.  Except the one about the convection oven.  Apparently they use a lot less energy than a regular oven.  Though I don't think I can really justify that cost quite yet.  So over the next few days I will be attempting to compile my own list of energy saving techniques to share with you, and hopefully I'll learn a thing or two myself.  Until then....

Family Feasts for $75 a Week

While one day whining about my sometimes fruitless quest for frugalness (frugality?  I dunno), I was told to check out this book.  So I hit the library's website (libraries rock, I'll get to that in a second) and requested it.  I was pretty skeptical given that our family has self-imposed dietary restrictions that don't always mesh well with books about food.  But last night I began flipping through it and, oddly enough, I cannot put it down.  It is full of such great advice and hints on how to save money at the grocery store, how to prepare food ahead of time, and ways to better organize your pantry and grocery list in order to save the most money.  It is GREAT!  It is so great that I intend on actually paying money in order to have my own copy!  (Well, not entirely true-- I have a couple of gift cards for bookstores.  So I won't actually pay MONEY for it, but I will utilize a gift card for it.  That's still something, right?)

Back to the library.  My city's library system is great.  Maybe not the best, I don't know, but pretty freakin' awesome nonetheless.  I can access my account online and see everything I have checked out and when it's due, and renew if I need to (that often, though not always, saves me on late fees) and I can search for things and put them on hold.  They could have a wait list or they could just be at a branch an hour away, either way I can request it and when it's ready it's sent to my branch.  All from the comfort of my couch!  We try to make a library run about once a week.  We fill up a giant reusable grocery bag with my holds, anything else that looks interesting to me, a giant stack of kid books, and a few DVDs.  Yes, our library has an amazing collection of DVDs.  There is never a need to pay for a movie because you can always get it at the library.  Though sometimes we do still pay for rentals because we're Americans, we like instant gratification.  You can't necessarily get the new release on the day it comes out at the library.  Though sometimes you do get lucky, like this week I got a copy of District 9 which came out fairly recently.  Those days when you can get a new new release, your chest just swells with pride.  It's like using a double coupon on a sale item and getting it for free!

Speaking of coupons, I've been trying to figure out the best grocery store strategy.  It's been weighing heavily on my mind for a week now, and last night the aforementioned book highlighted it.  The author keeps a book listing the best prices for all her regularly used products at all the stores in the area.  That seems like A LOT of work.  But I guess it's worth a try.  I normally shop at Aldi, which does not take coupons but has incredibly low prices; Wal-Mart, which takes coupons but doesn't double them; or Kroger, which doubles coupons but has obscenely higher prices on everything else.  Now, driving a little out of my way is a Meijer, which advertises low prices and doubles coupons, and I'm thinking I might have to experiment one day and see where it falls in the grocery store spectrum.  I don't know if I'm up for shopping at multiple places in a week.  I know if you shop the ads and double coupons and all you can probably come out ahead going to a lot of places, but I'm doing this with 2 little boys and we are lucky to get through ONE store without somebody getting bored and freaking out.  I'm not sure saving money is worth the insanity it would bring to drag the kids in and out of stores all day in search of the best deal on O.J.  But my thinking is that I can visit different stores over the next few weeks and check out the prices on most used items, as the author suggested, then work out a system where I shop at a different one each week.  I don't know, I'm still working it out.  I'll let you know when I get it figured out.

And God laughs...

OK, this week is off to a bad start in the budgeting department.

First of all, let me stress the importance of an emergency fund.  It is a REALLY good idea to keep $1000 in an easily accessible savings account.  That way when something goes wrong (the car breaks down, the water heater stops working, etc.) then you don't have to run to your credit card in order to fix it.

...I recently had such "emergencies" as Christmas shopping, paying bills after doing too much Christmas shopping, and buying the dog's 6 month supply of heartworm medicine (OK, the last one sounds slightly more justifiable than the others, but really it's not-- if you're going to own a pet you really need a "pet" section on your budget that covers food, vet visits, and medication).  Needless to say, my emergency fund kind of sucks right now.  I wasn't too worried about it.  I thought, "holidays are over, the dog is healthy, we'll be fine for a few months."  ...and then God laughed...

Back to the pet budget.  Pets are a HUGE responsibility.  I swear my dog costs as much as another child.  Between his adoption, food, and the medications he's needed to clear up parasites from being a shelter dog (shelter dogs are the best dogs, but can come with the worst problems-- PLEASE adopt from a reputable shelter if you're in the market for a pet, but also be financially prepared for fixing any issues they might have), we depleted the "pet" budget that I had saved for so long in preparation for our joyous addition.  There are always more costs with a pet, at least with a dog like mine.  He's a large breed puppy, so he goes through toys and rawhides like you wouldn't believe.  Oh!  And the food!  ...but I feel I digress...  The point is, my pet budget is not funded as well as it apparently should be.  I thought $60 a month should cover food for both pets (we also have a cat) and litter for the cat.  It does, but that's about all it covers.  It does not leave room for incidentals.  Or emergencies.  And unfortunately, today we have an emergency.

Kitty seems to be sick.  We'll be heading to the vet as soon as Hubby gets home from work tonight.  Of course I'm worried about her as a member of our family, but I also just keep seeing these dollar signs dance through my head.  And not in the good way.  Even a minor emergency is more than my wimpy budget can take right now, and I fear this might be a bit more than minor.  Of course we won't know until we get there, but I'm very nervous.

Isn't it funny how these things always seem to happen at the worst moments?  It couldn't have happened two months ago, when I would have thought nothing of putting it on the credit card, or three months ago, when I had a fully funded emergency fund.  No, it happens now.  God's laughing, you know He is. All we can do is step back and laugh with him.

Resolutions, or helpful suggestions

Well I had two half-hearted new year's resolutions to help with my financial goals for the year:  no more eating out and pay cash for everything but gas (don't use the debit card for any purchases but gas).  Yesterday, January 2nd, I failed on the cash one.

It is so easy to just pull out the debit card!  I consider us lucky that we immediately run to the debit card rather than an actual credit card.  At least with the debit card the money is immediately gone, you're not just racking up interest on debt you'll have to pay for later.  But still, our debit card spending is out of control.

The biggest problem is, as nice as cash sounds, you actually have to go to the bank to get it.  I never go to the bank.  It's out of the way and a hassle to get to.  And why should I?  Our paycheck is direct deposited into our checking, our savings account automatically takes money out of the checking account after the paycheck is in there, and if I need to monitor/pay/question any transactions, I can do it all through online access.  Ahhh, the wonders of technology!  I can be even more of a hermit than I already was!

So now I'm going to have to actually write it on my calendar or something and force myself to go get cash twice a month....  So far I haven't done that, hence the trip to Sam's Club that was partially put on the debit card (I say "partially" because I used a gift card for part of the purchase. thanks, Mom, for buying my toilet paper and Boca burgers).

It's amazing how fragile budgets are in the beginning.  You think you have it all worked out, but there is always some reason to put something on a card instead of paying cash, or to justify buying the kids ANOTHER book with money that is technically allocated for charitable giving.  I know that once you get in the habit of budgeting, it's really not that bad.  It's just getting IN that habit...

Why is it that bad habits are so easy to fall into, yet good habits are impossible to start?  Smoking, drinking, caffeine, sugar...  these are habits I can really get behind!  Those things, you do it once and you're hooked.  It's harder NOT to smoke than it is to smoke.  But budgeting?  It's not something that you can do once and find it impossible to stop.  Oh no, you could do it twenty times and, though it does get easier, it is still a pain in the butt and oh so easy to give up.
Though maybe I am just looking at it wrong...

The New Year's Resolution

How many blogs do you think start on January 1? My guess would be a lot. We all make these resolutions then need someone- something- to hold us accountable. My method of choice: the blog.

Though really, I am not doing this for the New Year's glory. I'm doing it because I read too many books. I read so many books that I thought, I want to write a book! A.J. Jacobs writes these great memoirs all about him doing something completely weird for a year of his life. In The Know-It-All, he spent a year reading the Encyclopaedia Brittanica, in The Year of Living Biblically he... well... you can probably guess.

So I was sitting here reading A.J. Jacobs one day and I said, "I want to write a book about doing something weird for a year!" My husband said, "good luck with that." ...I am rarely taken seriously in my house... Then he suggested I start a daily blog about doing something weird. That's how many of these books are started, he says.

So I thought about it... what could I do every day for a year? The goal I came up with: no eating out for a year! This is an honorable goal. The drive-thru lady at Burger King knows us by name. My kids think Taco Bell is part of everyone's daily diet. I was really gung-ho about this. I created a month's worth of menus (breakfast, lunch, AND dinner). I thought about making a graph. All kinds of excitement. But then, I really started thinking about the rules. What does "no eating out for a year" really mean? What if someone else is paying for it? Then is it OK? We love eating out. Could we really do this for a year?

I made a list of exceptions, such as if someone else is paying then it's OK. Then I realized, that's just bogus. It doesn't count if you have twenty exceptions.

So unbeknownst to my sweet husband, I'm giving that one up. Though not entirely. The new goal is to budget like I've never budgeted before. Thanks to the genius of Dave Ramsey, I dug us out of a hole once. We got most of our credit cards paid off and saved enough to get out of renting and into a mortgage. That was last year. Then we moved into said house, and then Christmas came, and now we have about $2000 in credit card debt again. And the mortgage. And I will soon be a college graduate so student loans are right around the corner. A lot of student loans. And did I mention I'm a stay at home mom?

Our belts definitely need to be tightened, so that's what this blog is about. This year I intend to do whatever it takes to get our finances in order. There will be lots of personal information shared, probably a few failures, and hopefully some successes. Dear Reader, we will travel this lone and murky road of personal finance together, and we will both come out the other side, though I cannot guarantee unscathed.