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The Part Time Job

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I’ve bitten off more than I can chew…so this past weekend I resigned my part time job, and I felt horrible about it.  One because I really enjoyed just getting out of the house and my typical routine and being around other adults and just doing mundane tasks that I didn’t have to bring home.  Oh, and the bi-weekly deposits into my newer emergency fund were nice.

I went in for what I assumed would be my last day this past Friday, and realized just how much I appreciate and respect my boss there.  She is rock steady, a micro manager without being a micro manager and I didn’t want to lose that relationship I’ve started to build with her.  I didn’t want to quit.  So I let her know the circumstances and offered to just come in on Fridays and do project work.  And she took me up on it!

So what was a part time job, is now really only going to be a few hours per week, but I think it’s a good compromise and I’m glad it worked out for both of us.

Since this money really only funded my EF it won’t really affect my  debt payoff journey, but will continue to contribute to my baby steps to become more financially sound in the long run.  Baby steps!


Scary Reminder

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Something terrible happened in a friend’s life this week (to be fair, its my bro-in-law’s best friend, he was the best man in my sister and bro-in-law’s wedding. I’ve only met him once, when I was MOH and he was Best Man. Anyway….).

Mark had used a portable grill to grill some dinner while his pregnant wife and son played inside. After they ate Mark thought the grill had cooled, so he brought it back into the garage.

I don’t know the exact timing of things or sequence of events but at some later point that evening, Mark smelled smoke. He opened the door to the garage and saw that it was fully engulfed in flames.

He ran inside to get his wife and son and they ran outside with only the clothes on their backs. His wife had grabbed her cell phone. That was the only material possession they had (and they promptly called 911). Watching the fire blaze, Mark’s pregnant wife’s water broke. The stress had caused her to go into early labor. Being that both of their cars were in the garage she had to call 911 again. This time, she had to ask for an ambulance to take her to the hospital (being that both their cars were currently on fire).

They went to the hospital and Kirsten delivered their sweet baby girl (although slightly premature, the baby and Mom are both fine, thank goodness). But now they have nowhere to go, no way to even get the baby home (no car seat, no car), and one other thing…..they were renters and did not have renter’s insurance. They literally have nothing to their names.

It’s a terrible thing. Thankfully they have each other and everyone is safe (that’s the main thing). But its still devastating. Perhaps moreso, given the new baby.

When it happened, my Mom called me in a panic:  “I’m so worried about you guys! You have renter’s insurance, right???”

Of course we do, Mom!

……..

Wait a minute…..do we?

We moved into our current place (where we rent) at the beginning of last August. At that time we had paid in full for one year’s worth of renter’s insurance. Being that we’re now at the end of August, our policy has lapsed and we are currently uninsured. Guess what I’m calling about today to renew? Yep – renter’s insurance.

Let this be a reminder to all of you who rent. Renter’s insurance is one of the cheapest forms of insurance that you can buy. Please, please, do not let yourselves be uninsured.

 

If you feel inclined to donate to this family, a Go Fund Me has been set up here.  Please do not feel at all obligated, they have had an outpouring of love and support from friends and family, so I’m sure they will end up being okay. I just wanted to share (and to add legitimacy to the story – pictures are included on the Go Fund Me site).

 


My Hopes

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Hi all!

Thank you so much for all of the fabulous tips and comments you left me on all of Monday’s posts. I always appreciate constructive criticism and love all of the ideas you have left in the comments – it gives me lots to think about.

Right now, I’m not making any big changes. I’ve decided to put off all non-essential purchases (including hair cut/color, dental work for my chipped tooth, vehicle maintenance, etc.). I think this month has really been tough financially and I just want to wait and see how the dust all settles before making any changes or spending any more money. All of these expenses are “necessary” (in that, yes, I need to have my chipped tooth looked at, we need to take care of our vehicle, etc.), but nothing is urgent so I’m just putting it all on hold for now.

Instead, I want to talk about what my hope is for the outcome of this month (calling them “hopes” instead of “goals” because I feel like, with 1 week left in the month, we’re a little late in the game for defined “goals”…though I will be updating our goals for the upcoming months in a post to come next week). Remember, with our variable income it’s always difficult to predict how a given month will go. That’s one of the reasons I’m so keen on starting to live on last month’s income!

Soooo, here are my hopes in order of importance (#1 being the most important hope, #2 the second most important, and so on).

  1. I hope we’ll have enough money leftover at the end of the month to do great things, as opposed to barely covering our expenses. Remember, we had some very pricey expenses this month (husband’s root canal, and my car maintenance). Currently, the “other” portion of my budget spreadsheet shows nearly $2,000 in expenditures (for reference, only $125/month is budgeted), so this is already a huge excess that will eat up a lot of our “extra” income. My first hope is that we’ll still have plenty extra even on top of this.
  2. I hope we’ll be able to put $2500 toward my “living on last month’s salary” savings. Last month we socked away $3200, so if I were able to add $2500 that would bring us to a total of $5700. That’s much lower than we’ve been earning the past few months (our income has been closer to $9,000ish), but it’s certainly a livable amount. Plus, it would only be one month with this somewhat lower income, because we’ll be stashing the full amount of all of our August paychecks for use in September. I’m very excited about living on last month’s income, so I have put this hope above #3.
  3. I hope to pay off the last of the license fees. I’m going to be honest and say….I don’t think we’ll be able to do this in full. We still owe a little over $4,000. Originally, I was thinking we’d be able to have that paid off by August (this is the bill we’re currently throwing our snowball at and our regular snowball payment is $1055/month). I don’t think we’ll have an extra $3,000 from July (on top of the $2500 going toward “living on last month’s income” and the $2000 already spent on car maintenance/dental care) in order to make this happen. But hopefully we’ll still be able to make somewhat of a dent.

Just to give a brief heads up about where our finances are sitting right now, today (with another week in the month to go), our expenses total roughly $7500, and our income is sitting at just under $9000…..so, yeah. It’s gonna be tough.

That being said, we shouldn’t have any other big expenses (knock on wood!) and husband still has another check coming his way so we’ll see how things all shake out. I guess this is what Dave Ramsey refers to as “more month left than money.” Ugh! I’m wishing August would just hurry up and get here already!!!! I can’t wait to give an updated budget, see where we stand with spending, and where we are in our debt payoff journey!

On a semi-related topic – we do have some extra cash in our regular checking/savings account. Remember that I like to keep a buffer of at least a couple thousand sitting there to cover bills (this is how I was able to pay all our expenses the first half of the month while we were waiting to get paid. I also talked about the buffer this post). Since we’ll be living on last month’s income…..could I eliminate this buffer and put that money toward these hopes??? Note, this isn’t an official “emergency savings” (I have that set up as a Capital One 360 account), and the money goes up and down depending on the time of the month, the bills that have gone through, when we’ve been paid, etc. But it occurs to me that if we fall short on some of this month’s hopes that maybe we can simply take money from here to try to make a larger dent in our debts (and/or make sure we have enough for living on last month’s income). Just so you have the full financial picture, we only have $1200 in our “emergency savings” account, but we have several sub-accounts for various things (car repairs, dental/vision, semi-annual expenses, vet expenses. A full list of our monthly savings can be found here.) and if something awful were to happen I could always tap into our money market mutual fund account (which has close to $6,000). So we don’t have a ton of liquid assets, but we do have enough that we may be “safe” to eliminate our buffer….

Thoughts?


Another big unexpected expense

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July has turned out to be quite an expensive month for us!

First, my husband had an emergency root canal. Then my tooth chipped (I still need to go have an exam to see if it will require repair, but I think I’m going to try to wait until August since July has already been so expensive!).

Then on Friday last week I took our Explorer to have an oil change. The light had been on for almost a week (since our Utah trip) and, although the husband generally does oil changes himself, I found a coupon online for $21.99 (by comparison, we usually spend about $20 for the stuff needed for husband to do it himself, so this was a great deal).

Well, of course I can’t get off with only a $21.99 charge. That would be way too easy. Instead, the mechanic comes in to talk to me in the lobby and explains that our car is currently at 59,500 miles. He recommends a whole slew of regular maintenance items that are recommended by Ford at 60,000 miles. To the tune of nearly $900.

My heart rate goes up and I swear my hands start perspiring. That is a LOT of money.

Many years ago, my husband used to work as a salesperson in an auto shop. Even though he didn’t do the mechanical work, he knows a good bit about cars. I call him up and let him speak directly to the mechanic. After their conversation I talk to my husband. He is a big proponent of taking good care of one’s car. Although most of the services aren’t immediate needs, he thinks everything should eventually be done. This kind of routine maintenance is what helps a car to last to 200,000+ miles (which is our hope – to drive this car to the ground!!!)

One other relevant tidbit I left out – the mechanic is a freemason. So is my husband. This may not mean anything to most of you, but freemasons are a very tight-knit group. They always deal fairly with each other. They would never ever rip each other off. Because of this, we had an extra layer of peace-of-mind that the mechanic wasn’t just trying to screw us over to make a commission on the work.

So I asked the mechanic to rank-order what needed to be done and to get started on the first several items. I wanted to spread the work out over a few months and there are a few things that my husband is going to do himself so we didn’t do everything that was recommended.

I waited anxiously, nervous of what the final bill would be.

When I finally went to pay, the mechanic, himself, came to the front to discount some of the labor charges (he took off about 20% total!). Our final bill came to $509. This does not include changing spark plugs and wires (which was estimated at about $200 and will be done probably in September or October since I want to wait a bit), nor does it include the air filter (which hubs can do himself for really cheap).

Out of our monthly car savings (a sub-account in my CapitalOne360 account), I had $260. The remaining of the bill was paid out of pocket. So, the remaining $249 remaining balance ($509-$260 = $249) is going to have to come from the “other” category of our budget (side note:  I’m also including husband’s root canal in this category of our budget. Initially I’d said I was going to simply subtract it from our income – never including it in our budget at all – but Scooze pointed out how that doesn’t give us an accurate picture of our finances, which is important for projecting future expenses, etc.). Sooooo, we’re going to be really REALLY over-budget in our “other” category this month. Just a heads up.

This whole car maintenance thing also makes me worried about my husband’s work truck. You may remember me talking about how old and beat up it is. We were estimating that it would probably have to be replaced this winter (*gulp*). I’m at a loss for what to do. Start funneling more money into our car monthly savings (we’ve been saving $50/month previously)? Just stay the course and hope the truck continues to hold out?

The reason we thought we’d have to replace it in winter is that the past 2 winters it has given us problems with starting when it gets cold outside (making it unreliable in cold weather). It’s A/C has also been out for an entire year now (meaning, husband has been driving around in 110+ degree days with no A/C all summer). The estimated cost to fix the A/C is another $1,000 and husband replaced all the parts associated with the starter last year and still had problems, so no idea what that will cost. Right now no money has been going into it at all, aside from regular oil changes and gasoline (didn’t want to invest money into it when we thought we’d be replacing it soon).

Other pertinent information – Kelley Blue Book estimates its value at $3700 (not too shabby since we paid only $3,000 about four years ago). This could be “off” though, given the problems its having (no A/C in Tucson is kind of a deal-beaker for most buyers).

Why oh why is vehicle maintenance so expensive? And why oh why is everything breaking/falling apart at the same time? Is this a case of “you’ve done too well…now Murphey is coming to visit!!!!”????

Tips, suggestions, advice? What would you do?


Ashley’s June Budget

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Hi all! Happy Independence Day to the U.S. readers! I hope you all have a safe, happy, and healthy long holiday weekend! I’ve scheduled this post ahead of time because I’ll be spending time with family all day today. For those of you who would like an update on our Utah trip, we decided to split the drive into 2 days on the way there and drive straight through in 1 day on the way back. We’re coming back Sunday (meaning, we won’t be home until late Sunday night). I’ll try to write a post with this trip’s expenses as soon as we return.

I promised an update on our budget for the month of June. This was my second (and last) month of trying to do the envelope system. This month I’ll be using the YNAB free 30 day trial (and it sounds like some readers will be doing it with me!). I’ll certainly update about my experiences with that along the way, but for now let’s cut to the chase of how I did with our June spending.

Overall, we didn’t do terrible. I feel like I’ve given you a ton of budgets lately (“old” and “updated” – see this post), so instead of boring you with yet another budget, let me just give you the bottom line.

Here are our budgeting “fails” for the month:

  • First: We went way over with groceries. I had budgeted $380, and spent $453. Some of this was due to expenses from hosting the toddlers’ second birthday party. But some of it was just due to unnecessary spending on ‘gourmet’ grocery expenses (like cheeeeeese), and a big Costco trip. I have raised my grocery budget back up to $400 (where it was set prior to starting blogging), and I am excited to stick to the $400-limit. I will NOT go over this month. I will NOT go over this month. I will NOT go over this month. If I say it, it must be true. Yes? (psssst: but using the YNAB system, its okay if I go over a little because I can take that money from another category).
  • Second: We failed on our “eating out” budget. I had budgeted $75 and spent $149 (nearly double!!!) The funny thing is that I really don’t even remember eating out much this month. Then I look at my spreadsheet and see a string of drink stops (Starbucks, Sonic, Wendys – who has the best strawberry lemonade in the world!) All of these stops, individually, is only in about the $4 range. But they sure did add up! There are only 2 actual dinners out….ALL the rest of the expenses are little trips here and there that added up. This was total lack of constraint on my part. I WILL do better this month!

And here are our budget “successes” for the month:

  • First: Our childcare expenses were much lower than normal this month, so we saved a couple hundred dollars there.
  • Second: I was proud of myself in that I was “under” budget in all of my “miscellaneous” categories besides eating out (to jog your memory, the other categories include:  entertainment, personal maintenance, and “other”). I’m thinking I might be able to lower the “other” budget a little but I want to wait a month and see how things go. I was barely below budget this month ($120 out of $125 budgeted), but since I’m saving for so many different things now, I’m hoping I can reduce this category of spending.

All of my other expenses were pretty much in-line with what they should be (either at- or under-budget). The only other categories with higher spending were in debt payments (where we paid nearly $2000), and my gym membership (since the first month I had to pay $240 – to account for first and last month’s payments + an initiation fee). This should decrease back down to $70. (Side note = I realized in my updated budget I had my gym line-item as $50, but that’s the base fee…I’m paying an extra $10/child for gym childcare, so the monthly cost should be $70).

Whew! Lots of words! Now onto some numbers:

June Income: $9406

June Expenses: $5706

Income – Expenses = $3700 surplus (woohoo!!!)

 

How will we spend the surplus?

$500 = snowflake payment toward Chris’ license fees

$3200 = put money in savings (to build up one month’s living expenses)

I made our license payment earlier this week and it amounted to $1569 ($1055 regular snowball payment + $500 June snowflake payment + 14 extra for the processing fee). This brought the total amount due to just under the $2500 mark (at one point this was over $10,000….though when I started blogging here in March it was just under $6,000). I’m excited to think/hope that the license will be paid in full by August AND that we will hopefully have enough set aside to start living off of last month’s income in the month of September! Fingers crossed!!!

How have you done on your budget lately? Left with “more month than money”? (< a Dave Ramsey saying) What are you doing to try to cut expenses and/or make more money?


Living on Last Month’s Income

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I started my YNAB (You Need a Budget < not an affiliate link) trial and have viewed the “getting started” video (several people said these classes really helped).

So far, I’m not sure this is for me. But there is one aspect of YNAB that I am getting really excited over: living on last month’s income.

Now, this isn’t rocket science or anything. I don’t know why the thought hadn’t occurred to me before being introduced to YNAB. I’ve even had people mention it in the comments before when I’ve talked about our variable income (the main problem with doing a zero-based budget at Dave Ramsey suggests). But it always just seemed so daunting and scary to try to save up enough money to live off of last month’s income.

But now I see the light.

Doing this will solve so many of my budgeting “issues.”

First and foremost, it resolves the issue of not knowing exactly how much we will be making during the month. Also, I’ve mentioned how I’ve had a hard time waiting until the end of the month in order to make our snowflake payments out of any surplus funds we have from the month. Now I’ll have all the funds up-front so I can make these payments immediately at the beginning of the month. And it is my hope that it will make sticking to my budgeted categories easier because there is ONLY “x” amount of money, and that is it (currently, I’ve tried to do that with the money envelopes, but it hasn’t stopped me from swiping my debit card when needed for the girls’ birthday even though I was out of money).

By living on last month’s income I’ll know, from the beginning of the month, exactly how much can be paid toward each variable expense. That money will get budgeted and/or spent and then I will literally be left with only “x” amount for groceries or spending money, so going over budget is not an option. If I really need more money in a category (like gasoline), then I’ll have to take the money from another category where I’ll have to get by with less (like personal maintenance). I like this flexibility, and yet the rigidity of the structure, too.

What I’m not “sold” on yet is the actual software, itself. I can’t even explain why, but I don’t like the way the system is all set up. I much prefer my usual Excel file spreadsheet. But that could just be a “comfort” thing. I will, indeed, use the YNAB software for a month to give it an honest chance.

Honestly, though, I’m excited about the whole “living on last month’s income” thing. I think it will be a positive change for me, and the saver in me likes that it essentially provides one additional month as a “buffer” should worst-case-scenario happen that disrupts work.

But, from a debt perspective, what does this mean?

I’m still crunching the numbers (hope to get a budget update up later today, Friday at latest), but I’m thinking this will probably mean no (or very small) snowflake payments this month. Instead, I’d be setting that extra money aside until I can build up enough to live on for a full month. The YNAB class said it takes most people 4-6 months, but with all our extra income lately, I think we can do it in 2 months. We shall see.

In the meantime, I’m going to create a new subaccount of my Capital One 360 savings called “one month’s income.” I’ll use it as the place where I stash the extra money until we get to one full month’s income (and, thereafter, it will be used for storing our income until the start of the following month). Make sense?

 

Have you ever lived on last month’s income? How long did it take you to build up a full month’s income? What were positive experiences? Negative experiences? What do you think of YNAB?


Budgeting = A Work in Progress

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Before blogging here, I’d had a budget but I’ve mentioned that I didn’t really “stick” to it very well. Basically, if I wanted to buy something (within reason) I would just do it…it didn’t really matter if I was already over budget for the month.

I’ve been trying to modify this behavior (through use of the money envelope system). But if there’s one thing I feel I’ve learned since starting this debt reduction journey, it’s that the budget is like a living, breathing thing. It needs to constantly be monitored and adjusted as necessary to work well.

To jog your memory, here was my previous budget (notice the new line-item for my gym membership):

Item Budgeted
Rent $1055
Electricity $150
Water bill $75
Gas bill $25
Sprint (2 lines) $115
Cable/Internet $85
Car Insurance $90
Health Insurance $350
Waste Management $35
Debt $1500
Gym $50
Miscellaneous $250
Groceries $380
Baby Purchases $600
Gasoline $100
Savings for Irregular Purchases $265
Total: $5125

There are a couple categories that I want to revise moving forward. First, I’m going to have to bump my grocery budget back up to $400. This is what it had been set at before I started blogging and I was hopeful to reduce this number but have failed every single month. Instead of continuing to beat myself up about it every month, I’m going to set the budget at a more realistic number for our family. Back to $400.

 

The other changes all have to do with savings.

 

Here was my old break-down of savings:

$40 for semi-annual fees (car title/registration fees)

$50 for car maintenance (oil changes, savings for new work truck)

$125 for dental/vision (just increased from $50 last month)

$25 for travel and Christmas

$25 for 3-6 month expenses

 

And here are the changes I want to make:

Increase the semi-annual fees savings to $45/month. My “semi-annual” fees were only calculated to include annual car registration costs. Just the other day I got a $50 bill to renew my Costco membership. Oops. So I’m adding the $5/month to cover this expense (and provide a small buffer).

I’m starting a savings for veterinary expenses of $10/month. This came up because our dog (who is like our first “child” – you can see him in my author photo with me) got extremely sick this week. Luckily he pulled through, but my fear at the thought of an emergency vet visit made me realize…we need some type of funds for this. The reality is, our dog is getting old (major sad face!). He turned 9 this year, and he’s a large dog (large dogs tend to have shorter life-spans than small dogs). I hope he’ll be with us for years and years to come. But the fact is that we may need to have some money set aside for eventual vet expenses for old dog problems and end of life expenses (breaks my heart to even say that….but it’d be unwise to ignore the realities of life). Note that his food and regular annual check-ups will continue to come from the “miscellaneous” budget, so this is more of an emergency savings for unanticipated vet bills.

I’m starting a small savings for baby birthday expenses of $10/month. I was conflicted on this one. If I’m going to save for the girls’ birthday, why not also start a savings for all kinds of gift-giving occasions (like family birthdays, shower gifts, etc.) But the dollar amount spent for those is much less, so I think those should continue to come from my “miscellaneous” budget. I could perhaps even reduce the miscellaneous budget since I’ll be appropriating money monthly for all types of expenses that would otherwise be paid with “miscellaneous” funds. I want to monitor this for a month or so before officially deciding whether to lower the miscellaneous budget.

And one last (relatively big) change: I’m going to start setting aside $100 monthly with the intention of eventually investing in a Roth IRA. Per this conversation when I paid off our credit cards and started contemplating the need for retirement savings, the majority of commenters said we should NOT wait on this until we’re completely debt-free. But, I also want some time to do research into different options with different places and feel comfortable about where we invest. In the meantime, it’s easy for me to open a sub-account of my Capital One 360 online savings (<refer a friend link) titled “savings for 2014 Roth IRA.” I will probably stash some money there until the new year (I hadn’t known before people commented, but you can fund a 2014 Roth IRA until April 15, 2015). Then sometime probably in the March time-frame I’ll open up a Roth and make a large contribution (not just the money saved here, but probably adding some surplus funds from February and March, too). I’d love to max out our contribution at $5500. My savings by that time will only amount to about $900 (in March 2015), so I don’t know if we’ll be able to scratch up enough surplus funds to hit the $5500. If I were to set the money aside monthly ($5500 divided by 9 months = $611/month), it amounts to more than I feel comfortable saving right now. Ultimately, this is not a savings/retirement blog….it’s a get out of debt blog. I do feel that there’s a place for retirement savings and it’s an important component of the conversation, but I still have so much debt to focus on that I don’t want to be saving at that level while I’m still trying to shovel my way out of debt.

These changes bring our monthly savings to this:

Monthly Savings

$45 for semi-annual fees (car title/registration fees & Costco membership)

$50 for car maintenance (and savings for new work truck)

$125 for dental/vision

$25 for travel and Christmas

$25 for 3-6 month expenses

$10 for baby birthday expenses

$10 for veterinary expenses

$100 savings for 2014 Roth IRA

Total Monthly Savings: $390 (up from $265/month)

 

Even seeing that amount of money (nearly $400/month) go to savings instead of toward debt kind of hurts. But thinking long-term, having these savings are going to help me prevent accumulating future debt when the unexpected arises. Also, there’s no law that this money has to stay in savings. If, for instance, we build up the veterinary expenses savings and never use it or have no need for it, of course this money can be used toward debt (or toward the 2014 Roth IRA savings, or whatever else we like). But it gives me great peace of mind to have everything accounted for like this.

 

So there you have it, another revised budget. Hopefully the next revision I make will be to reduce the amount appropriated toward “miscellaneous” and increase the amount toward debt. Here’s hoping!

Updated Budget

Item Old Budget New Budget
Rent $1055 $1055
Electricity $150 $150
Water bill $75 $75
Gas bill $25 $25
Sprint (2 lines) $115 $115
Cable/Internet $85 $85
Car Insurance $90 $90
Health Insurance $350 $350
Waste Management $35 $35
Debt $1500 $1500
Gym $50 $50
Miscellaneous $250 $250
Groceries $380 $400
Baby Purchases $600 $600
Gasoline $100 $100
Savings for Irregular Purchases $265  $390
Total: $5125 $5270

What do you think about my planned monthly savings? Is there too much or too little to each category? Are there any other categories you would suggest to include or any you would exclude?