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Posts tagged with: spending less

Talking to Friends About Money

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Today I wanted to talk about something a little taboo (I guess we’ll just keep with the theme, since today’s mid-day post was a bit taboo, also).

Do you ever talk with your friends about money? Not just casual mentions of money, but deeper conversations about budgeting, debt payments, financial goals, etc?

Confession: when I first started blogging here I hadn’t ever talked about money (on a deeper level) with any of my friends, ever! It made for a challenging transition from my old spending habits to my newer (more frugal) ones.

Eventually I slowly started talking a little bit about how I’ve been working to pay down our debts. One of my friends, in particular, has been really kind about my debt reduction mission. She still doesn’t know specifics (exact figures of debt versus monthly payments, etc. etc.), but she knows that I’ve become much more money-conscious (side note: she’s actually made innocent comments occasionally about how “tight” money is right now in our household. LOL! If she only knew the truth = that we spend $2,000/month on DEBT!!!).

This friend and I used to get together nearly once a week for lunch or a happy hour and, instead, we now get together to do a little 3-mile walk/jog on a popular jogging trail here in Tucson. I love it because I’m able to get some exercise and some girl talk all at once, and to do so for 100% free!

But still….no one knows the extent of our debt situation, nor the sacrifices we’ve made to really try to chip away at our debt.

I have a different friend that I was chatting with the other day. She and her husband were preparing their taxes and realized that last year they’d had a dramatic income boost – 33% over the previous year. The scary part is that she said she has absolutely NO IDEA where the money has gone. They still have the same living arrangements (same modest apartment, same old car, no new baby, same basic “stuff”), so it’s not like their expenses have gone up. Just…the money has disappeared.

To be totally fair, she recognized that her spending has gotten a little “willy-nilly” lately (e.g., extra Starbucks runs, more dining out), and my friend is one of the most generous people ever so she spent a TON at Christmas (I don’t want to give her financial specifics, but when she told me the amount she’d spent on family I was SHOCKED!) I’m sure she’s equally as generous throughout the year with other occasions (birthdays, showers, etc.)

So after hearing all this, where does the conversation go from there? I know my friend has some debt (student loans at a minimum, though I don’t know specifics about other consumer-related debts), and I want her to win with money! I wanted to tell her all about what I’ve been doing, to encourage her to examine her spending, make a budget, try to cut back, etc. etc. etc. Only…I didn’t feel comfortable to do so completely unsolicited.

I did mention that I’d been working really hard this last year to pay off debts by really trying to stick to a budget (hoping this would open the door for more questions), but the conversation just kind of ended there. She picked up with a different topic.

So what would you do? Do you talk to friends about money? Would you ever do so unsolicited, or simply wait to be asked? It feels like a weird topic (kind of like trying to push your religion on a friend), but I’ve just felt so thrilled with my progress this past year and I really WANT my friend to do well financially, too! Especially with their big income boost, they deserve some financial wins, you know? But it’s definitely still so taboo.

How do you feel about the topic?
Would you talk to your friend(s) about money? Would you try to encourage them to get on a budget, or just let them see how you live your life (with the hopes that one day they ask about your success)?


Planned November Budget

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This was another “meh” month with our income. We live on last month’s income and last month we only made a combined total of $5805 (after taxes). I added an extra $50 to our income (with money leftover from October’s budget), which leaves us with a total income of $5855 to work with.

I have to admit, when I sat down to make the budget for this month I was a little bummed.

In my “prototype” budget I had my car debt payment set at $3,000. Ha! We didn’t even break the $6,000 mark for income, so paying $3,000 to a single bill is not happening. We just literally don’t have enough. Instead, I had to lower my payment to only a mere $745. That’s it. I played and played with the numbers, trying to get my debt payments higher but I think that in lean months such as these, the #1 MOST important goal is this: Don’t add new debt!!! So instead of having my budget set up with overages in various categories, I had to lower my debt payments so as to keep things at- or under-budget. I’m still making larger than minimum payments, so I’m making progress. It just feels a little “blah” to pay so little in terms of the “extra” toward debt. I just have to remind myself that every bit helps! Relentless forward progress!!! (<<<a favorite running saying that I think applies here, too)

Here’s our planned November budget:

Place Planned Budget
Rent 1055
Electricity 170
Water 60
Natural gas 20
Sprint (2 lines) 115
Cable/Internet 100
Car Insurance 56
Health Insurance 350
Trash 35
Debt 1498
Miscellaneous 300
Groceries 400
Baby Purchases 1100
Gasoline 100
Saving for Irregular Expenses 495
Total Budgeted 5854

 

I owe you all a full debt update (maybe next week? Those take me the longest to prepare), but here’s a little breakdown of what’s being paid toward each debt:

  • Medical Bill 1 = $25
  • Medical Bill 2 = $50
  • Medical Bill 3 = $75
  • License Fees = $250
  • Car Payment = $745
  • Student Loan 1 = $77
  • Student Loan 2 = $260
  • Student Loan 3 = $16

Total Debt Payment = $1498

 

Now I’ve got some questions for you all regarding my savings.

First, to give you some background, when I first started blogging here (back in March 2014), I had slashed my savings way down to $190/month. Then, slowly, across the course of the past 9 months my savings have crept back up. I realized my semi-annual savings were too low (I’d forgotten about some of my semi-annual payments, and I added a new one – our renter’s insurance); I also increased the amount saved toward several categories (car maintenance, dental/vision, vet care) in response to the fact that we have upcoming needs in these areas and I felt it would be prudent to plan for those in advance rather than being surprised by the big bills when they pop up.

So what started as only $190 in monthly savings has slowly crept up to $495 in monthly savings.

On the whole, I feel good about my savings categories. I feel like this is money we will certainly need for expenses in the future and instead of not having a plan for how to pay for them, we’ll have money already set aside.

That being said, this is a very lean month. December will probably be quite lean as well. Plus, I have some potentially large expenses coming up. I’ll need to have money set aside to buy a couple nice interview outfits and some travel expenses for the month of December.

With all of this being said, what do you all think about me setting aside my “savings” money for these other purposes? I could split it roughly in half, putting $250 toward planned December travel expenses (which should cover about half the total expenses – see here), and $245 toward funds to-be-used on a nice interview outfit or two (I have to admit I have NO IDEA how much I’ll need for my interview clothes).

For reference sake, here’s how I currently have my savings categorized:

  • Semi-Annual Bills = $100
  • Car Maintenance = $100
  • Dental/Vision/Health = $125
  • Travel/Christmas = $25
  • 3-6 Months Expenses = $25
  • Dog/Vet Care = $10
  • Girls’ Birthday Savings = $10
  • Roth IRA = $100

I know it’s a slippery slope to stop contributing to these savings permanently (i.e., I KNOW the semi-annual bills are going to happen, so it’s unwise not to prepare for them), but do you think it would be prudent to stop the contributions for a single month so I can use this money toward these other things (i.e., interview clothes and travel expenses)? If not, from where should I draw this money? Contribute less toward debt payments? Try to sell more things? Something else?

I appreciate any and all tips or suggestions. Thanks!


October Budget Update

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Hi friends! Happy Monday!

Before we dive into the budget update from October, I wanted to share a picture of the famed wedding cake (discussed here) which I spent 9 hours of my life working on! Pretty impressive, right??

IMG_4946 IMG_4947

The skull bride and groom, as a fun nod to the fact that they married on Halloween. The bride bought the flowers pre-made from a baker (they’re made from sugar) and the cake is 100% us! She did each tier with a  different filling. The bottom was raspberry, the middle was lemon, and the top was coconut. The icing was a homemade vanilla and all was decorated with freshly shaved coconut. I can’t take much credit because the recipe and directions were all the bride’s. I simply helped where I could. Fun girl-bonding activity!

Now, onto the budget….

For your reference, here’s where I wrote about my planned October budget.

And, below, here’s what we actually spent compared to the planned budget:

Place Planned Budget Actual Spent
Rent 1055 1055
Electricity 241 241
Water 65 63
Natural gas 17 17
Sprint (2 lines) 114 114
Cable/Internet 100 100
Car Insurance 55 56
Health Insurance 350 350
Trash 35 35
Debt 1843 1752
Miscellaneous 300 412
Groceries 400 408
Baby Purchases 1200 1149
Gasoline 125 113
Saving for Irregular Expenses 495 495
Total Budgeted 6395 6360

 

Some things to note:

I had to make a lower debt payment to accommodate the overage in my miscellaneous spending. As a reminder, miscellaneous is broken down into 4 categories:

  • Entertainment: budgeted = $20; spent = $20
  • Eating out: budgeted = $100; spent = $109
  • Personal maintenance: budgeted = $30; spent = $0
  • Other: budgeted = $150; spent $283

 

My overage was mostly due to wedding-related items and, admittedly, a boss’s day gift I never mentioned here. A small minority was spent on necessities ($23 for new checks and $28 for cleaning supplies). The rest was split between some flowers I sent to my incredible boss at University A (the university where I teach online), a wedding gift, and other wedding “supplies” (I bought stuff for mimosas for the girls to enjoy pre-wedding, and I ended up footing the bill for some sandwiches pre-wedding as well).

I could have saved 50 bucks by not sending my boss flowers. During these lean times, that’s probably what I should have done. But I am really so incredibly grateful to my boss for connecting me with this position and I feel like I’ve really been blessed through this employment situation. It felt like a small token of my appreciation and one that I was happy to give. I guess the whole “gift-giving” thing opens up a can of worms. Throughout my debt reduction journey thus far I’ve been really good with scaling WAY back on the amount of giving I’ve done (and the dollar amount I would spend per gift) and I just didn’t hold back on this one. I’m conflicted because – on one hand I know I can’t afford $50 for flowers. On the other hand, it felt like an appropriate gift at the time and a small portion of my monthly salary. Plus I just got a raise. These are all justifications, I know, but I’m just trying to dig myself out of a hole a bit.

There’s really no other category of spending that is out of line with the original budget, so nothing more to comment on.

You’ll notice that I only ended up spending $6360, which leaves me with some surplus (Note: Remember that although I had only budgeted for $6395, I actually had $6410 to spend for the month – see here).

Since we live on last month’s income and we had $6410 for the month, I was left with an extra $50.

Rather than putting that extra $50 toward an additional debt payment at the end of the month, I decided to add it to our income to increase the amount we have to work with in November (foreshadowing……the $50 is going to be NEEDED for next month! Welp!). I’ll be back later with more on our planned November budget.

And one last parting photo of me and my girls at the family reception that was held on Saturday

IMG_4954In case anyone is curious, the girls’ dresses were a gift from their aunt and the clothes I wore (both for the wedding on Friday and the family reception on Saturday) were dresses that I’d already owned. Didn’t buy a single article of clothing for the event!

 


Knowledge versus Behavior

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When I was an undergraduate, I remember taking a workshop on conservation education. Basically, the purpose was to teach people about conservation of natural resources: its importance, how to practice it, and how to spread it to others. One thing I remember learning in the workshop was in regard to recycling. Research has shown that you can teach people all about the impact that recycling can make and, after education, these people will express that they highly value recycling. BUT, if you actually observe these people, do their recycling habits (or lack thereof) actually change?

The answer is NO….usually.

Basically, studies have found that unless recycling is made EASY, that most people will continue to simply trash things. If, however, there is a recycling bin placed directly next to a trash bin, then they will indeed opt to recycle. But if the recycling bin is across campus they won’t make the effort to recycle their bottled water or old newspaper. They’ll simply chuck it in the trash. It’s easier.

I give this little anecdote to demonstrate that changing someone’s knowledge (by teaching them something new) does NOT equate to a change in behavior. The behavior is harder to modify. It has to be made easy.

Unfortunately, I have succumbed to the knowledge versus behavior problem this past month. Since starting blogging, I have learned quite a bit about my spending habits. I have worked diligently to change them. For the most part I have succeeded. But in the month of September??? Not so much.

I’ve already told you all about how I went way over budget with our grocery purchases. Why is this?

Well, I leaned back on grocery shopping like the crutch it’s always been. I have historically used grocery shopping as an easy “outing” with the girls. I feel like I’m being productive by buying things that we “need” and, at the same time, I’m getting the girls out of the house for a bit and using the time to serve as a distraction or you could even call it entertainment. I prefer to go to parks and have been making more park trips in the mornings, but its still dreadfully hot in the afternoons here in Tucson and the afternoons drag on and on and on.

The problem, of course, is that this means we end up buying all types of things that we don’t really need or things we could make do without. Then we wind up at the end of the month and I realize our grocery budget is beyond shot – it’s been blown out of the water!

So this broken record is probably getting a little old at this point, but something’s gotta change. I’ll brace myself for your groans and eye-rolls but here I go…..

…I’m going back to the envelope system.

Oh, the envelope system. My much loathed system of paying for goods.

Here’s what I’m going to change for the month of October: instead of actual paper envelopes for all my different spending categories, I’m going to focus solely on groceries and eating out. My other categories, including entertainment ($20 budgeted), personal maintenance ($30 budgeted), and other ($150 budgeted) have not been as big of a problem – I’ve never gone over in entertainment or personal maintenance since I started blogging!! And in the past it made me feel uncomfortable to carry so much cash. BUT, my wallet actually has 2 separate money tabs. I’m going to designate one as being for groceries and the other for eating out. This way I won’t be carrying paper envelopes, I’ll always have my money with me (instead of accidentally leaving an envelope at home), and I’ll be limiting my cash-on-hand to only 2 categories instead of 5.

Oh yes, this is happening. A modified envelope system is back! I’ll let you know how it goes.

Pssst:  I’m spending the weekend hanging with my family who is in town visiting! I’ll be back Monday with a full budget update from the month of September.

PS: Thanks to the reader whom, in my old money envelope posts, had given me this idea by saying that she simply used a regular wallet and labeled the tabs for different categories.

 


Money Envelope Update

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First I’d like to say happy Memorial Day to all! I hope you have an opportunity to spend the day with your loved ones! Thank you to all who have served, are serving, or are spouses/family of Service Members. I don’t know how you do what you do, but I am so thankful you find a way!

Remember how I decided to do a “Money Envelope May” challenge? I had intended to do an update post mid-month with how it was going, but time got away from me (or I had more pressing things to blog about), so now that the month is nearly over I decided I’d just do a wrap-up with how it all went and my impressions.

I started the month with 5 money envelopes:

  • Groceries = $380
  • Entertainment = $20
  • Eating Out = $75
  • Personal Maintenance = $20
  • Other = $125

I was not thrilled about the idea of money envelopes. When I first wrote about it, I talked about how I thought they are bulky, annoying, and just a big hassle. Now that I’m about a month deep in using them I’ve given my personal pros and cons below:

 

CONS

  • I still find them to be bulky. I am used to either NOT carrying a purse (just throwing wallet and phone into the diaper bag), or carrying a tiny purse (I have too much baby stuff to carry for me to deal with wrangling a big purse). When I started Money Envelope May I had to bust an old (larger-sized) purse out of my closet because the envelopes simply wouldn’t fit into my smaller purse. How men (or women who do not carry purses) do a money envelope system????? I have no idea.
  • You have to be very careful with balancing your envelope (like balancing a checkbook). I have never been great about this, which is why I LOVE debit cards. I know I have roughly “X” amount in my account so I can go to the store and not worry about the exact amount because I know I can always look it up later online. Not so much with a cash-only system. I thought I was diligently “balancing my envelope” (I don’t know what else to call this – but basically I was tracking my spending and how much money is leftover on the outside of my envelope….writing straight on the envelope)….but somehow I must have messed up. The only envelope that gave me a problem was “groceries.” Last week I noticed that I must have forgotten to write down a purchase because my envelope said I should have $105, and instead there was only $88 inside. I racked my brain and could not for the life of me remember where else I’d made a purchase. I know it must have been my mistake (not me misplacing money or something), but its still annoying to feel like I just “lost” $17.
  • I worry about the money getting lost/stolen. This was particularly tough the first couple days, as the envelopes feel very awkward and bulky. I was SURE I would drop an envelope full of cash or someone would reach inside my giant purse and steal it without me even realizing. I also had random fears that someone would see my cash-laden envelopes and try to rob me in a parking lot while walking out of a store. I feel much more protection with a piece of plastic because if it gets lost or stolen I can simply call the bank, have a hold placed, and get a new card issued. There’s a sense of security to it all that I lack with cold hard cash.
  • Annoying for online purchases. I wrote a post about how I got a “free” (paid $2.99 for shipping) beauty box last week. That $3 came out of my “personal maintenance” envelope….but I had to pay for it online. The way I handled any such purchases (e.g., I also paid for a couple itunes songs), was to remove the money from my envelope and put it in my wallet. Since I wasn’t using my wallet for spending, the money was basically stored safely there and when I got around to it I would deposit it back into the bank. It’s a little bit of shuffling, but not too bad.

PROS

  • Useful for storing receipts and coupons. Clearly I still had a problem with my “grocery” envelope, but I wasn’t storing receipts at the time (though I’ve started since then). But one thing I really liked the envelopes for was storing coupons!!! I’m not a big couponer, but I do clip the occasional coupon. There is nothing more annoying than going to the store, wanting “X” product, and realizing I have left my coupon at home. Argh!!! Or how about actually getting the coupon, shoving in purse, and somehow having it lost or forgotten about by the time I’m checking out (this has literally happened multiple times). Now when I make a grocery list, I see if there are any coupons I want to use and tuck them safely inside my money envelope. It’s ideal because then the coupons are stored safely together instead of getting crumpled, torn, or accidentally tossed out. And they’re right next to my cash so I don’t forget to use them when I’m checking out (The Worst!)
  • They curbed my spending. They really did help me cut back on my spending! I was surprised because I really wasn’t expecting for there to be that much of a difference, but simply being very cognizant about my spending and where my money was going helped me to cling to it a little tighter. Times when I might have been tempted to throw that extra item into my cart, or to grab an afternoon “happy hour” soda from Sonic, I was able to resist because I knew I was trying to spend less. And it worked. Isn’t this their primary purpose?

Sooo, I guess I have a lot more “cons” than “pros.” I hadn’t intended it to be that way, but this is my honest opinion. Even in spite of the plethora of cons, the money envelope system WORKED for me! Because of that one simple fact, I think I’m going to keep the money envelopes around for another month. I still prefer plastic over cash, but I think I need to get a couple months of cash-only spending under my belt before I revert back. Clearly they helped me curb my spending and that has been my goal, so there’s nothing bad I can say about that!

 

Have you ever tried a money envelope system? Want to join me for Money Envelope June (not quite as catchy as Money Envelope May, lol)?


Debt is like the last 10 pounds

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This may come as a surprise but…

I’ve been debt free before.

There was a moment, for about 3 days, in college when I had no debt. My car was paid off, my credit card had no balance, and I didn’t have a mortgage.

Then, I came close again after we closed on our house. We had been saving for a year and the money returned to us from escrow was used to pay off my husband’s credit line.

That credit card debt freedom lasted a few weeks before we decided to remodel our master bathroom and take a trip to Hawaii.

My finances are like a yo-yo diet. Sure I’d love to eat healthy all the time but rolled tacos with Mexican guacamole? I can’t resist.

Just like weight loss, a diet is silly. The only real option for permanent results is a lifestyle change. Staying thin requires eating less than or equal to what you need – staying financially healthy means spending less than you make. Sure it looks easy on paper, but only those who have suffered through it (and continue to suffer through it daily) know how hard the struggle can be.

This is the longest I’ve been on a financial diet – and I know I’ve got what it takes to keep the ‘weight’ off.

Yeah, the change is lame – but the results… those are what I’m grinning at each month when the credit card statement arrives.

One day… it will say…

$0

Which is harder for you: Losing weight? or losing debt?