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I Spent More Than I Made in January


I’ve been listening to your comments about including my total debt payments in my monthly income and expense report and I have figured out a way to do it in Quicken! I tend to take care of my finances just like a business would, but this new way of reporting will probably give you a better idea of the money in – money out for us. Please let me know if you like it.

So here is January’s spending. My comments are below.

Income: This includes all money coming into our household and includes gifts and prizes won (like gift certificates). The income for January is low because my one paycheck that I would normally receive in January was received in December.

Automobile: We paid for registration in January. My husband is officially in his thirties now and I’m still holding onto my twenties for a little while longer πŸ™‚

Cigarettes: No, I’m still not happy about this expense and my nicotine patches are still staring at me every time I roll a cigarette.

Food: I used to have two separate categories for food. One for dining and one for groceries. I moved things around and created one Food category with two sub-categories. That way I can see total spending.

I’m pleased with the dining spent for January. It’s not real low, but lower than it has been. As for the groceries, they are a little high. After my husband lost his job, we went to Walmart and bought over $100 in pantry-ish groceries. Essentially, we were stocking up on things in case money gets really tight in the future. These things are normally not on sale, so Walmart has the best prices.

Holiday: The spending here is from after-Christmas sales. I bought some wrapping paper and we also bought a new Christmas tree for $35 (75% off sale). Our previous artificial tree was purchased at a garage sale for $10 and it was starting to fall apart. We’ve had it many years, and it was time to retire it.

Household: The timing wasn’t too good on our household spending. We found two L-shaped desks with hutches at the local department store on clearance for $112.50/each. We had been watching them for a while and decided to get them. A few days later is when we found out about my husband losing his job. We really needed actual desks, though. My computer desk was an old vanity I purchased at a garage sale for $20. My husband’s computer desk was an old armoire that we cut apart and made a desk out of. Since getting my new desk, the back problems I had been having have gone away, so the desks were a good purchase.

Total Income/Expenses

Technically, it’s a big ole negative here and we spent more than we earned. But the negative is due to the extra payments sent towards our credit cards. I do, however, want to see a positive here in future months and probably will be able to do so because I will be back to receiving two paychecks/month. We are still working hard to reduce our expenses overall, and I am hoping that shows in February.

And some good news, the temporary job that my husband obtained after losing the job may end up being a little less temporary. They might be able to use him for longer than we thought and it seems like they are really impressed with his work. So, for all of you that said that things happen for a reason…I believe you’re right! πŸ™‚


  • Reply AnnS |

    Came across this website from the NYT.

    Household $386???? Can’t recall cleaning products, paper towels and light bulbs costing that much. Looks like this is where you slide non-essential expenditures and conceal them by calling them “household”. Most household costs (unless there was a major repair to a furnace) are around $30-50 a month. Even taking off the desks, that is still $162 a month, an unfathomable amount.
    The desks were a ‘need’ but an excessively indulged ‘need.’ Go to a furniture consignment shop. There are a lot around. Some are high in prices but many are low. My husband’s imitation Queen Anne computer desk was $20 – looks like Cherry and is 2 1/2 by 5 and is a lovely piece. Stop shopping in retail stores. Check Ebay in your area for furniture and hit the little consignment shops in the country. (There are 2 great sources within 20 minutes of me here in northern MI.)
    Indulging in the desks without looking hard in consignment shops was giving in to a ‘want’ – the ‘want’ being those specific desks as opposed to shopping harder and in other places. More to the point, you ‘needed’ a decent space since that is your work – his was a ‘want.’ “Wants” get deferred until you have saved up the money in a RYO tobacco can.

    Groceries $ 487.61???? Food Stamps allow about $125-150 per person so how many are you feeding? A 4 year old doesn’t eat anywhere near as much as an adult. Get it down to $270 -350. No chips, no snacks, no candy, no pop, no beer,…..buy Crystal Light and make up pitchers of stuff to drink besides milk (and some varieties have Vitamin C added). Buy generic. Stop eating meat all the time. Nothing from the frozen section except veggies – no more prepackaged anything. Make up casseroles instead. Use more grain & veggie casseroles (go to the library and checkout the first Moosewood Cookbook that was published and Recipes For A Small Planet – great info about complete proteins from grains and dairy)…

    Dining out $80.46 – knock off so much eating out. That is 3-4 meals for burgers at a local restaurant for two people. 1 time a month for a treat IF you have all the bills paid or the money set aside.

    $386 —- $75 Save $311
    $487.61 — $310 Save $157.61
    $80.46 —- $26.82 Save $53.46

    TOTAL SAVED $522.25

    Do I have the right to nitpick? Most would say yes. We run a household in a far, far more expensive part of the state on less the 3/4s of the money you spend, have ZERO debt for anything and I still dress in Brooks Brothers and clothes from Ireland.

    By the way, two ways to reduce some of you utilities are to bite the bullet and get:

    (1) a tankless gas water heater. Saves 50% over regular gas water heaters and upwards of 67% over electric. Go to EBAY – do NOT buy retail. You can find New In Box there from reputable sellers. Aquastar by Bosch, Paloma, Takagai (or something like that). Expect to pay $300-700 depending upon the size of the unit

    (2) Clothes processor instead of a washer/dryer. They wash and dry in one machine. Ebay again – look for Equator’s listings and buy a scratch n’ dent model from them which comes with a warranty. It is $500 or so delivered to your door. They use 1/4 the water and less than $5 in electric a month. Super super efficent.

  • Reply Tricia |

    AnnS – thank you for commenting and taking the time to write a very detailed comment.

    With the way I keep track of household expenses, I like to have everything “home-related” under Household. It is my main category and then I have sub-categories. I took a screenshot of my Quicken report and I posted it here. It’s interesting that you mentioned light bulbs because we just bought three packages of CFL lightbulbs so we can save on electricity πŸ˜‰

    I do want to say that I don’t try to conceal things there. I’ve asked readers before if they wanted to see the detail (because I keep it quite detailed) and they prefered a lump category. You have a good point, and I think from this point forward I will add a screenshot of only the household category and post it after my main report. I do lump a lot in there.

    As for a furniture, I did find a nice desk at Goodwill not too long ago. The only problem is that with our small car we couldn’t get it home. With furniture in a box type products, we can get it home by taking things out of the box and squeezing it in our car. At the moment, none of our friends have working trucks or we’d ask for help hauling things. At some point we’d love to get a truck so we can take advantage of many of the things we see (not to mention things on the side of the road for free), but we paid off our car last year and I want to keep away from a car loan for as long as we can.

    For groceries, we are two adults and a five year old. Yes, January is very high and we are definitely trying to get our grocery spending down. So far for this month we have spent $199 and we have plenty of food in the house. I think we will spend less than $300 for February.

    Our problem with groceries is the convenience foods. It’s so much quicker than making up meals. But, I have started making some meals the night before (like casseroles) and that is helping. We are getting better food and the next day all my husband has to do is pop it in the oven. As my son says, “Easy cheezy.” πŸ™‚

    Our dining for January is strictly fast food. The $80 was for 6 visits for our family of 3. Again, convenience plays a big factor here. Running short on time? Go through the drive-thru at Burger King. We will be trimming it down bigtime.

    As for your situation, that’s great that you have zero debt. We have learned a valuable lesson and I believe we are on the right track to really turn things around and save for the future.

    I have seen those tankless water heaters and I would like to get one. Probably not for this house, though. I’m not sure how long we will live here, but it probably will not be more than 5 years. I’ve never heard of a clothes processor. We received a gift from my in-laws of a front end loading washer and dryer and they are less than two years old. I’m pretty sure the washer is very efficient. It’s the electric dryer that is killing us. We are hang drying a lot of clothes now to try to minimize its use in the winter.

    Thanks again AnnS for your comment. I took a closer look at many things and you gave some good advice. I appreciate it πŸ™‚

  • Reply Kristina |


    First, congratulations on your hard work and dedication to get out of debt. America would be a happier place if others followed your lead. I’d like to offer some advice that I hope you find useful:

    Getting and staying out of debt needs to be a lifetime decision and commitment – a conscious choice to never live beyond your means, NO MATTER WHAT. A decision to always paying cash and always saving money. I am concerned that in the last comment you said you are trying to “keep away from a car loan for as long as we can.” Please consider never getting a car loan. If you eventually want another car, save up and pay cash for a used one. Then you can save up more, sell the one you bought, and buy a nicer used car. Even if you become wealthy, still consider buying a 1-2 year old car. New cars depreciate an insane amount the second you take them off the lot.

    While your get-out-of-debt plan is admirable, I suggest you consider doing it even faster. Plug your nose, go crazy, seem insane to your friends, and get out of debt in a year or less. Both you and your husband should take as many extra jobs as you can – house cleaning, UPS, pizza delivery, lawn mowing, etc. Don’t buy a single thing that is not a NEED until you are out of debt (including desks that you have done a poor job of justifying). Don’t go on vacations. Don’t eat out. I know this sounds terrible, but my experience has been that it’s better not to drag things out that aren’t fun. And the sooner you are out of debt, the sooner you can insert more FUN in your life (with cash). The sooner you get out of debt, the sooner you can have a life and begin to save for things like vacation, retirement and college for your child. I promise: the more you delay pleasure now, the better off you’ll be later!

    I suggest you stop worrying about your credit score. The only reason one needs a credit score is to go into debt. Credit scores are calculated based on being in debt. People who don’t borrow money – even if they are millionaires – have a credit score of zero. It’s a crazy system. So, get out of debt, stay out of debt, and don’t plan your life around your credit score. Getting a home mortgage is the only reasonable thing I can think of where one might need a credit score, and in that case your score won’t matter if you go to a lender that does manual underwriting.

    Best wishes to you!

  • Reply Lydia |

    I also came across this site from an article in today’s New York Times. I agree with some of the others above. Household – $368.73? Wow. Dining and Groceries is too high as well. While AnnS suggests you can save $522.25 and use toward debt reduction, you can get start a savings nestegg by cancelling Cable and Internet. You don’t need them to live–need being the operative word here. You can get started with only $50 a month on Etrade. Best of luck!

  • Reply Penny Pinching Jim |

    I’m also checking up based on reading the NYT. You’re a genius…some people pay thousands to financial advisers for this type of advice!

    I think I read in one of your other posts that you are expecting a refund from the IRS of about $1,300. I assume you are aware you can change (lower) your paycheck deductions so that you don’t actually get money back, and pay only what you need. Even better, you might need to pay the IRS in April, meaning they have essentially provided an interest free loan. Most people I know who get money back from the IRS say its “forced savings”. I think this is an OK strategy IF you don’t have the willpower to save on your own and IF you don’t have any other debt. However, since you are paying over 1/3 of your expenses in interest, it would make more sense to reduce your deductions and use the extra cash to pay down your debt. Here’s why…

    The IRS isn’t paying you any interest to keep you hard earned money for up to a year. Meanwhile, you are paying the credit card companies (I would guess) anywhere from 8% to 15% in interest charges. So, borrow from the IRS (actually, its your own money) and pay down the debt.

  • Reply Tryin' to owe "0" 2 |

    I understand you buying the desks…if you needed them, and you’ve had your eye on them for awhile, AND they go on sale at a bargain price, it certainly might be worth it. Yes, it sets you back a little – yes, you could’ve gotten something for $20 at the Salvation Army if you could’ve found someone to deliver it for you. But these are investments, and sounded like they suited your needs exactly. No need to pay money, however little, for something you don’t like or that doesn’t work well for you – THAT would be money wasted!

    Get what you want the first time, as long as it isn’t unreasonable ($112.50 ea., as opposed to $1,000 designer desks). My husband and I are also trying to eliminate CC debt so we can refinance our house at the best rate possible in a few months, right before the loan kicks into an ARM. (I’m shocked your mortgage/rent is so low!) A couple of months ago we had to buy a new computer desk that would be more efficient with the limited space we have. We looked and looked, and found “the perfect one” on sale for approx. $50. Yes, that was $50 that could’ve gone towards CC debt, but the value it has added to my work space makes it so worth it.

    On the other hand, if we “splurge” on fast food, I try to tell my husband that we can save money if he doesn’t get the cheese on the Krystal burgers, or if he doesn’t get the fries and the coke…we can drink water. However, you can’t always totally deprive yourself while on this long journey to debt recovery – small treats along the way (like getting orange juice at the grocery in addition to the water) will keep your spirits up while you are witholding larger treats like the flat panel TV that is calling your name.

    Good luck in your efforts! πŸ™‚

  • Reply Tryin' to owe "0" 2 |

    Oh yes, and regarding Kristina’s comment about not ever getting another car loan – save cash first, then buy it…well, that’s a great idea, but not always practical. If you suddenly lose your car in an accident, or it develops terminal problems that cost more to repair than it would be to get a new (used) car, then it’s not an option to wait until you save enough money to buy one. Even if you somehow had $2,000 just lying around in cash, if you bought a car for that amount, chances are you’d be buying a money pit, and would be better off getting a car loan for a $7,000 – $10,000 vehicle with some kind of warranty from a dealership. Then, in months of windfall, you could make double payments and save on some interest charges that way.

  • Reply Nancy |

    Wow. After reading this and the comments I can’t imagine living on that. We live in California in an expensive area. (I suppose that is redundant) in the mountains over Silicon Valley, so no public transportation. We each spend about $45 a week on gas alone. Groceries, if I spend under $1000 that is cheap. We don’t go eat out, but we like to cook. That isn’t including about $300 a month for wine. And household for us includes garden supplies, paper and cleaning products and other household goods. I’m proud of you for keeping things so low.

  • Reply shannon |

    yes, wow! I can’t imagine living on that. I have no credit card debt (pay it off every month) but our mortgage on a 3 bedroom (we rent our 1 bed apt upstairs out for 620 a month) is $2200 – our portion is about $1600, but divided by two (no kids), that is still what two people on average would each pay separately (average $800 for 1 bedroom) in seattle on rent. We see this as a great investment, because we bought our house for $350,000 five years ago (first house) and now it is valued at over $600,000. Our monthly budget is $1000 for household, $1000 for personal spending like restaurants and clothes (I haven’t bought anything new for a year, it seems, and when I do, I shop at inexpensive places)…I guess it is all relative. In this city, we are very average, not rich. our water bill alone for the whole house is about 300; car gas (no car payment) 200 – …this is just so enlightening to see what people live on – In New York or San Francisco, you can’t touch a house for less than $700,000 and everything else is relative to that. SO interesting. Good for you for hanging in there! It is hard!

  • Reply jharp |

    Good luck with your weblog.

    Consider yourself lucky with the medical expenses.

    I pay about $1,000.00 per month with $2,500 deductibles per person. Wife + 2 children.

    The secret to life is to spend less than you make.

  • Reply mv |

    I’ve been reading your blog for about a month & although I don’t carry any debt (pay CC every month), I do find you provide a lot of ideas on how to save, which I get from your blog & several other ‘paying off debt’ blogs I’ve found after visiting yours.

    With regards to the desk purchase – although it sounds like you got a good deal on them, have you looked into http://www.craigslist.org? It’s a great place to get great deals on items. I don’t know where your from (looked but couldn’t find the info), as such, I don’t know how well represented your area is on craigslist, but here in the SF Bay Area (where it was started), there’s loads of deals to be had. I have bought & sold items on craigslist and the best buy so far was a big ol’ executive-style solid oak desk for $30.00, and the aluminum 16′ extension ladder I think I paid $20.00 (these are about $100 or more where I live). Family size gas dryer for $50.00 – nothing wrong with it, the folks who sold it happened to move to a house with electical hook-ups. I needed one with a gas hook-up – works like a charm. The desk alone would’ve been upwards of $500 dollars new, a new gas dryer would’ve been several hundred dollars as well – with just these 3 purchases I saved about $500 – $600.

    Where ever you live, if craigslist is well represented in your city or surrounding area, then definitely use it. Yes, some deals are not that great, some stuff is not that great, but some can be fixed up, and some are even free. And the best part is there is no fee for selling (like on ebay) or for purchasing.

  • Reply carembear |

    i know some people are against the desks that you bought, but i think it was a good purchase on your part. coming from someone who has had chronic lower back pain since middle school, i can understand the need to find the most comfortable chairs/desks/shoes. i carry a bookbag on the train to work instead of a purse, to minimize strain on my lower back.

    have you tried selling some stuff on ebay? i recently listed a bunch of my old books on half.com, too. even old textbooks can be worth a mint. my father (a former math professor) sold a 30-year old textbook on half.com for almost $80. don’t ask me why people buy 30 year old textbooks, but apparently some of them are now out-of-print and therefore valuable to the hard-core academics out there.

  • Reply Debt Hacker |

    Wow, your mortgage costs blew me away. I wish that was what I pay;-(

    Buying a house is what got us into debt. Bought it in Dec 04..the peak(I know…had stupid written all over me).

    I pay 2700$ towards mortgage!! Aaaaarrghhhh

So, what do you think ?