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Posts tagged with: Budget

Need to grow a back bone!

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Everyone now knows how we’re trying to cut back on eating out (we went over budget in this category last month – budgeted $75 but spent $110). So when a friend suggested we meet for lunch, I told her I was trying to cut back eating-out and we decided to go to the mall instead. She had something she needed to buy and I am absolutely fine with window-shopping (shopping is not a weakness of mine).

So we walked around chatting and catching up a little and one of the stores she wanted to go to was Express. When we got there, she pulled 2 coupons out of her purse for a free $15 (no minimum purchase, but non-sale items only). She handed one to me and said to use it because it was a free $15 that would go to waste. I said, “no thanks” but she insisted.

I wanted to find something less than $15 because I could just get it for free (the coupon allowed this). So I’m walking around the store and looking at price tags and everything is WAY more than $15. I guess it’s been awhile since I’ve been but everything just seemed so much more expensive than I remember!?! Shirts and tanks were way more than $15 and even all the costume jewelry was too expensive (I’m talking, $30+). There was literally not a single non-sale item in the store for $15 or less. So finally I find a pair of tights that cost $20 (I would get $15 off and still have to pay an additional $5).

I’m standing in line thinking how I don’t want to spend this money, and I don’t care about the stupid tights, and how did I get in this situation? I’m thinking about how annoying its going to be when I have to come back to the mall and return these tights because – for some reason – I suddenly have no backbone and can’t just put the tights down and say, “NO!”

And we get to the cash register. And it turns out the tights were on-sale so the coupon couldn’t be used.

I was SOOOO thankful because it gave me the excuse to just walk away! I turned to my friend, handed back the coupon, and said I hadn’t even really cared about the tights anyway.

How ridiculous is this? I was literally planning out when I would have time to come back to the mall to return these tights while I was standing in line waiting to buy them!!! What’s wrong with me!!!


Ashley’s April Debt Update

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I’ve seen lots of comments (on all the bloggers) asking for more openness and transparency. Hopefully this post provides you with that (but, as a result, its a long one so maybe get a quick snack ready!):

April Debt Amounts and Payments

 Place APR March End Balance April End Balance Monthly Payment
Capital One CC 17.9% $0 $0 $0
Wells Fargo CC 13.65% $7429 $5705 $800
Bank of America CC 7.24% $2198 $2175 $35
Carmax Car Loan 7.75% $23736 $23385 $470
License Fees 2.7% $5720 $5672 $55
Mattress Firm 0% until Sept 1st $1281 $181 $100
Medical Bills 0% $8328 $8228 $75
Total $48692 $45346 $1535

 (See the starting balances from when I first started blogging here) A couple notes: Remember that I’m also paying low monthly payments toward my student loans (not in table, but can be seen here. Amounts to $87/month), so our monthly debt payment actually amounts to $1622 (not $1535). Additionally, we made 2 big snowflake payments at the beginning of the month (with extra money from last month since we had a higher income than normal – discussed here). We paid $2,000 in snowflake payments ($1,000 each toward Mattress Firm and Wells Fargo), for a total of just over $3500 toward debt in the month of April!!! (that’s the $1622 “regular” payments + $2,000 in snowflake payments).

April turned out to be another good month financially. Our take-home pay after taxes was $8290. I just want to say that these really good months are NOT “normal” for us. Our annual average is right at about $5,000/month so this was one of our best months….ever! We’re going to talk about what to do with the surplus and will update with our May Debt Update (since the snowflake payments won’t occur until during the month of May). Right now, I’m thinking 2/3 or 3/4 will probably go straight toward debt (paying off Mattress Firm and the rest to Wells Fargo), and the other 1/3 (or 1/4) will go toward making a debt-sinking fund. This is something Adam and Emily did and a commenter suggested it, too. The reason is that summer is Chris’ “busy” time at work and I worry about what happens when winter rolls around and we start having more “lean” months again. The idea is that we keep some money in a savings account but once it reaches a certain dollar amount, I make a big snowflake payment. In hypotheticals, I could save a portion of our income until we get to $5,000 then take half ($2500) and put toward debt, then save back up again and repeat. That way we always have some extra cash on hand in case Chris’ business has a slow month, but if things continue going well we can siphon some off and put toward debt, instead. I will update (in the May Debt Update) with exactly how this surplus was handled. I hope this isn’t confusing. Basically, anything “left over” after paying our basic bills has been used as 1-time “snowflake” payments toward debt, but it doesn’t get applied until the following month (since our income is variable, we wait until the month is completely over to assess how much “left over” we have, so our snowflake payments are always a month behind the pay, if that makes sense). Now, onto the budget:

How We Fared in April

We ended up coming in at- or under-budget in all categories except one.

Category Budgeted Actual Spending
Rent 1055 1055
Electricity 100 62
Water Bill 75 53
Gas bill 75 25
Sprint (2 phones) 150 150*
Cable/Internet 85 85
Car Insurance 90 90
Health Insurance 350 350
Waste Management (trash) 35 35
Debt Payments 1500 1622**
Groceries 400 398
Baby Purchases 600 566
Gasoline 100 57
Miscellaneous 250 355
Savings for Irregular Bills 190 190
Total 5055 5093

*Remember, I got a deal on our phones, but I won’t see the savings until our next bill.

**This was our “normal” debt payments (minimums for everything except Wells Fargo bill), but does not include large 1-time snowflake payments (because those were paid using leftover funds from March)

Quick re-cap:  In April we made $8290 – $5093 = a surplus for the month of $3197

As you can see, we barely slid in under budget with groceries, and I want to try to reduce this category so I’ll have to pay close attention to figure out why we’re barely making budget ($400/month). I’ve switched to making so much homemade (bread, bagels, tortillas) and DIY (cleaning spray, baby wipes) that I feel like we should be spending less on groceries, but for some reason we’re not. I’m going to examine this closely during May and figure out WHY. Soooo, the one category where we went over-budget: “miscellaneous.” I budgeted $250/month (down from $350 last month) for this category and broke it down into 4 sub-categories:

Category Budgeted Actual Spending
Entertainment $20 $19
Eating Out $75 $110
Personal Maintenance $30 $7
Other $125 $219
Total $250 $355

Clearly we went way over budget (by more than $100!), with the culprits being “eating out” and “other.” I think some of this was growing pains. I just slashed the budget in this category by almost a third, and you can see that our spending was definitely in-line with our “old” budget(<<link to old budget).

I’ll admit it – I hate the envelope system. I don’t know why (bulky? annoying? inconvenient?). But I have to admit, I think it may help with this situation. If I look in my envelope for “eating out” and there’s only $5, I can’t say “screw it, order a pizza” when I’m exhausted and don’t want to cook (confession: that happened once last month). Instead, I’ll suck it up and make dinner. If for whatever reason I really can’t handle it then we’ll eat PB&Js and live another day. It’s a mindset-change from what I’m used to but it needs to be done.

So….May = Month of the Money Envelopes I’ll let you know how it goes.

Envelopes:

  • Groceries = $380 (trying to cut it by $20, down from $400)
  • Entertainment = $20
  • Eating Out = $75
  • Personal Maintenance = $20 (trying to cut it by $10, down from $30)
  • Other = $125

Have you tried the envelope system? If so, did it work for you? What other system(s) do you have in-place to curb over-spending? Given our current debts and APRs, (and also knowing our variable income and wish to do a debt-sinking fund) how would you appropriate the surplus $3200 from April?