I’ve Paid For This Twice Already…

Archive for the ‘budget’ Category

It is finally spring here in the midwest, and although I am not counting out another cold snap coming through, we can go outside most days now to play, and spring fever is in the air.  I’ve been doing my traditional “switch over the season’s clothes” in my children’s closets, and I’ve found that they have both outgrown a vast amount of their clothing in the past few months, and there is some shopping on my horizon, unless I want to do laundry every single day or send them out half-clothed.  Since my kids are 2 and 4, this wasn’t a big surprise to me, but I’m still not going to run out to the closest department store and empty my wallet to fill their closets.  here are some of the things I do, year round, to make the seasonal clothing crunch less painful for all of us.

1.  Shop ahead a season.  This isn’t something you can do if you need the item right now, but you can still be shopping right now for next season.  Right now is when clothes for winter (and some spring) are being clearanced, so keep an eye on the clearance racks of your favorite stores and stock up for next year.  Part of my process this spring was taking out all the clothes I’d bought last year on clearance for spring and summer this year.  made the list of “must-haves” much shorter than it could have been.  I’ll be keeping my eyes peeled for winter PJs for my son for next year, something he’s in short supply of now.

2.  Make a list, as detailed as possible.  I have been guilty too many times in the past of buying something just because it was a bargain and I thought my kids would need it, only to find when I got home that i already had enough of whatever that item was.  So I make lists.  As I put the winter clothes away, I make lists of what is needed for next winter.  As I take the spring and summer clothes out and do an inventory, I make lists of what is missing.  We need a lot of socks, and my son needs 2-3 pais of jeans.  So I won’t buy him t-shirts (which he has plenty of) instead, I make a list.

3.  Orchestrate a trade with friends or family if possible.  Sometimes you know someone that has kids who are a little older or bigger than yous that you might be able to trade clothing with.  I have a friend who has kids the same age as mine, but the girl is the older one and the boy is the younger, so we’ve been able to trade a lot of her outgrown girl clothes for our outgrown boy clothes.  Subsequently, my daughter needs very little this year, if anything at all.  Except shoes.

4.  Hit up local consignment stores and other gently used options.  I am a huge fan of Goodwill for this, but it varies by locality and area.  If you have places that sell gently used clothing, check them out.  It might be overpriced, but you might find some bargains too.

5.  Plan out trips to yard sales carefully.  I love going to yard sales but with the hit and miss nature, the gas to drive to them, and the time spent, it isn’t always worth it.  When I decide to hit up the yard sales, I plan my yard sale trips to be when there are a number of them in a close location (we have neighborhood association yard sales here which work well) and in affluent yet child-friendly areas of our city where I’ll get the most bang for my buck.   I make an event out of it, and spend saturday morning walking about the neighborhood I’ve chosen browsing the goods.

6.  Clearance racks can still be your friend this season, too.  Some things get classified as a certain season but really, are multi-season.  My son needs jeans.  I can find jeans on clearance they were selling in the winter that will work just as well for spring and fall as well.

7.  Look for sales and other discounts.  Sometimes, you need things that you can’t easily get used.  Both my kids need socks.  Socks are not a frequent used find (because well, they get *used*, and not gently.)  So I watch the local department stores and shoe stores for clearance sales, seasonal sales, or just… sales.  I’ve been fortunate to get a lot of great socks for my kids at the price I’d pay for cheap offbrand socks (or less) by paying attention.

Adding to anyone’s wardrobe doesn’t have to break the bank.  I mostly shop for my kids, because my spouse and I don’t tend to grow as quickly , but I’ve used a number of these strategies to add to my husband’s work wardrobe as well.  With planning and perseverence, clothes shopping doesn’t have to break the bank.

Usually, it is Tell All Tuesday, but I had a dentist appointment yesterday morning that put me in a foul mood for the rest of the day, and I wasn’t feeling quite well on top of that.  So Tell All Wednesday it is!

Generally, the news is good.  Although we are not making progress at the rate we did in 2008, we are still making slow and steady progress at reducing our remaining non-mortgage debt.  I paid my $300 budgeted minimum payment to my student loan this week, which brings the overall balance to $9313.94 (which, since that is the last debt left, is also the amount of our remaining non-mortgage debt).  I also moved $500 into our savings account last week, which brings our emergency fund balance to $1500.  I have a little more than that available that I could put into savings, but we have a repair to one of our porch pillars we need to do next month so I’ve started budgeting extra money that comes in towards that.  I don’t want to pull money out of our emergency fund for something that I know is coming up, but if I put all our available money into savings, that is exactly what I will end up doing.  So it is just being budgeted separately and our porch won’t slide off its foundation this year.    We also owe about $500 in taxes that we’ll have to pay in April, so that is also being saved for separately and is affecting the amount I put into our emergency fund right now.  There is, as many people have observed in life, always something.

Our number one focus right now as far as finances is getting our emergency fund up to $2500. Our goal is to accomplish that by the end of April, which may or may not be doable depending on what else life throws at us in that time.  I’ve kind of come to a sort of peace with that, though.  I’ve been fighting and fighting in my head against the goals I’ve set up for us, and although I still believe in our goals and working to accomplish them, I’ve also realized that sometimes, life just keeps throwing things at you.  It has taught me a bit about being flexible and making decisions based on the big picture.  Our first goal, when I started this blog, was to have all of our non-mortgage debt paid off by December 2010, and even with our series of setbacks and uncertainty, we’re still well able to make that goal.  Obviously, in a perfect world I’d like to accomplish things sooner than that, but we’re taking it one step at a time right now.

I’ve been asked a number of times about our current payoff strategy with my student loan and why we continue to make $300 payments to it when the actual minimum amount due each month is around $145.  And the answer, honestly, is simple – motivation.  Paying double the minimum payment each month is much more motivating to me than paying just the minimum.  And with motivation, I become less discouraged even when we aren’t making the level of progress I’d like.  A lot of this entire debt elimination journey has been learning how to negotiate the balance between what makes the most sense strictly from a numbers standpoint, and what keeps us motivated to keep making progress and continue.  Sometimes those two things have been the same thing.  And sometimes, we’ve made adjustments to keep things going even when we’ve felt discouraged.  It is all a balance, and a learning experience, and to keep my own financial sanity, I make double minimum payments.  We could, of course, stop doing that if we needed to, but for now it is what makes the most overall sense for us.  Motivation.

Don’t let me get started on the financial ramifications of the dental appointment.  Let’s just say a few snowflakes will be flying towards the dentist office this spring as well.  But they did say that my flossing skills have greatly improved. 

Tracking your spending is a very simple yet complex process.  On the surface, it seems straightforward – keep track of everything that goes in and out of your household relating to money.  But because of the constant attention to detail that it requires, it can seem like an overwhelming task.

I have worked out a method that I use which works for me – but my method is not, by far, the only method.  I’m going to explain what I choose to do and why, but also look at some alternative scenarios that may fit your personality and lifestyle better.  The important thing is to find the method that works for you – no one method is better than another, some just work better for specific people than others.

There are some elements of tracking spending that are common to any system – a way/place to track the spending, an understanding of what types of spending you do (cash, debit, credit, or a combination), and a method to record these transactions, be it manually or automatically.   The simplest (but most labor intensive) way to track spending is to simply have a notebook or spreadsheet and record every transaction as you do it.  This is the system that appeals to me, however, I’ve made it a little more technologically efficient.  I do almost exclusively debit card transactions as far as spending goes, and I use a spreadsheet for a program called PearBudget as the place to record all my transactions.  I collect all my receipts into an envelope by my computer, and then a few times a week I record transactions manually into the spreadsheet.  The spreadsheet is organized by month and into categories I choose, and I record transactions into the appropriate column based on type.  The spreadsheet does all the math, and keeps track of the totals for each category I preset as well as what I set as my monthly budget for each category.  For me, this is a combined budgeting and tracking tool and it works well.    I’ve also written some tips and tricks I use to optimize this particular spreadsheet for my needs here.

If manually recording transactions is not for you, there are many different software options that will download your transactions for you.   This simplifies things because your “collection” and “recording” process of information is done for you by your bank and/or credit cards.  One of the ones I have tried and liked is Quicken, but there are many others (one of my friends swears by mint.com as simplifying and steamlining his whole financial life).  Once the program has your financial information (banks, credit cards, etc) it can download your transactions and in many cases tag them as to categories as well.  Then you just need to review information and add in any transactions that may not be downloaded (such as cash ones or checks written or received).

If you use cash almost exclusively or a large percentage of the time, automatically downloading transactions may not work for you and you may want to use a manual method.  Automatically downloading your transactions lends itself to a credit or debit situation, because your transactions are already digitally recorded.  I, however, choose to manually record transactions even though the vast majority of my transactions are from or to my bank account.  For me, manually entering receipts makes me more connected to what I spend.  I basically have to think about every purchase twice – when I make it, and then again when I record it.  this really hels me to keep my unnecessary spending in check, because I am doubly accountable.  However, not everyone needs that extra layer of accountability to themselves – as I said, it is what works for you.

Whatever your chosen method, tracking your spending is an ultimately rewarding process, as you learn what you spend and where, and what your choices about money say about your values.

There’s a credit card commercial playing on TV here that’s point is to get you to use their credit card as a budgeting tool by asking a question:  how much did you spend on coffee today, and then how much did you spend on coffee this year.  It assumes that you may know the answer to the first part, but probably don’t to the second.  Their point is that if you put everything on your credit card, you’ll have a record of what you spend and how, and they have tools to help you sort that and look at your overall spending choices.

I’m not recommending using a credit card to track your spending (or recommending against it, even) but the essential point of the commercial, that tracking your spending is important, really hits home for me.  Two years ago, the only spending I tracked was bills that went in and out.  Things like gasoline, groceries, and anything else that we spent money on, I just spent the money and didn’t really pay attention to how much it was.  I thought I was trying to spend as little as I could and that was the best I could do.  But I was wrong.  The first month I actually tracked my spending, I was shocked at how much money I frittered away on little things.  It isn’t that I spent money on non-essentials, it is that I was spending much more of the money that came in every month on non-essentials than I ever imagined.

Tracking my spending was the very first real step I took that made a difference in our financial future.  Even now, when money is becoming tighter, unexpected expenses keep popping up simultaneously with the cost of everyday items rising, tracking spending is how I am going to keep things on track and continue to reduce our debt, even if it becomes a little by little process.  We’ve had big strides, and small steps, and every one of them gets us closer to that debt-free line.  And the tracking was that essential first step.  Without being honest with ourselves about our financial picture and figuring out where to go from there, we wouldn’t be where we are today.  We may have a long way to go, but we’ve also come a long way from that point almost 2 years ago when I didn’t have a clue what my money was really doing.

What does what you spend say about your priorities, and are you controlling that or is it happening by default?

I have an envelope on my desk full of receipts from the second half of January.  And last night I decided I am just going to file them and start over.

We all have the best of intentions for whatever we start out to do.  I did very well last year maintaining a budget and keeping a detailed record of my spending.  And I intended to do the same this year.  And I still can – but I got behind in January for obvious reasons and the amount of work I needed to do to get back up to speed became insurmountable in my brain.  Was it truly insurmountable?  No, but the truth of the matter was, the amount of recordkeeping I needed to do to get back to square one was keeping me from doing anything currently.  Consequently, I just got further and further behind.

So I drew an imaginary line in the sand, so to speak.  Yesterday was February 1st, and I decided that February 1st was a new day, a new month, and the re-beginning of my 2009 budget.  I sorted all my receipts from January out of my pockets and desk and put them all in an envelope, and then logged into my bank online and checked my account for what checks I had written that hadn’t been processed yet or online payments I’ve made that hadn’t been debited yet.  I hadn’t used my debit card in several days so I knew that was up to date.  I then looked through all the charges from the past few weeks to make sure I knew what they all were, and then took my balance from my account, subtracted out all outstanding items, and put the final total on my budget sheet as my new account balance for February.

Maybe I’ll go back in the future and get January caught up.  But right now, hanging onto January was keeping me from moving forward into February and keeping a spending log at all.     Sometimes, we need to let the past be the past and resolve to continue what we set out to do in the future.  And for me, this was one of those times.

I entered the receipt from my spouse getting gasoline last night, and I am on my way to getting back on track with keeping track of our spending.  One little step at a time.