I’ve Paid For This Twice Already…

Archive for the ‘budget’ Category

At different points in our “coupled” lives, my spouse and I have had semi-irregular income. When we were first married, I worked at a job with unpredictable bouts of overtime, and my spouse’s job had profit sharing as part of its salary structure, so our income was very variable from month to month. Now, my spouse’s salary is very regular, but my income is completely variable. Because my spouse’s salary at this point eclipses my earnings, I consider our income fairly regular, but budgeting, even zero-dollar budgeting, can be done even on the most irregular of incomes.

When looking at how to budget when your income from month to month is in flux, one of the big keys is to try and even out the hills and valleys as much as possible through a savings plan. To do this, you need to save a portion of what you earn in good months and use that to help smooth out the tougher months. It is a simple concept, but hard to do without serious discipline. It is easy to justify spending a little more in “good” months, but the key to making irregular income budgeting work is to treat good months and bad months the same from a budget perspective.

How do you know what to save, and what qualifies as a good month? If you have had an irregular income for three or more months, the easiest way to do this is to come up with your average earnings over an at least 3 month if not a year period. The longer the better. You can then base your budget off that number. Let’s say the number is $2500 per month. When you make $2700, you bank $200 of that. When you make $2300, you pull $200 out of that savings to make up the difference. This should be a totally separate account from your emergency savings account or any other savings goals. This is the budget savings account and will make your irregular income life simpler to manage.

If you have no idea what you will earn month to month, you’ll have to be more conservative and creative at first. Determine your very baseline expenses. This is the amount you absolutely need to make, and this will form the beginning of your budget. What you make over that, bank. After a few months go by, you can look at if you end up with a surplus each month, and make some upward adjustments in your budget to create yourself some wiggle room. Go slowly, and be careful. The more data you have, the more sure you can be that you have the room to wiggle.

What happens if you do better than history dictates for an extended period of time once you’ve “regularized” your income? You can use that savings surplus towards another financial goal, or make some upwards adjustments in your budget. I recommend some additional retirement savings, myself, as long as you are out of debt.

Basically, the key to budgeting with irregular income? Make it mimic regular income as much as possible. Predictability is the key to the zero-dollar budget. If you know how many dollars you have, you can assign every dollar a job, and make them work as hard for you as you worked to get them.

Share This

If you enjoyed this post, make sure you subscribe to my RSS feed!

I wear glasses. I have since I was 8, so for me, they are just a part of my existence. My vision isn’t bad enough that I can’t get by without them in my house, but it is bad enough that I need them to drive or all the signs are blurry (I am near-sighted). My vision gets worse very slowly, so slowly that I don’t really notice it until I get my eyes rechecked and I get the new prescription and think “Wow, that stuff in the distance is now so much sharper!”.

I haven’t been for an eye exam in a few years now - yes, I should, but this isn’t about that. We’ve prioritized our medical money differently and I haven’t found the funds or really been that concerned about it. My birthday was this past week, and my driver’s license was expiring, so on Friday I went down to the BMV to renew my license. When I took the eye exam, I noticed that the first set of numbers they had me read seemed a little blurry to me, and I actually had to guess on one of the four numbers between a six and an eight. The other two sets of four numbers were perfectly clear. And yes, I passed the eye exam 100%, I was a good guesser apparently.

The old me would have just shrugged this off, may or may not have thought about it being time for another eye exam before I renew my license in the future, and moved on. But instead, I noted to myself that I need to get a new eye exam this year, and although chances are in the four years until my license renews again I would have had another eye exam, I might not have. So I’m heading off a potential “emergency” at the pass and not failing my next license exam and have to run out and buy new glasses, whether or not I could afford it. I can plan for the expense, research places to go, and not turn this putting things off into an emergency.

It’s amazing what a little thoughtful prior planning can do.  If we can keep this up eventually the only emergencies we’ll have will be true emergencies and not the result of procrastination, financial or otherwise.

Share This

If you enjoyed this post, make sure you subscribe to my RSS feed!

A while back, I was told I need to get my wisdom teeth out. I do have both dental and medical insurance, but the dental insurance said when I called them to discuss it that wisdom teeth go to medical first and they didn’t generally pay for wisdom teeth removal, and the medical said no way are they paying anything when they were called. So I was a little disheartened by the whole thing, especially since the price for the entire procedure the dentist quoted me was around $1600, give or take a little. Finding this out right on the heels of the $3600 car repair did not do much for my financial state of mind.

So when I had my filling done at the end of February, I talked to the dentist’s billing office about everything, and they seemed to think that they could get the dental insurance to pay for 80% of it, since they are supposed to pay 80% of extractions, and they can bill it in such a way so it should be covered. At any rate, running it through my insurance would give me the discount that the dentist is contracted to give the patients of my insurance. So we filled out a “Predetermination of Benefits” form and sent it off to the insurance company. I was very hopeful, but wasn’t counting any chickens of course.

This week I got the predetermination form back from the insurance, and they are indeed covering 80% of the procedure! It says right on the form the teeth that are being extracted - 01, 16, 17, and 32, so they know it is my wisdom teeth and they are agreeing to cover it. Their negotiated price is $778.00 (gotta love insurance contracts I guess!), and they are paying $622.40 and I will be responsible for $155.60. This doesn’t even bring the total insurance has paid out this year up to my $1000 maximum per year for benefits, so I will still have my cleaning in September covered as well! Hurrah! I couldn’t have gotten better news!

We still have about $300 left in our FSA (which runs from August 1st to July 31st every year for some reason) so I can take the cost of the procedure entirely out of that and still have enough left over for my spouse’s asthma prescription this year. I’ve scheduled the procedure for the first Friday in June at 9am. I plan to sleep most of that weekend knowing we’ve paid for it already, and we didn’t even have to use our economic stimulus check to do it. Again, hurrah!

Life is good.

Share This

If you enjoyed this post, make sure you subscribe to my RSS feed!

At the grocery store the past month, a new product has appeared in the organic milk section. I generally buy Horizon Organic milk because it is the brand available where I shop. Horizon is like the mass-merchandiser of organic dairy products, but that is another discussion altogether.

A few weeks ago while getting a half gallon of the milk off the shelf for my kids, I noticed that there was a new version of the milk nestled in with the normal ones. This new version was in the same packaging, the same colors, in whole and 2%, but had a special decal on it that said it was fortified with DHA Omega-3. I’d read some about the benefits of DHA Omega-3 before, so it caught my eye. As I picked it up to look more closely at it, I noticed that the price of this new product was actually 5 cents more than the cost of the regular organic milk.

So I put it back. I didn’t put it back because I don’t think DHA Omega-3 would be worth an additional 5 cents per half gallon, that is also another discussion altogether. I put it back because it was mixed in to look identical but yet was 5 cents more. Not that 5 cents is a lot, and my budget can absorb it, but I was just turned off by the idea that it was just mixed in with the other very similarly packaged products yet at a higher price point.

I generally buy 60-70 items in an average weekly shopping trip. If everything I bought was simply 5 cents more this week than they were last week, on top of the “normal” price inflation that occurs by the passage of time, I would add between $3-$3.50 to my grocery bill per week. Over the course of the year, that would add $150-$180 to my grocery spending. Little things do indeed add up.

I’m still researching if I feel the milk additive might be beneficial to my children’s health and development, and if so, if milk is the best place to get it at this point or if they are already getting sufficient amounts from their normal diet. So I may change my mind about purchasing it in the future. But I’m still displeased with what I feel was rather sneaky product placement and pricing to encourage me to spend a little more without even noticing I was.

Share This

If you enjoyed this post, make sure you subscribe to my RSS feed!

When grocery shopping, that is.

I’ve always heard the theory that shopping the perimeter of the grocery store - buying the fresh foods and not the processed ones - is less expensive overall. Now that my spouse is following a specific meal plan, I’m buying almost exclusively fresh food, when I used to buy a mix of fresh, canned, frozen, and some processed food. And lo and behold, my first week shopping, I spent almost twice my normal grocery budget. Now, some of that was “start up” expenses, foods that I can buy in bulk and use over time, but a lot of it was things I will have to buy on a weekly basis (produce doesn’t last forever, after all). I expected this to be the case, but it begs the question - contrary to popular wisdom, is shopping the perimeter really more expensive?

For us, it appears to be, and I’ve identified three key reasons why that is the case. First, I didn’t buy solely processed foods in the first place. I had a mix of select processed foods and select fresh, frozen, and canned foods in my past regular weekly grocery lists, so we aren’t comparing solely processed to solely fresh. I generally tried to make cost-conscious choices when it came to buying fresh vs frozen or canned, and with substituting that for all fresh, that raised the overall price. (I will be going back to some frozen in the future, we are still working out exactly what we want from the meal plan.)

Second, it is winter here, and winter is not the biggest growing time ever. The food comes from farther away and is much pricier. In the summer I expect to find more fresh food cheaper, as well as being able to take advantage of some farm stands. I live in a city, so I don’t have a ton of access to farm stands but our city does have a weekly farmers market in the summer I can check out.

Third, I have pretty much successfully tamed my impulse shopping, and I think that is a huge reason why aisle shopping is generally more expensive than perimeter shopping. The longer you stay in the store, and the more area you are exposed to, the more things you can potentially buy. It is not that I have more willpower than the average person, it is just that I am generally more aware and on guard against the impulse buys, and I have a specific plan in walking through the store where I do not go down any unnecessary aisles. That limits my exposure to extra items that can magically jump in my cart. They sometimes do, especially Arizona Herbal Iced Tea, but generally, I am pretty well behaved.

So, for us, it seems the perimeter of the store does in fact add to our grocery bottom line. Not that it isn’t worth the extra expense, but we’re still working on adjusting what we expect and what choices we should make to still get the most bang for our buck.

Share This

If you enjoyed this post, make sure you subscribe to my RSS feed!