I’ve Paid For This Twice Already…

Archive for the ‘budget’ Category

For all of my adult life, I’ve looked at my money on a monthly basis, and assigned bills to each paycheck.  The electricity gets paid out of the first paycheck.  The rent (now mortgage) gets paid out of the second paycheck.  And so on and so forth.  My planning for how to meet monthly obligations was always directly tied to the money that was coming in that particular month.  I honestly didn’t realize there was any other way until after I started this blog.

We have now successfully reduced our recurring monthly obligations so that they could all conceivably be covered by one of my spouse’s two paychecks each month.  Because we have eliminated about $660 worth of monthly bills in eliminating the car loan, his student loan, and the credit card, our recurring monthly bills are almost exactly the same as a single biweekly paycheck for him.  Not quite, but very close.  This does not in any way, shape or form mean that we could get by each month on just one of his paychecks, for we wouldn’t eat or drive the cars, never mind saving any for irregular expenses, but it has opened up a new possibility in my head.  Maybe it’s time to try and get a paycheck ahead.  Maybe we could go from living paycheck to paycheck, to living one paycheck ahead of the game.  Instead of spending paychecks as they come in on monthly bills and expenses, we could be spending the first paycheck of the month at the end of the month, and the second paycheck of the month the next month instead.

I still have to come up with a plan how to do so, and since it is close to the end of 2008, I’ve decided to make it my goal to start 2009 working one paycheck ahead.  I’ll still be putting all the money we possibly can each month towards paying off the last non-mortgage debt, it may just get shifted by two weeks or so while I do it.

Off to work on step one - change all direct deposits of paychecks from our checking account to our savings account.

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I buy my clothes at Goodwill.  I don’t say this to act all holier-than-thou or suggest that everyone should do the same.  It is just a facet of my actions defining my priorities.  I don’t put a high priority on my clothing being fashionable or in style or anything like that, so I don’t spend a lot of money on clothes.  I do try to find clothing at Goodwill that looks decent on me and it has to be in great condition, but if it is a color I’m not sure was the best choice or it fits a little funny, odds are I’ll still buy it if I can’t find the perfect item.

On the other hand, there were only certain areas of my particular city I was willing to buy a house in.  If we had shifted 5 miles south of where we are, we could have gotten a very similar house for about 20-30% less than we paid for the one we are in.  We don’t live in the “best” neighborhood in our city, but we certainly do not live in the “worst” either.  I looked at the schools available, the crime rates, the availability of green space, and many other factors to determine our target neighborhoods and then bought a house within one of them.

How do your actions define your priorities?  What do you spend your money on, and what do you go without or spend less on?   What are you saving for, and what percentage do you save?  The things we actually do with or money, versus the things we tell ourselves we should do with our money, is how we define our financial priorities.  Do your financial priorities align with the ones in your head?  Pull apart your budget and find out.  My goal for the next month is to work on my 2009 budget and have it completely reflect our family’s priorities.  I welcome everyone to give it a try. 

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When gasoline prices started a rapid, noticeable increase, my spouse and I both started driving differently.  I made a much more conscious decision to try and combine trips and generally drive less whenever possible, while my spouse started looking at websites about hypermiling and tried to increase his gas mileage that way.  He had mixed results with that (since I drive his car too, I blame me and my total disinterest in the subject) but he has been keeping a journal and trying to find trends to help him improve his mileage.

Now that gas prices are falling, are we keeping it up?  My spouse is still hypermiling and doing a good job of at least trying to reduce his gas consumption. Since he mostly just drives to work and back and we don’t have public transportation he can take instead, reducing his actual driving would take very big steps, so this is his way of cutting down on costs.  And he’s kept it up even with falling gas prices.

I’ve been trying to keep up with driving less, and I still do drive less than when I started consciously reducing trips and combining errands.  But I find it a little easier to let myself deviate and take side trips, or go back out if I forget a stop on my errand route.  I have been able to do almost all my grocery shopping and errands for the past several months on my way to and from work which also cuts down on my driving.  But I could do a lot better, and for a while, I did do a lot better.

So I’m resolving to try to ignore gas prices, and get back into the habit of avoiding driving altogether if possible.    I don’t know how well I’ll do, but I am going to track it by the number of miles I drive.  Hopefully I can knock it down a few hundred this month from last.

Did you change your driving habits in the past year as the direct or indirect result of the price of gasoline?  Did the changes stick or are you slowly sliding back into your old habits?

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My spouse has been following a meal plan for almost a year now.  And through that, it has helped me understand a lot about myself as well and the art of overindulging.  I have the direct monetary overindulging generally under control now, but my indirect overindulging could use some work.  Especially in the arena of food.

My spouse eats a certain number of calories per day.  He doesn’t strictly follow the meal plan any longer, but he keeps track of his overall calorie consumption, and limits himself to a specific amount.  So I don’t have to worry about stocking up on items for him - because if I do, his calorie count keeps him from gorging on them and using them up faster just because I stocked up.  So when there is a great sale on the cereal he eats or the protein bars he has for snacks, I can buy in bulk (within the expiration date) with no qualms, for I know that the calorie limit he has imposed upon himself will keep him from eating them faster just because they are there.

I wish the same could be said of everything else.  I am not as good about controlling myself, and in some ways, neither are the kids.  The kids do have a certain number of snacks per day, so that does control how much they eat.  But if I buy a lot of a particular thing they really like, if they know about it they’ll request that for every snack.  I’ve taken to “hiding” the stocked up snacks in a different closet and taking them out as needed on a weekly rotation.

But if I controlled my calories as well as my spouse does, I would be much more successful at stocking up on stuff I love.  I have no problem with stocking up on many of the  things we use on a daily or weekly basis and using them only as needed.  But then there was a sale on lentil soup.  And a week later, I am surprised I haven’t turned into a lentil.  I ate that stuff all the time. Which negates the purpose of stocking up.  It is not saving money if you consume more of it because its there.

Lentil soup is yummy.  Especially if you boil a potato and cut it up into it, and eat it with a chunk of crusty bread.  But I digress.

Overeating doesn’t just widen my waistline, it depletes my wallet.  If I do better with portion control, it doesn’t matter if we have 2 cans of lentil soup or 20 on hand.  If I only eat them when I would be normally consuming a meal, I’m not using anything up faster than I should.  Even if I choose lentil soup for every meal - especially if it was cheap.  :)  If I eat it when I’d be eating something else if I didn’t eat it, that’s okay.

If I eat it when I normally wouldn’t be eating anything just because it is yummy - well that’s costing me money.

So no more eating yummy stuff just because it is there unless I should be eating something then anyway.  My waistline will thank me in the end.  I think.

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I’ve read a lot recently about budgets and spending plans, and why some people prefer spending plans over budgets for their flexibility and ability to plan and chart goals into the future.  The idea is that charting where your money goes as it comes in and goes out (a spending plan) is less likely for failure than deciding where your money will go before it shows up and then making sure it goes there when it does (a budget).    A spending plan allows for change, for life, for happenstance. A budget is rigid, proscriptive, and doesn’t allow you to live life as it happens. If something unexpected happens, you’re breaking the budget. The budget drives you - whereas you drive the spending plan.

But I contend that a budget done well is basically similar to a spending plan - in fact, it’s really two sides of the same coin. A well-crafted budget is a spending plan that has a name with a bad rap.  In fact, I contend that many would call my own budget a spending plan, because I allow flexibility when I need it, and look at it as a fluid, ever-evolving process.  My budget gives me the ability to really look at my financial priorities and decide what is important to me before I start spending.  I vote with my dollars, so to speak, by deciding where I would like them to go.  But a spending plan does this as well - just after the fact.  You vote with your dollars, and then just see how the dollars voted at the end.

I prefer to pretend I have some voluntary control over it all.  But that doesn’t mean I never adjust my budget or change things midstream.  I just make an ideal plan of how I would like things to go first.  And then edit as needed along the way.

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