The Financial Cake

One of my favorite quotes is “if you want to make a new cake, you have to change the ingredients.” My financial cake has not been tasting good lately, so it’s time to switch things up.

I always thought I was being super responsible financially and hated the advice of how to save a bit each month because I don’t buy coffee every morning, I don’t have cable and I so rarely go out to eat, but this month I found out there is squish room in EVERY budget, you just have to consider what’s important to you and make cuts.

My new mortgage + my HOA saves me $80 a month from what I had been paying (paying less per month was a requirement when I was home shopping and thanks to the market, I got a place I love for less!) and updating my car insurance to my new address resulted in $10 savings on that! I downgraded my Blockbuster online account since I hadn’t been finding time to watch many movies anyway, saving $10 each month as well. Finally, my health insurance monthly payment went up, so I changed plans and my new one saves about another $10 from the original plan I had. That’s $110 a month! 

I’ve also recently conceded that an eight-month emergency fund is A. a little excessive (probably great advice for different situations, like a one-income family, just to be safe) and B. the bane of my existence. I have five months and it’s a nice, round, plushy number.  Call me happy. 

I actually had almost six months so I’m going to take the extra and pay off my credit card that crept up over the summer (“saving” the payment I was making on it, anywhere from the $15 minimum to $100/month) and overpay on my smaller student loan next month (not saving money yet, but shortening the payment period to help future MJ save).

I think a big drive for these changes was that I was tired of the monotony of spending bare bones money on the same things every month and feeling like I constantly had to save every single penny.  I’m single and in my 20s and should be having a little more fun! 

So there you have it, I’m saving some money, spending more money elsewhere…just a reshuffling really, but I think I’m going to be happy with this new cake for at least a while now that I’ve learned to be flexible with my spending and my attitudes about money.

How do you save money?

I just wrapped up tracking my spending for August. Notice I said tracking my spending NOT my budget because even though I tried to make the switch from knowing what I spend to following a budget late last year, it lasted all of a few months.

I’m embarrassed to say that my spending has been OVER my earning for the last six months. Yep, I only successfully didn’t spend more than I earned for the first two months this year. Don’t get me wrong, the first two months were big savings months and the last six haven’t been radically over what I earned, so I’m actually still in the black for the year. Barely.

Naturally, with my spending raging out of control, I decided to buy a house. Makes sense, yeah? The idea was that I’d save money by owning (thank you, plummeting housing market) and in the first place I would have.  I got my good faith estimate for my new place last night and it pretty much matches my housing costs right now, but the HOA gives me more plus I’ll save on gas for many reasons, so don’t worry that I’m going to end up as a short sale or foreclosure!

Trying to save anything during the month I’m closing escrow and moving doesn’t make much sense and if all those upfront costs were included, of course I’d be spending over what I make, but that money is coming from a separate fund and I am not counting those costs in my monthly expenses.

So, taking those out of the picture, I have given myself the goal to save $200 of my regular monthly income based on my regular monthly expenses.

Which led me to the question of “how do you save money?”

Today I really wanted a Whole Foods sammie from their sandwich bar (turkey on focaccia – legit focaccia, something I have only found in ONE of their stores and sadly not the one I work by anyway – with Muenster, sun-dried tomato ai0li, pesto aioli, lettuce, tomato, roasted red peppers, panini style…it’s heaven in your mouth and you’re welcome), BUT it was only because I was driving by after running some errands and I knew I had salad and soup at work and wouldn’t, in fact, die if I didn’t get my beloved sammie. Did I just save $8? I don’t really think so. It’s more like I didn’t spend it and I’ll find out in 30 days if it paid off in the amount of $200.

Being that I decided house-buying expenses don’t count, I guess this next point moot, but with the holiday weekend coming up (and no holiday in sight for me thanks to Bridezilla my sis) I thought it would be a good time to buy the three missing appliances for my new place to “save” a little money.

Spending money to save money has never made much sense to me, but I’m still a sucker for the advertising ploy. Again, doesn’t really count as saving. That money I would have spent on full-priced appliances will stay in my house fund for the next thing I need want to buy.

I follow some bloggers who are going on spending fasts this September, but I’m not quite ready to go there yet, although it might be the kick in the pants I need. The challenge I’m setting for myself here is simply end the month having NOT spent $200 of what I’ve earned. That’s how I save money.

And…because I like goals, my other goal for the month is to leave my anxiety in August.  August, being my birthday month, is one of my favorites, so it’s kind of a terrible place to leave anxiety, but there’s no need for it in September.  I cried it out a bit last night in one of those “what am I crying over?” moments where you realize you just need to cry over nothing and everything.  Today, with the fresh start of September, I will run and do yoga, two great stress relievers for me.  I think that’s a great start. 

So, how do you save money?  What are your goals for September?

Slim Pickings

It’s that time of the month.  No, not THAT time.  THAT time has come and gone and I’m eagerly awaiting the arrival of my next round of cramps from hell and Too Sad Tuesday.  Another time.

THIS time of the month is the time when I’ve just about drained my checking account.  Payday is tomorrow so at the stroke of midnight, my account will get a magical bump and all will be well with the world again.

As I mentioned in a SFC post, I transfer money to my savings account shortly after getting it in my checking to ensure I actually save something for the month, but then I do the worry game and constantly check my account. 

Is there a scheduled payment I’ve forgotten about?  Just how much ARE gas stations holding on your card these days before they let you pump?  I think I’ll make it.

BUT, just because I’m getting paid, doesn’t change the fact that there’s still two days left in April, so spending is staying down.  The end of the month is always when I have to really have to focus on NOT spending and the focusing really makes me WANT to spend!

Case in point, I spent the last two days after work wandering shopping centers.  When it got to be 6:00, I thought to myself, who AM I?  I’m a homebody, go home!  I did end up with a pretty dress from Nordstrom Rack (still using my tax refund to supplement my wardrobe) and couldn’t resist an OPI polish.  I do not buy OPI normally, but the color was awesome (Red My Fortune) and it went on so smoothly, I might be a convert.

Anyway, if an $8.50 bottle of polish is my splurge, I think I’m okay.   

I have $74.76 left in my budget (really only for gas and two nights out) and $134.08 in my account, so balls to the wall!

I did okay with my budget this month and I also had a realization.  When I assessed my spending, I was paying $191 on the second of every month for my car payment.  My idea of how much I spent per month included that, but when I finished with those payments last October, my idea of how much I spent per month, and therefore, what I gave myself permission to budget every month, remained the same. 

Add to that the fact that I recently started participating in my company’s 401k program (just as soon as they announced they had reinstated their match) and my paychecks ain’t what they used to be, so I realized it’s time to pull back.

Now add to THAT the fact that I feel like I have a well-paying job.  I feel like I’ve paid my dues with crappy jobs, with having to work two jobs.  I’m a professional in my mid-20s and my opinion is that as you become more successful (and get older), you get more flex room with your spending, not the opposite. 

Needless to say, when I presented this idea of pulling back to myself, it was met with a bit of resistance.  What’s right isn’t always easy and what’s easy isn’t always right.

Insert big girl panties. 

I sucked it up and skimmed a bit off of each category in my budget that had flex room and have now ended up with a budget plan for May that is $150 lower than my previous idea of how much it should be, making myself save most of that car payment I would have previously been making, but giving myself a little reward for being done with it. 

This budget thing really is a month-by-month learning process.

March Budget Update

Better late than never, I wanted to write about a few money lessons from my March budget.  (I now realize it’s only the 7th, but my brain is like weeks ahead because of all the plans I have and I’ve convinced myself that it’s practically May.)

I already mentioned how March was all about begrudgingly digging into my e-fund.  Yesterday was my last trip to the dentist for his overhaul and the cheapest (I think because I reached my deductible, yikes).  Man, I’m going to miss him.  Or not.

Still, at the end of the month, I was able to put a little savings back into my e-fund, my planned $50 into the wedding fund and even a little something-something into my wanderlust fund!

That’s because when it came to my actual budget, I kind of rocked it.  With $38 left on the 31st, I paid my entry into my last 10K of the season (and really, only my second 10k ever) and ended the month $10 under budget!

With every month I’ve had a budget (since December now), I’ve learned something new and gotten better at it.  In March, I learned that budgets are all about mindful and planned spending. 

Having no-spend days (goal was ten, had nine, not bad) means going to the grocery store on a day I know I have an automatic bill coming out of my account.  It also helps my sanity.  I actually don’t like shopping all that much, so if I hold off on going to Target or Sports Chalet until another day, I’m more than okay with that.

Planning my budget for the month ahead means considering all expenses (as many as I can, things pop up of course).  Like, for April, I put extra money in my car fund because I need to get my oil changed and extra money in my phone category because I’m upgrading this month. 

In March, I also got more realistic about my “going out” category.  I avoid eating out and didn’t have many opportunities for it before (because guys always pay on a first date and most of the men I date don’t make it past the first date and my social life has been lacking) but now I’m going out more, so I’m giving myself more room in that category.  And when I do go out, I’m setting nightly spend-limits, if I go to happy hour or something, I’ll tell myself that I’m only going to spend x amount to stretch that going out budget.

My April budget looks good and includes some fun and some savings, which is exactly the balance I wanted when I started making and following budgets.

E-Fund S.O.S.

I have been doing pretty well on my emergency fund recently.  It’s not fully funded, but it’s comfortable.  March has certainly been a test of that. 

A check up at the dentist in February turned into a three-phase follow up and my insurance covers some, but definitely not all. 

A safety recall on my car turned into a complete overhaul.  Okay, not complete, but the list of things they found wrong was immense!  It was all stuff I knew needed to be fixed and had it on my list but never got around to (my future husband and my father both just rolled their eyes).  It was convenient to just take care of it all at once while I got to drive a fun, little Jetta around for the day, but taking on the cost all at once was not fun.  At all.

A few years ago, even though I had the money, I would have put it on credit cards so I didn’t have to think about it all coming out of my account at once.  But now, instead of freaking out about these expenses, I reminded myself that this is what the emergency fund is for, transferred the money into my checking account and paid it like a big girl.

Okay, maybe I freaked out a little.  I thought about how I could pull back on my spending to pump up what I’m contributing to get the e-fund back on track, thoughts of a second job flooded my brain.

But, I took a calming breath, reminded myself, again, that’s what it’s there for, so that I don’t have to disrupt my monthly budget.  I honestly don’t remember the last time I dipped into it, so even though I had two “emergencies” this month, it doesn’t mean I’ll keep having them.

I also had a bit of a freak out when my second bride and the few bridesmaids she had in tow picked a dress that costs more than any dress, let alone a bridesmaid’s dress you’ll wear once, should and more than I had budgeted for.  However, I smiled, said, “whatever the bride wants,” and forked over the first half for the down-payment while reminding myself that that’s what the wedding fund is for and the $30 that it went over what I budgeted just means I’ll sit out a round or two at the bachelorette party.

Without these focused funds, I’d probably still have the same amount in savings, but putting it aside and labeling its purpose really helps me a lot.  And that’s what they’re there for!

Stand in Your Truth

As I’ve mentioned, I love Suze Orman.  I don’t get to watch her show very much, but last weekend I was at the gym while it was on (because that’s how exciting my Saturday night was) and I got to catch up with Suze while getting in some miles on the treadmill.

The episode was all about promoting her new book, The Money Class, and the big message was “stand in your truth.”  Basically, she wants people to be honest with themselves about their money situation – as it is today, not as it was or as they wish it was – and live accordingly.  It also means living below your means, but within your needs.  There’s a whole pledge she’s asking people to sign.

I didn’t sign because I’m not THAT cheesy and I feel like I do okay with living that anyway, but I did write “stand in your truth” in my calendar for the week and repeating that mantra really helped me in many ways!

This week, a few opportunities came up to eat out or go for drinks and I was also seriously craving some take out a few times, but my truth was that I have planned events later this month and need to save some of my eating out budget.  More so, I was stocked up on good stuff at home, so why waste that? 

I thought about buying something to wear out last night for St. Patty’s Day, but I’d rather spend my clothes budget on something else.  I don’t look particularly good in green!  So, I wore old green clothes last night and had just as much fun!

It wasn’t all about money, either.  I stood in my truth and balanced my “calorie bank account” a little better than I have been.  I stood in my truth and didn’t eat just because I was bored.

And then, of course, there’s the being honest with myself about who I do and do not want to spend time with.

Common sense? Maybe.  But it’s a nice reminder when you know the right thing to do, to let (sometimes make) yourself do it.

Free Money. That’s Not Actually Free.

OMG, an X on a triple letter?! I miss Scrabble BTW.

I don’t believe in tax refunds. 

I mean, I know they exist, but I don’t believe in loaning the government your money for a year (interest-free!) so they can give it all back to you in the Spring and you can pretend it’s free money and blow it on clothes, trips, toys and/or whatever tickles your fancy. 

Some more fiscally sharp taxpayers may decide to pay off credit cards, but if you got a little extra in each paycheck throughout the year like you should have, perhaps you wouldn’t have the credit card debt in the first place.

A tax refund isn’t free money. It’s your money.  What’s the point in getting a smaller paycheck?  Show me the money!

The first time I thought about taxes I was 21 and my dad wanted me to be part of the process so I could do it on my own after graduating college.  My internship had been paying me as an independent contractor, not taking out any taxes and I owed them in a big way.  Boo. 

The years since then have been a balancing act.  With every new tax season I’ve modified my W-2 to attempt to overcompensate for investments I hold.  I try to get it as close to zero as possible.  But I’ve pretty much always ended up owing.  And crying in the middle of H&R Block.

[Insert sound of record scratching to a stop.]

The above was really easy to write BEFORE I did my taxes (on my own this time, thank you very much) and the government told me they wanted to thank me for being so patient in years past by giving ME money this year. 

I called them assholes.  I saw IRS agents in my future. Then I called my sister because we are in the same tax situation to see what hers ended up being like this year (she also got a return, but attributed it to her tax lady who sets her up to guarantee a return).  Then I went to my dad and asked him to review it.

Then I admitted that I did everything right and that the numbers don’t lie and I filed them.  Apparently, I overshot just how much I had to overcompensate (and/or overestimated the growth of my investments).

So now I’ve started THE LIST.  You know, the “I was just handed free money and NEED to spend it” list.  Responsible things like my emergency fund and student loans are on the list, but so are “fun” things.  I’m sure I’m going to end up splitting the cash, but, um, yeah, okay, I’m kinda a little excited about getting this extra money (albeit MY money). 

I still don’t believe in tax refunds, though!  Next year, the mission will again be zero.

Saving (My Sanity)

My budget spreadsheet got a makeover this year.  Specifically, it’s actually acting as a budget, whereas up until last December it was basically just where I tracked what I spent and prayed that my end-of-the-month number was smaller than my income.

Now I’m creating a monthly budget and am still trying to figure out the whole following it thing.  Baby steps, right?

Basically, I simplified my budget spreadsheet, but the thing I’m most excited about is the addition I made.  Hello goals tab.  

I’ve always been good at saving money, in fact, my sister used to tease me for it, but there was never real organization to it until now.

Now, in lovely 2011, I’m tracking my savings goals – bridesmaid fund, e-fund and retirement contributions – and my goals for paying off my student loans ahead of schedule.  I made a column for my planned and actual contribution to each fund and I set up the equations to show me what percentage of my goals I’ve reached.  It makes it a lot easier to follow my budget because all the money I save goes to one of the funds.  And now I know which one. 

And when I pay for wedding-related things, I’ll know I’m spending the wedding money.  And instead of pretending all of my money in my bank accounts in my e-fund, I will see when I actually meet my eight-month goal and be able to pad the fun part of my budget. 

The uber-organization of the color-coded charts made my heart flutter a bit.  Until I realized those funds suck.

Yes, I’m excited about being in two weddings and the time I get to spend with family and good friends during all the related festivities, the idea of fully-funded emergency and retirement accounts keeps me sleeping as snug as a bug in a rug and I’m planning a 24-hour happy dance-a-thon for when I finally pay off my student loans. 

BUT…a girl’s gotta live, am I right?

So, I added one last goal.  A wanderlust fund.  It gets the least amount of attention money, but the point is that it gets some.  All work and no play makes MJ a sad girl.  I love knowing that I’m putting aside money specifically to get on a plane and stay in a hotel and experience something totally new and wonderful.  Even if I’m only at 1% of my total goal at this point.  Again, baby steps.

December Budget Roundup

Okay, first of all, this budget thing is a fabulous idea.  Why the hell did it take me so long to balls up and do it?

I’m a competitive person and love structure and a challenge.  Um, hello?  That is everything a budget is about.  Or, at least everything MY budget is about. 

So, this December I finally extended the challenge of a budget to myself and accepted said challenge from myself.  I not only followed the budget, I beat it.  See what I mean about competitive?

I set out to spend $2000, the amount I thought I normally spent, although realistically it was always a few hundred over, and as of December 31st I actually spent less.  I am kinda awkwardly excited about this.  Tracking my spending for the last few years has really made me think about my spending, but making and following a budget was empowering.

The thing is, I didn’t feel like I spent my money any differently than I had in the preceding months.  I might have said no to myself when otherwise I would have said, “why not?” but I’m not worse off for it.  I’ve actually forgotten about whatever little things I wanted to buy here or there.

So, since I’m new to this whole budget thing, during the last week of the month, I was haunted by one question.  What do I do with the “excess”?  I probably should have had a plan for this because there’s no way I would have spent exactly $2000, that would really freak me out actually.  Perhaps my thought was that there was no way I’d be able to spend UNDER it at all. 

I thought of many things…e-fund, wedding fund, retirement fund, extra payment for my credit card or school loans.  And okay, I may have thought about clothes or taking myself to the movies. 

I’m sure there’s a right answer, but without enough time to think about how I’m prioritizing my goals, I made an extra payment on my credit card and have the rest hanging out in my checking account and will eventually move it to my e-fund.  And I vowed to come up with a plan for my overage next month!

December Budget Update – Week 1ish

So far, I have spent $977.26.  Yep, almost half of my budget in a week-ish!  But it included a lot of my big expenses that come at the beginning of the month (plus my school loan payment that usually comes at the end, but I made early).

So far, I have really wanted to stop at Taco Bell and get froyo and buy candy at the checkout counter  (restricting my budget apparently brings out my inner fat kid).  But, I haven’t.  I don’t need or “deserve” these things.  I don’t even like Taco Bell.  I need, want and deserve to SAVE money (and prove to myself I can) and SPEND it on things that are actually important to me. 

I have been frugal with my gas usage because even though I drive a compact car, I’m always surprised at how often I fill up!  Walking to the grocery store also really helps you stick to a list!  I made my own black beans, buying a dry bag for less than the cost of one can, which makes a lot.  How much?  I don’t know.  A LOT.  In other news, I’ve been eating A LOT of black beans. 

I got the personal shopping bug out of my system, using a gift card (a Thanksgiving gift from my company, which my coworkers mocked, but I was thrilled about!) to scoop up some cozy lounge wear – and still have $11 left on it, yay H&M and Target!  Now I can focus on my Christmas shopping for others, which is where a good chunk of my budget is allocated. 

Other “free” items I plan on cashing in on this month:  taking my empty bag of Starbucks ground coffee in to the store for a free tall drip coffee ( it’s how I rationalize buying it over a less-expensive bag), a register-generated coupon for a free grande anything at SB (free coffee gets my panties in a twist in a good way, obviously), my monthly extra rental from BB and a free medium pizza from Papa John’s for donating blood.  I have been craving pizza!