I have a confession to make. Yesterday, when I paid my credit card bill, I realized that my balance on my YNAB spreadsheet didn’t quite make sense. After some quick math, it was clear that I had forgotten to enter a few transactions. I hadn’t been reconciling YNAB with my credit card statement, so the mistake was easy to make. It wasn’t a lot of money – a little under $30. But it was also more than one transaction.
I went back through two credit card statements and found the missing transactions. Two small online transactions and one transaction where I distinctly remember not getting a receipt. So that threw off the budget a bit. Not a big deal, but definitely a reminder to make sure I’m logging EVERYTHING. Part of the problem was 99 cent iTunes songs. I need to either be sure to flag the receipt when it arrives in my inbox, log the purchase immediately, or just buy myself an iTunes giftcard and not have to worry about it.
I’m considering trying to tighten my financial belt for July and see how much money I can save. July isn’t the best month to be doing that, as I have family visiting and will need to spend a bit of extra money while they’re here. But I can always tighten my spending except for things related to their trip. But I think I’m going to try to see how many no-spend days I can have this coming month and how much I can pad up my budget for August.
Spending Spree - $800
With a spare $800 to toss around, I would buy plane tickets to Seattle to visit a friend who I only get to see about once every few years. It would be a cross country flight, which I hate, but with $800, I could likely get a direct flight, and it would be great to see her and her husband.
Showing posts with label budget. Show all posts
Showing posts with label budget. Show all posts
Friday, June 27, 2008
Tuesday, June 24, 2008
Budget Disaster... Sort Of
My budget is all out of whack this month. I just didn't do a good job of predicting my spending categories. I'm still using (and still loving) YNAB, and when I budget for the upcoming month, in many categories, I frequently use the same budget numbers without giving real thought to what's going on that month. In some cases this makes sense - my cable bill doesn't change, and my cell phone bill is always right around the same amount. Additionally, I sock away a set amount for vacation and gifts to be used in the future.
I'm pretty good about guesstimating my cash use. If I'm traveling, I plan to need more cash that month. Additionally, now that the farmer's markets are open, I'm spending more cash. (Of course, this should mean that I put less money into my grocery budget, but that doesn't seem to be how it's working.)
This month, I barely touched my dining out budget. I ate out once, and that was to grab something small the night that the power went out in my building. Yes, I could have still eaten at home, but seeing as there was a smoking power transformer visible from my window, I wasn't sure how long the power would be out and therefore, didn't want to risk opening the fridge.
Of course, the converse to that is that my grocery budget is an absolute disaster. I spent nearly $100 more than I had budgeted for. What happened to the plan of perusing ads and using coupons, you ask? Well, that plan went into effect, that's what happened. I spent way more than I planned to, but I also have much more food in the house than I did last month. I bought a lot of things that I use regularly while they were on sale and won't need to buy again for a few weeks. The theory is to stock up when things are on sale and ultimately save money, but I'm not really seeing that in the budget yet.
Plus it's nice to know that during next week's grocery trip, the only things I will really need to buy (I use the word "need" very loosely) are fresh fruits and veggies, most of which can be picked up at the farmer's market.
I'm sure that part of the problem is that I struggled to stick to this particular grocery budget six months ago, and that was before the increase in food prices. So it's entirely possible that my grocery budget is just a little too ambitious.
For July, I'm going to attempt to keep my spending as tight as possible. I'm not sure how well that's going to go, seeing as I have family and friends coming to stay with me for a few days, and as they have always taken me in and made sure I had whatever I wanted to eat and drink, I feel the need to repay the favor. But I'm going to try.
Abundant Life Spending Spree Day 3 - $100
With a spare $100 to spend, I think I would take a friend or two out for dinner. It's nice to be able to treat others from time to time.
I'm pretty good about guesstimating my cash use. If I'm traveling, I plan to need more cash that month. Additionally, now that the farmer's markets are open, I'm spending more cash. (Of course, this should mean that I put less money into my grocery budget, but that doesn't seem to be how it's working.)
This month, I barely touched my dining out budget. I ate out once, and that was to grab something small the night that the power went out in my building. Yes, I could have still eaten at home, but seeing as there was a smoking power transformer visible from my window, I wasn't sure how long the power would be out and therefore, didn't want to risk opening the fridge.
Of course, the converse to that is that my grocery budget is an absolute disaster. I spent nearly $100 more than I had budgeted for. What happened to the plan of perusing ads and using coupons, you ask? Well, that plan went into effect, that's what happened. I spent way more than I planned to, but I also have much more food in the house than I did last month. I bought a lot of things that I use regularly while they were on sale and won't need to buy again for a few weeks. The theory is to stock up when things are on sale and ultimately save money, but I'm not really seeing that in the budget yet.
Plus it's nice to know that during next week's grocery trip, the only things I will really need to buy (I use the word "need" very loosely) are fresh fruits and veggies, most of which can be picked up at the farmer's market.
I'm sure that part of the problem is that I struggled to stick to this particular grocery budget six months ago, and that was before the increase in food prices. So it's entirely possible that my grocery budget is just a little too ambitious.
For July, I'm going to attempt to keep my spending as tight as possible. I'm not sure how well that's going to go, seeing as I have family and friends coming to stay with me for a few days, and as they have always taken me in and made sure I had whatever I wanted to eat and drink, I feel the need to repay the favor. But I'm going to try.
Abundant Life Spending Spree Day 3 - $100
With a spare $100 to spend, I think I would take a friend or two out for dinner. It's nice to be able to treat others from time to time.
Wednesday, May 28, 2008
Saving money but busting the budget
I've been trying to be a smarter grocery shopper. I've shopped with a list for a long time, and am good about not deviating from the list too much, but lately, I've been paying more attention to sales and coupons in an effort to save money. I'm also working on stocking up on groceries a bit more, just to keep the cupboards from getting bare on the off chance I can't get to the store for longer than normal.
For example, today, I discovered that my favorite brand of coffee was on sale. $1.30 off. I needed one bag. But I bought two. I also noticed that Lean Cuisines were marked down to $2.50, so I picked up a few of those as well, even though they weren't on the list at all.
Unfortunately, it's the end of the month. I didn't have enough in my monthly grocery budget to cover all of these extras. I just decided to pull from next month's budget, since I'll be eating most of the food next month anyway, but that's not a trend that can continue from month to month.
I definitely spent more this month on groceries than I have in the past. But I also have more food in my house than I normally do, and even though I've spent more than normal, I've also saved quite a bit by watching for sales. Obviously, saving is good, but spending out of budget is bad.
I hope that in a month or two, this plan will start to pay off in that I will be spending less because I'm buying on sale, and stocking up when things are less expensive. And that the budget busting will end.
For example, today, I discovered that my favorite brand of coffee was on sale. $1.30 off. I needed one bag. But I bought two. I also noticed that Lean Cuisines were marked down to $2.50, so I picked up a few of those as well, even though they weren't on the list at all.
Unfortunately, it's the end of the month. I didn't have enough in my monthly grocery budget to cover all of these extras. I just decided to pull from next month's budget, since I'll be eating most of the food next month anyway, but that's not a trend that can continue from month to month.
I definitely spent more this month on groceries than I have in the past. But I also have more food in my house than I normally do, and even though I've spent more than normal, I've also saved quite a bit by watching for sales. Obviously, saving is good, but spending out of budget is bad.
I hope that in a month or two, this plan will start to pay off in that I will be spending less because I'm buying on sale, and stocking up when things are less expensive. And that the budget busting will end.
Monday, May 19, 2008
What to stimulate
Last week, I got the notice in the mail that I would be receiving my stimulus check soon. I mentally plugged the extra $600 into my budget and pondered what I would do with the money.
Sadly, I don't have anything exciting planned. I didn't budget well this month for my upcoming vacation and all the associated expenses, so in YNAB, I'm already a bit over budget. Not a big deal, since I live off of last month's income, but it just meant that things would be a little tight again next month. I can't say I was worried, seeing as June is a 3 paycheck month. Of course, one of my plans for 2008 is to bank the "extra" paycheck in all 3 paycheck months, but to cover my overages this month, I was going to bank most of it, put the rest toward the budget overages, and then attempt to make it up throughout the year by putting a bit more into savings than planned.
Thanks to the stimulus check, I might still be able to bank that entire paycheck. Of course, I'm not expecting to be $600 overbudget. I considered putting the rest into savings, but I looked at some of my upcoming expenses and instead decided to plug the rest into my various budget categories for future expenses. Some will go into the grocery budget, some into car expenses, some towards my upcoming renters insurance payment, and then as a treat, a little bit into my wishlist fund and maybe a little into my restaurant category.
Nothing too exciting, but it will free up the budget a bit. Ideally, I'd like to be padding each of my budget categories every month so that I do end the month with a bit of a cushion. So far, that's not working so well, but maybe the stimulus will do just that - stimulate my budget to work even better for me.
Sadly, I don't have anything exciting planned. I didn't budget well this month for my upcoming vacation and all the associated expenses, so in YNAB, I'm already a bit over budget. Not a big deal, since I live off of last month's income, but it just meant that things would be a little tight again next month. I can't say I was worried, seeing as June is a 3 paycheck month. Of course, one of my plans for 2008 is to bank the "extra" paycheck in all 3 paycheck months, but to cover my overages this month, I was going to bank most of it, put the rest toward the budget overages, and then attempt to make it up throughout the year by putting a bit more into savings than planned.
Thanks to the stimulus check, I might still be able to bank that entire paycheck. Of course, I'm not expecting to be $600 overbudget. I considered putting the rest into savings, but I looked at some of my upcoming expenses and instead decided to plug the rest into my various budget categories for future expenses. Some will go into the grocery budget, some into car expenses, some towards my upcoming renters insurance payment, and then as a treat, a little bit into my wishlist fund and maybe a little into my restaurant category.
Nothing too exciting, but it will free up the budget a bit. Ideally, I'd like to be padding each of my budget categories every month so that I do end the month with a bit of a cushion. So far, that's not working so well, but maybe the stimulus will do just that - stimulate my budget to work even better for me.
Friday, May 9, 2008
YNAB - A Review
I started using YNAB a few months ago and have sporadically updated my progress, but after a comment, decided it was time to do a true review and update.
I am using YNAB for Excel, meaning that it's a spreadsheet. It's not as fancy as YNAB Pro, the standalone program, but it's exactly what I need. First off, I love spreadsheets. I love that I can edit this as I please (of course, for fear of screwing things up, all I edit is a bit of the formatting). I especially love that I can use it at work or at home. I keep the official copy of my budget on my computer at home, but in my GMail Drafts folder is an e-mail with a draft copy of the budget. That way, I can update it on my lunch hour, or check to see what kind of money I have left in my dining out budget before going out for drinks. Plus it's just a second backup of the file - if something should happen to my computer at home and my external hard drive, I've still got a copy in my e-mail.
I'm not sure what I like the best about YNAB. I love the general method of living on last month's income. It's nice to have a bit of padding and know that if something comes up and I overspend by $100 this month, I have the money for it, I just have to spend less next month. I love that I can make up whatever categories I want. I love that I can change my budget month to month with no difficulty.
Perhaps this is not kosher on the YNAB plan, but I love that I can make a budget on the 1st of the month and then on the 15th, move things around so the budget reflects my actual spending. Yes, I realize that defeats the idea of the budget, but I have created for myself an "other" category. Some things just automatically go in there, like items I will be reimbursed for. But for the most part, that money gets moved around. Grocery budget falls short? Pull from the other category. Decide to spend more on someone's gift? Other category. I treat it as a flexible spending category - the money I can spend on whatever. And at the end of the month, if there's something left, it goes into the "Wishlist" category. I have this short list of things that I want to buy - books, movies, electronics, other non-necessities - and the more money that I can get into my wishlist budget category, the closer I am to buying one of those items.
I like that it tells me how much I've spent in each category so far for the year, and I like that I can very easily see where I've gone overbudget. Those bright red numbers really do help curb my spending.
I think my favorite thing is the ease in planning ahead. I know that my bi-annual car insurance payment is coming up in a few months. I have been budgeting 1/6th of that amount for the past few months so that when the payment comes due, I will have all that money set aside. Yes, I realize I could do this without YNAB, but I like that the spreadsheet carries the amount over for me. It has really made saving for big purchases much easier.
Some people don't like the idea of YNAB because they think it will be time consuming. Making my monthly budget takes maybe 15 minutes. I like to enter my expenses every few days, and I do so by saving receipts in my wallet. I also do most of my spending by credit card (and I don't track my cash, just record a "cash" expense) so it's easy to pick up any expenses I might miss. This can easily be done on a weekly basis, and really doesn't take that long.
I've never had a problem with credit card debt or not having money to pay my bills, but I really never had a good idea where my money was going. I knew that I had enough money in my bank account to cover the bills, and that meant that some months I spent less than I made and some months I spent more than I made, but it all evened out.
I really like knowing where my money is going. Am I saving more? I think so, especially in the months where the big expenses (like insurance payments) hit. Before YNAB, I would just pay the entire bill and then have to really scrimp with the rest of my spending. Now that month will be just like every other month. I'm slowly trying to build up money in a number of categories as well, so that I can have a bit of a buffer in my grocery budget if I want to splurge, or in my clothing budget if I find a great pair of shoes on sale.
While I highly recommend YNAB for anyone looking for a budget, I understand that it's not for everyone. I do recommend some method of tracking where your money goes each month. You might be surprised.
I am using YNAB for Excel, meaning that it's a spreadsheet. It's not as fancy as YNAB Pro, the standalone program, but it's exactly what I need. First off, I love spreadsheets. I love that I can edit this as I please (of course, for fear of screwing things up, all I edit is a bit of the formatting). I especially love that I can use it at work or at home. I keep the official copy of my budget on my computer at home, but in my GMail Drafts folder is an e-mail with a draft copy of the budget. That way, I can update it on my lunch hour, or check to see what kind of money I have left in my dining out budget before going out for drinks. Plus it's just a second backup of the file - if something should happen to my computer at home and my external hard drive, I've still got a copy in my e-mail.
I'm not sure what I like the best about YNAB. I love the general method of living on last month's income. It's nice to have a bit of padding and know that if something comes up and I overspend by $100 this month, I have the money for it, I just have to spend less next month. I love that I can make up whatever categories I want. I love that I can change my budget month to month with no difficulty.
Perhaps this is not kosher on the YNAB plan, but I love that I can make a budget on the 1st of the month and then on the 15th, move things around so the budget reflects my actual spending. Yes, I realize that defeats the idea of the budget, but I have created for myself an "other" category. Some things just automatically go in there, like items I will be reimbursed for. But for the most part, that money gets moved around. Grocery budget falls short? Pull from the other category. Decide to spend more on someone's gift? Other category. I treat it as a flexible spending category - the money I can spend on whatever. And at the end of the month, if there's something left, it goes into the "Wishlist" category. I have this short list of things that I want to buy - books, movies, electronics, other non-necessities - and the more money that I can get into my wishlist budget category, the closer I am to buying one of those items.
I like that it tells me how much I've spent in each category so far for the year, and I like that I can very easily see where I've gone overbudget. Those bright red numbers really do help curb my spending.
I think my favorite thing is the ease in planning ahead. I know that my bi-annual car insurance payment is coming up in a few months. I have been budgeting 1/6th of that amount for the past few months so that when the payment comes due, I will have all that money set aside. Yes, I realize I could do this without YNAB, but I like that the spreadsheet carries the amount over for me. It has really made saving for big purchases much easier.
Some people don't like the idea of YNAB because they think it will be time consuming. Making my monthly budget takes maybe 15 minutes. I like to enter my expenses every few days, and I do so by saving receipts in my wallet. I also do most of my spending by credit card (and I don't track my cash, just record a "cash" expense) so it's easy to pick up any expenses I might miss. This can easily be done on a weekly basis, and really doesn't take that long.
I've never had a problem with credit card debt or not having money to pay my bills, but I really never had a good idea where my money was going. I knew that I had enough money in my bank account to cover the bills, and that meant that some months I spent less than I made and some months I spent more than I made, but it all evened out.
I really like knowing where my money is going. Am I saving more? I think so, especially in the months where the big expenses (like insurance payments) hit. Before YNAB, I would just pay the entire bill and then have to really scrimp with the rest of my spending. Now that month will be just like every other month. I'm slowly trying to build up money in a number of categories as well, so that I can have a bit of a buffer in my grocery budget if I want to splurge, or in my clothing budget if I find a great pair of shoes on sale.
While I highly recommend YNAB for anyone looking for a budget, I understand that it's not for everyone. I do recommend some method of tracking where your money goes each month. You might be surprised.
Wednesday, April 16, 2008
Deobligating Emergency Funds
In the past month or so, my budget has been an additional source of stress that I really didn't need. I was over budget in a number of categories, while still trying to work on that YNAB concept of living on last month's income. Things were clearly not going well.
I had also realized that while my work wardrobe was great for the winter, my sweaters were not going to cut it for the summer months and I had to spend some money on some shirts for work. And in another 50 miles or so, I would need a new pair of running shoes.
So I had all that occurring on one Excel spreadsheet. But over here, on another Excel spreadsheet, was the account that I had designated my emergency fund. It very easily had 10 months of normal expenses in it - not just the expenses I would have if I lost my job and needed the emergency fund for 10 months. And this isn't including my normal savings account - this is just the emergency account.
After a stressful day at work, I came home to find the budget spreadsheet open on my computer. And I made a decision. I took $1000 out of my emergency fund account, transferred it to my day to day account, and reworked the budget.
And it was like a weight had been lifted. I was no longer overbudget in a bunch of categories, and I can "splurge" on the $10 charity event on Friday. I can go to the store and buy a few nice, yet inexpensive items to wear to work. I can finally buy the frame for my bar association certificate.
Do I plan to spend all the money this month? Absolutely not. But it's the padding I needed to get me through the expenses flying at me from all directions. Will everyone agree with this tactic? Probably not. But for me, I think it was the right decision. If nothing else, I feel better about my financial situation, and that's what's important.
Plus I won't have to wear sweaters to work in July. Always a good thing.
I had also realized that while my work wardrobe was great for the winter, my sweaters were not going to cut it for the summer months and I had to spend some money on some shirts for work. And in another 50 miles or so, I would need a new pair of running shoes.
So I had all that occurring on one Excel spreadsheet. But over here, on another Excel spreadsheet, was the account that I had designated my emergency fund. It very easily had 10 months of normal expenses in it - not just the expenses I would have if I lost my job and needed the emergency fund for 10 months. And this isn't including my normal savings account - this is just the emergency account.
After a stressful day at work, I came home to find the budget spreadsheet open on my computer. And I made a decision. I took $1000 out of my emergency fund account, transferred it to my day to day account, and reworked the budget.
And it was like a weight had been lifted. I was no longer overbudget in a bunch of categories, and I can "splurge" on the $10 charity event on Friday. I can go to the store and buy a few nice, yet inexpensive items to wear to work. I can finally buy the frame for my bar association certificate.
Do I plan to spend all the money this month? Absolutely not. But it's the padding I needed to get me through the expenses flying at me from all directions. Will everyone agree with this tactic? Probably not. But for me, I think it was the right decision. If nothing else, I feel better about my financial situation, and that's what's important.
Plus I won't have to wear sweaters to work in July. Always a good thing.
Sunday, April 13, 2008
Budget Busters
Mrs. Micah recently posted about her budget busters and so I'm tagging myself for this meme. What are my five budget busters?
This comes at a time where my budget has already been busted and exploded for the month. So it is well timed.
1. Not planning ahead
I think this is the biggest problem with my budget. YNAB has helped me plan ahead in a lot of areas, but in other areas, I completely neglect to think about what I might need to spend before I make that month's budget. For example, I have been setting aside money for my car insurance payment for the past two months. I have planned ahead so that the bill won't make a huge dent in my monthly budget. But on the other hand, this month, I only budgeted $50 for dining out. At the beginning of the month, I knew that I had two dinners planned with friends. I live in D.C. The odds of me being able to go out to two nice-ish dinners and spending under $25 each time, including tip, is very small. Very very small. I should have budgeted more in that area.
2. Unrealistic goals
Sometimes, I look at the month, and I think "Oh, I can get by without spending more than $10 this month on household items." Never mind that I typically spend closer to $15-$20 each month in this category (it's a broad category for me). And inevitably, I end up spending more than I planned to.
3. Buying in Bulk
I don't just mean buying from a store like Sam's Club or Costco (I never go to either anymore). I mean that I have a habit of stocking up on things. Is this a bad thing? Not necessarily. Especially if I'm buying something on sale. One of my personal vices, for example, is that I have a can of Coke Zero every afternoon. It's a sweet, calorie free treat that calms my cravings for a snack and keeps me going. It's a vice I'm not willing to give up. So I go through a 12 pack of Coke Zero in a little less than 2 weeks. Today, I counted that I still had 7 cans left, so I didn't need any, but I decided to check the price anyway when I went to the store. 12 packs were on sale for $2.29 under their normal price. Not a bad deal! So I picked up two. Nevermind that I didn't need them. Yes, it was a good price, and I saved nearly as much as I would spend on a single 12 pack, but in terms of the budget, that was money that shouldn't have been spent. I do this when things aren't on sale as well. I notice that I'm out of frozen broccoli, so when I go to the store, I pick up two bags rather than one. I go through it in spurts, so I might use both bags this month, I might not. Could I have just bought one bag? Yes. (And note that I pass the grocery store on my walk home from the metro, so the idea of an "extra trip" just means a few minutes, no driving needed.)
4. Borrowing from Peter to pay Paul
So I notice that I've blown my restaurant budget for the month. But hey, there's $15 left in my household budget! So I'll just reduce my household budget for the month and then add the $15 to my restaurant budget! Perfect! Until a week later when I realize that I'm out of laundry detergent and really do need to wash clothes sometime this month. Whoops.
5. Groceries
Groceries are a hard category for me. This also falls into my buying in bulk and my failure to plan ahead categories. Food is the hardest area for me to budget. I try to eat healthy and also eat frugally. I will never buy ramen noodles, even though they're cheap. They're not healthy. I spend a good amount of money on fresh fruits and vegetables, and prices on both have increased in recent weeks. I am hoping the return of my local farmer's market will help that. But if my grocery budget is gone for the month and I realize that there are three days left and I don't have the proper makings of a well rounded meal, well, I'm going to hit the store and buy what I need. My health and my diet are more important to me than keeping my budget. I think what I need to do is budget more for groceries every month, what with the rising cost of food. The goal will be to end the month with money leftover in the budget, but that's much better than busting the budget all together.
I'm not going to tag anyone for this meme either, but feel free to post your own budget busters! I'd love to see what others think!
This comes at a time where my budget has already been busted and exploded for the month. So it is well timed.
1. Not planning ahead
I think this is the biggest problem with my budget. YNAB has helped me plan ahead in a lot of areas, but in other areas, I completely neglect to think about what I might need to spend before I make that month's budget. For example, I have been setting aside money for my car insurance payment for the past two months. I have planned ahead so that the bill won't make a huge dent in my monthly budget. But on the other hand, this month, I only budgeted $50 for dining out. At the beginning of the month, I knew that I had two dinners planned with friends. I live in D.C. The odds of me being able to go out to two nice-ish dinners and spending under $25 each time, including tip, is very small. Very very small. I should have budgeted more in that area.
2. Unrealistic goals
Sometimes, I look at the month, and I think "Oh, I can get by without spending more than $10 this month on household items." Never mind that I typically spend closer to $15-$20 each month in this category (it's a broad category for me). And inevitably, I end up spending more than I planned to.
3. Buying in Bulk
I don't just mean buying from a store like Sam's Club or Costco (I never go to either anymore). I mean that I have a habit of stocking up on things. Is this a bad thing? Not necessarily. Especially if I'm buying something on sale. One of my personal vices, for example, is that I have a can of Coke Zero every afternoon. It's a sweet, calorie free treat that calms my cravings for a snack and keeps me going. It's a vice I'm not willing to give up. So I go through a 12 pack of Coke Zero in a little less than 2 weeks. Today, I counted that I still had 7 cans left, so I didn't need any, but I decided to check the price anyway when I went to the store. 12 packs were on sale for $2.29 under their normal price. Not a bad deal! So I picked up two. Nevermind that I didn't need them. Yes, it was a good price, and I saved nearly as much as I would spend on a single 12 pack, but in terms of the budget, that was money that shouldn't have been spent. I do this when things aren't on sale as well. I notice that I'm out of frozen broccoli, so when I go to the store, I pick up two bags rather than one. I go through it in spurts, so I might use both bags this month, I might not. Could I have just bought one bag? Yes. (And note that I pass the grocery store on my walk home from the metro, so the idea of an "extra trip" just means a few minutes, no driving needed.)
4. Borrowing from Peter to pay Paul
So I notice that I've blown my restaurant budget for the month. But hey, there's $15 left in my household budget! So I'll just reduce my household budget for the month and then add the $15 to my restaurant budget! Perfect! Until a week later when I realize that I'm out of laundry detergent and really do need to wash clothes sometime this month. Whoops.
5. Groceries
Groceries are a hard category for me. This also falls into my buying in bulk and my failure to plan ahead categories. Food is the hardest area for me to budget. I try to eat healthy and also eat frugally. I will never buy ramen noodles, even though they're cheap. They're not healthy. I spend a good amount of money on fresh fruits and vegetables, and prices on both have increased in recent weeks. I am hoping the return of my local farmer's market will help that. But if my grocery budget is gone for the month and I realize that there are three days left and I don't have the proper makings of a well rounded meal, well, I'm going to hit the store and buy what I need. My health and my diet are more important to me than keeping my budget. I think what I need to do is budget more for groceries every month, what with the rising cost of food. The goal will be to end the month with money leftover in the budget, but that's much better than busting the budget all together.
I'm not going to tag anyone for this meme either, but feel free to post your own budget busters! I'd love to see what others think!
Friday, April 4, 2008
March Budget Review
My apologizes for the lack of regular posting this week. I've been in training most days at work and by the time I get home, my brain is so numb that I can't come up with anything intelligent to post.
March was not so good for my budget. The goal was to finish the month with enough money in my YNAB buffer that I could live off of that money for April and start the policy of living off of last month's income.
I'm just about there. I overspent in March, so April's going to be tight, and may have a few overages by the time it's all said and done, but I can make up for that in May.
During March, I was over budget by just over $153. Some of it was preventable, some of it less so. I forgot that my virus protection came up for renewal in March, for example. I also was not aware that I was on auto-renewal, so when I was prompted to renew, I did. And then I got auto-renewed. Meaning that I paid twice. Sure, I'm now covered until March 2010, but that was a chunk of money that I wasn't planning to spend quite that quickly. Additionally, I went overboard on groceries. Some of that has to do with products that I buy in bulk, some of it was just general grocery prices. Looking at April, I think I'll be over this month as well, without any extravagant purchases. Prices have gone up and I prefer to spend the extra money to buy healthy foods. Fresh fruits and veggies are expensive at the supermarket right now. I'm crossing my fingers that the farmer's market sellers will be a bit cheaper.
(Of course, even though I work to save money and live frugally, even if the farmer's market turns out to be more expensive, I will still buy my produce there. Not only is it better quality, but I like the idea of buying locally and supporting the smaller farms rather than paying money to the big conglomerates.)
I did travel for a wedding this past month, but those expenses weren't as bad as I thought. I'm pretty pleased with how well I managed to stick to my budget on that trip. I only purchased a bottle of water and some coffee in the airport, an unusual thing for me as I'm usually drawn in by the magazine racks and bookstores while I'm waiting for my flight.
I am not so hopeful for April's budget, as I'm working from less than I wanted to. I'm going to try to stay as tight to the budget as possible, and then make it up in May. I've got another wedding to travel to in May, as well as a family vacation. My family is actually paying for the vacation so I can attend, for which I am incredibly thankful. I know there is at least one night when it will just be me and my parents for dinner before the rest of the family flies in, so I'm going to try to pick up the tab that night. It's not much, but I think it's a nice gesture and a tiny way I can try to show how much I appreciate their paying for the trip so that I can attend.
March was not so good for my budget. The goal was to finish the month with enough money in my YNAB buffer that I could live off of that money for April and start the policy of living off of last month's income.
I'm just about there. I overspent in March, so April's going to be tight, and may have a few overages by the time it's all said and done, but I can make up for that in May.
During March, I was over budget by just over $153. Some of it was preventable, some of it less so. I forgot that my virus protection came up for renewal in March, for example. I also was not aware that I was on auto-renewal, so when I was prompted to renew, I did. And then I got auto-renewed. Meaning that I paid twice. Sure, I'm now covered until March 2010, but that was a chunk of money that I wasn't planning to spend quite that quickly. Additionally, I went overboard on groceries. Some of that has to do with products that I buy in bulk, some of it was just general grocery prices. Looking at April, I think I'll be over this month as well, without any extravagant purchases. Prices have gone up and I prefer to spend the extra money to buy healthy foods. Fresh fruits and veggies are expensive at the supermarket right now. I'm crossing my fingers that the farmer's market sellers will be a bit cheaper.
(Of course, even though I work to save money and live frugally, even if the farmer's market turns out to be more expensive, I will still buy my produce there. Not only is it better quality, but I like the idea of buying locally and supporting the smaller farms rather than paying money to the big conglomerates.)
I did travel for a wedding this past month, but those expenses weren't as bad as I thought. I'm pretty pleased with how well I managed to stick to my budget on that trip. I only purchased a bottle of water and some coffee in the airport, an unusual thing for me as I'm usually drawn in by the magazine racks and bookstores while I'm waiting for my flight.
I am not so hopeful for April's budget, as I'm working from less than I wanted to. I'm going to try to stay as tight to the budget as possible, and then make it up in May. I've got another wedding to travel to in May, as well as a family vacation. My family is actually paying for the vacation so I can attend, for which I am incredibly thankful. I know there is at least one night when it will just be me and my parents for dinner before the rest of the family flies in, so I'm going to try to pick up the tab that night. It's not much, but I think it's a nice gesture and a tiny way I can try to show how much I appreciate their paying for the trip so that I can attend.
Tuesday, March 18, 2008
Facing the Storm
So as I'm sure everyone has heard or read, the Federal Reserve Board again cut rates in an attempt to stop the current economic downslide. From what I've read, it sounds like a number of analysts believe that we are officially in a recession.
I haven't decided if this means I will be making drastic changes. Of course, I have already noticed the increased price in groceries, so it might mean adjusting my grocery budget or simply working to buy less food.
I'm a little concerned about what's going to happen to my rent come September when my lease is up. I should really consider picking up a roommate, even if it's just an intern who comes for the summer.
I'm going to continue to funnel money into my ING Direct accounts. The interest rates aren't excellent, but they're better than I'm getting at Bank of America, and I like their security and their customer service.
I'm going to work on slowly funding all of my budget categories. Even if I can only drop in $5 a month, that's better than nothing.
After the slight success I'm seeing from cleaning out my closets and listing items on eBay, I'm going to continue that plan. It's kind of a dual benefit situation - I clean out my closets and declutter my life a bit, and I get a bit of cash in return. I'm selling things that I'm not using and therefore are worthless to me. Because of that, I'm delighted to get a few dollars back for it. Sure, it might be "worth" more than what I end up selling it for, but as many people have said, an item is only worth what someone is willing to pay for it.
I have a family vacation planned for the summer, but my only expense there is transportation and incidentals once we arrive (I may try to convince my parents to let me buy them dinner one night, though) and immediately following that is a friend's wedding. Other than that, I don't have any travel planned until Christmas, so no expenses to be cut there. I do have a few items of clothing that I really do need to replace, but I know exactly what I want/need (size, color, brand), so I will just watch for sales and find them when I find them. I may also decide to do more shopping online. Yes, I pay for shipping that way, but I save on gas, and more importantly, I save on impulse purchases.
I will continue to contribute to my TSP each paycheck (I become eligible for the match in June, which will be a nice bump to that account), and I plan to start funding my Roth IRA for 2008 in the coming months. I have a Roth with Vanguard, and I want to buy a new fund, which requires a minimum $3000 initial purchase, so I'm waiting a bit until I'm actually ready to put that chunk of money into an investment.
Other than that, I just plan to ride this thing out. I'm not in a position to buy a house, and the falling interest rate does hinder my plans to save for a down payment, but not by all that much. Only a few hundred dollars a year, really, and while that would be nice to have, it's not the end of the world that I have to save a little bit longer.
To summarize, I would say that my plans for this recession are to simply dig in my heels and hold on and maybe try to make a little progress in the face of the storm.
Sunday, March 16, 2008
Mid-Month Budget Update
It amazes me just how quickly a few little things add up to a blown budget.
That's right, halfway through the month and I've blown my budget. Not by much, and after some juggling, only in one category, but it's still hard to see on the spreadsheet. Since I am working on YNAB and getting to a zero based budget (and having a month's worth of expenses in reserve), it really won't cause any problems. Just frustration.
My goal is to have a month's worth of expenses saved by the end of this month so that next month, I can bank both of my paychecks for use in May. I should get there this month provided my tax return shows up (something happened with the communication between the IRS and my bank, and so I'm getting a check mailed).
I am just kind of surprised how quickly my budget got out of whack this month. I don't feel like I spent out of control, and yet my spending is pretty much done for the month once all the bills are paid and the money is put into savings for upcoming bills. I've quickly realized just how out of control my spending was in the past. Six months ago, a month with expenses like these wouldn't have made me think twice. Now I'm realizing just how easy it is for money to disappear.
In all honesty, I don't feel like I overspent this month, even with the budget issues. I had a couple of things come due that I had forgotten about (and somehow, I ended up with a 2 year virus protection renewal rather than just one), and I made a few bulk food purchases that will last me months. I ate out more than normal, but I was also out of town, so that was a given. What I did learn is that I need to continue to put small amounts of money into all my budget categories so if I do have a month where I spend more on, say, household items, it won't break the budget.
The goal for the rest of the month is to try to keep spending as tight as possible, and continue to cull through my belongings to see what I can sell (and donate). This weekend I placed a few things on eBay, and already one has sold, leaving me with $25 after shipping and paying the fees for all the items I listed. Another item seems to be going through a minor bidding war. My packrat tendencies continue, but I'm going to try to get rid of a few things each weekend to both clean out my closets and pad my budget a bit.
That's right, halfway through the month and I've blown my budget. Not by much, and after some juggling, only in one category, but it's still hard to see on the spreadsheet. Since I am working on YNAB and getting to a zero based budget (and having a month's worth of expenses in reserve), it really won't cause any problems. Just frustration.
My goal is to have a month's worth of expenses saved by the end of this month so that next month, I can bank both of my paychecks for use in May. I should get there this month provided my tax return shows up (something happened with the communication between the IRS and my bank, and so I'm getting a check mailed).
I am just kind of surprised how quickly my budget got out of whack this month. I don't feel like I spent out of control, and yet my spending is pretty much done for the month once all the bills are paid and the money is put into savings for upcoming bills. I've quickly realized just how out of control my spending was in the past. Six months ago, a month with expenses like these wouldn't have made me think twice. Now I'm realizing just how easy it is for money to disappear.
In all honesty, I don't feel like I overspent this month, even with the budget issues. I had a couple of things come due that I had forgotten about (and somehow, I ended up with a 2 year virus protection renewal rather than just one), and I made a few bulk food purchases that will last me months. I ate out more than normal, but I was also out of town, so that was a given. What I did learn is that I need to continue to put small amounts of money into all my budget categories so if I do have a month where I spend more on, say, household items, it won't break the budget.
The goal for the rest of the month is to try to keep spending as tight as possible, and continue to cull through my belongings to see what I can sell (and donate). This weekend I placed a few things on eBay, and already one has sold, leaving me with $25 after shipping and paying the fees for all the items I listed. Another item seems to be going through a minor bidding war. My packrat tendencies continue, but I'm going to try to get rid of a few things each weekend to both clean out my closets and pad my budget a bit.
Thursday, March 6, 2008
Cash or Credit?
I have discovered that I'm one of those people for whom cash just burns a hole in my pocket. I limit myself to taking a specific amount of cash out of the ATM each month. I can spend it on whatever I want, but when it's gone, it's gone. For the most part, it tends to go to the occasional caffeine fix during the afternoon, splitting dinner and drinks with friends, things like that. (Of course, during farmer's market season, I take out more cash, deduct that amount from the grocery budget, and buy all sorts of fresh, delicious food.)
I am one of those people who does much better with budgeting if I use a credit card. Number one, I use only one credit card, even though I have multiple. It is an Amazon.com Visa by Chase. I love the rewards, and since I pay it off every month, the higher interest rate does not bother me. (I am working to better utilize my Discover Card though, and take advantage of their 5% cash back opportunities.) I am much less likely to pull out my credit card for a quick $2.00 purchase, where as plunking down that amount of cash is a quick process.
I've also found there's something to having to transfer that big chunk of money to the credit card company every month - yes, I could automate it, but having to type it in and watch it transfer makes it sink in a bit more.
Part of the problem might be that I don't track my cash expenditures. Maybe if I tracked it, I would be less likely to spend at random, but each time I tried that, I ended up without receipts, and forgot what I had purchased. It was a failed experiment. The new experiment is to always budget the same amount of cash every month. So if next month, I start the month with $20 in my wallet, well, I can take out $20 less from the ATM, and rebudget that saved $20 into another budget category, like an additional $20 to my clothing or book fund. For the most part, looking at it that way has helped.
It seems that among personal finance bloggers, there is a debate over whether it is better to go to an all cash system or to completely avoid cash and use credit or debit cards. After reading all the opinions, I don't think there is a right answer. I think it depends on a number of factors, and everyone should do what works best for them. Which is why I'm sticking to mainly credit card transactions.
I am one of those people who does much better with budgeting if I use a credit card. Number one, I use only one credit card, even though I have multiple. It is an Amazon.com Visa by Chase. I love the rewards, and since I pay it off every month, the higher interest rate does not bother me. (I am working to better utilize my Discover Card though, and take advantage of their 5% cash back opportunities.) I am much less likely to pull out my credit card for a quick $2.00 purchase, where as plunking down that amount of cash is a quick process.
I've also found there's something to having to transfer that big chunk of money to the credit card company every month - yes, I could automate it, but having to type it in and watch it transfer makes it sink in a bit more.
Part of the problem might be that I don't track my cash expenditures. Maybe if I tracked it, I would be less likely to spend at random, but each time I tried that, I ended up without receipts, and forgot what I had purchased. It was a failed experiment. The new experiment is to always budget the same amount of cash every month. So if next month, I start the month with $20 in my wallet, well, I can take out $20 less from the ATM, and rebudget that saved $20 into another budget category, like an additional $20 to my clothing or book fund. For the most part, looking at it that way has helped.
It seems that among personal finance bloggers, there is a debate over whether it is better to go to an all cash system or to completely avoid cash and use credit or debit cards. After reading all the opinions, I don't think there is a right answer. I think it depends on a number of factors, and everyone should do what works best for them. Which is why I'm sticking to mainly credit card transactions.
Wednesday, March 5, 2008
Spending too much... and yet not...
Yesterday, I went on a bit of a spending binge. At least, I definitely felt like I was going out and being "bad" with my finances. I haven't been shopping for non-necessities since early January, and I have definitely been feeling the pinch. I have a list of things that I want/need to buy when the money comes available (a new cover for my iPod, as the old one has a huge rip in it, a good thermos to bring coffee to work, etc). But I've been waiting.
Really, I blame spring for what happened yesterday. I woke up and it was nice out. Really nice. (Ok, so it was humid and then rained, but it was warm at least.) I realized that perhaps the sweater I wanted to wear to work was not so weather appropriate. I also realized that I don't have a lot of warm weather work clothes.
I decided, therefore, to go shopping at lunch. I'm lucky in that I work in an area with a number of stores within walking distance. I knew that I really didn't have much of a clothing budget this month, but I felt I needed to buy something to start fleshing out my spring and summer wardrobe.
I ended up coming back after lunch having been to buy clothing, and then to the sporting goods store and also Bed, Bath, and Beyond. No, those last two aren't places to buy work clothes. And I was feeling like I had really blown the budget. What did I buy?
A very nice knit top in a style that I wear often
A new knee brace for running, something I've been looking at for a while
A new soap dish for my shower, since the old one fell and broke last week
A "major" shopping spree, and I came back with things that I needed. Well, I didn't absolutely need the shirt, but it was not unneeded either. What about the budget? After plugging the expenses into YNAB, I ended up a total of $30 over in a few categories. I've already made an extra $18 selling books on half.com, which means I'm $12 over budget. Not bad at all, especially knowing that I intentionally overbudgeted in certain areas.
Of course, this can't happen all the time, but it made me realize that I can't keep my budget as incredibly strict as I have been. I can splurge a little bit from time to time, as long as I'm careful to not go overboard.
I think that too many times, we create budgets for ourselves and try to hold ourselves to incredibly strict financial rules. While it is important to save for the future and make smart choices, we also need to reward those decisions in the here and now as well.
Really, I blame spring for what happened yesterday. I woke up and it was nice out. Really nice. (Ok, so it was humid and then rained, but it was warm at least.) I realized that perhaps the sweater I wanted to wear to work was not so weather appropriate. I also realized that I don't have a lot of warm weather work clothes.
I decided, therefore, to go shopping at lunch. I'm lucky in that I work in an area with a number of stores within walking distance. I knew that I really didn't have much of a clothing budget this month, but I felt I needed to buy something to start fleshing out my spring and summer wardrobe.
I ended up coming back after lunch having been to buy clothing, and then to the sporting goods store and also Bed, Bath, and Beyond. No, those last two aren't places to buy work clothes. And I was feeling like I had really blown the budget. What did I buy?
A very nice knit top in a style that I wear often
A new knee brace for running, something I've been looking at for a while
A new soap dish for my shower, since the old one fell and broke last week
A "major" shopping spree, and I came back with things that I needed. Well, I didn't absolutely need the shirt, but it was not unneeded either. What about the budget? After plugging the expenses into YNAB, I ended up a total of $30 over in a few categories. I've already made an extra $18 selling books on half.com, which means I'm $12 over budget. Not bad at all, especially knowing that I intentionally overbudgeted in certain areas.
Of course, this can't happen all the time, but it made me realize that I can't keep my budget as incredibly strict as I have been. I can splurge a little bit from time to time, as long as I'm careful to not go overboard.
I think that too many times, we create budgets for ourselves and try to hold ourselves to incredibly strict financial rules. While it is important to save for the future and make smart choices, we also need to reward those decisions in the here and now as well.
Friday, February 29, 2008
YNAB - February Update
February was the first full month in which I used the YNAB system. My thoughts so far?
I love it. I don't think I can recommend it enough.
This month, and for the next few months, I have to keep my spending very tight. I have some major expenses coming up, and I need to make sure that I have the money to spend on them. Pre-YNAB, I would have just tried to not spend much money, but not paid too much attention to what I was spending and where it is going. Now, I'm setting budget amounts and making sure I stay within them.
I admit, I do flex my budget. Right now, I'm working on building up a buffer, so when I had to put down a robe deposit for my choir robe, I just reduced my buffer by that amount. But in terms of smaller amounts, I just make my budget work for me. Overspent on eating out? Pull it from the grocery budget. And things like that. I managed to increase my buffer, as well as save a significant portion of money for my upcoming bills and vacation.
I'm still not to the point of living on last month's income, which is what YNAB is built on. I'm close though, and I'm hoping that with the addition of my federal tax refund (which doesn't so much feel like a refund, since it's $300 less than what I owed to the state) and that by keeping March's budget tight, I will be there by April.
I'm very impressed with my ability to keep my grocery budget down. Before, I struggled to keep it under $200. Now that I've been using YNAB, my grocery budget has easily been under $200, and this month, was the lowest it's probably ever been.
Of course, my fridge is empty, so come Saturday, there will be some big grocery spending. But still, I think I can keep it under control. I take a calculator to the grocery store. I pay attention to what I'm spending, and what I should be spending on.
YNAB has been a great resource for me, and if you haven't already, clearly, I recommend you check it out.
I love it. I don't think I can recommend it enough.
This month, and for the next few months, I have to keep my spending very tight. I have some major expenses coming up, and I need to make sure that I have the money to spend on them. Pre-YNAB, I would have just tried to not spend much money, but not paid too much attention to what I was spending and where it is going. Now, I'm setting budget amounts and making sure I stay within them.
I admit, I do flex my budget. Right now, I'm working on building up a buffer, so when I had to put down a robe deposit for my choir robe, I just reduced my buffer by that amount. But in terms of smaller amounts, I just make my budget work for me. Overspent on eating out? Pull it from the grocery budget. And things like that. I managed to increase my buffer, as well as save a significant portion of money for my upcoming bills and vacation.
I'm still not to the point of living on last month's income, which is what YNAB is built on. I'm close though, and I'm hoping that with the addition of my federal tax refund (which doesn't so much feel like a refund, since it's $300 less than what I owed to the state) and that by keeping March's budget tight, I will be there by April.
I'm very impressed with my ability to keep my grocery budget down. Before, I struggled to keep it under $200. Now that I've been using YNAB, my grocery budget has easily been under $200, and this month, was the lowest it's probably ever been.
Of course, my fridge is empty, so come Saturday, there will be some big grocery spending. But still, I think I can keep it under control. I take a calculator to the grocery store. I pay attention to what I'm spending, and what I should be spending on.
YNAB has been a great resource for me, and if you haven't already, clearly, I recommend you check it out.
Thursday, February 21, 2008
Groceries and Self-Imposed Rules
I think I might make it through the month sticking to my very strict grocery budget. And that includes spending grocery budget money on a bottle of wine for a party I was invited to! I'm pretty impressed with myself, actually. For months, I struggled to keep my grocery budget under $200, and when 2008 hit, I just said that I wasn't going to try to keep the spending under $200. I was going to keep the spending under $200. Made it last month, and I should make it this month. I've got about $25 left for the month, and technically, I think I could make it through the month without spending any more on groceries. I will want to buy more fresh fruit and veggies.
I've been very good about taking a list to the store, and only buying what's on the list. I stray from the list only if something that I use regularly is on sale, so I stock up a bit. I have also started carrying a calculator with me to the store, so that I have a good idea about how much I'm spending and how that's affecting my budget. It really makes you re-think picking up that $2.50 bag of whatever. And on the other hand, it makes me realize that yes, I can "splurge" and buy that extra bag of Craisins to mix with my oatmeal. It lets me be both frugal and reasonable with my spending.
One thing I do struggle with is all the "rules" that I'm trying to follow while grocery shopping. As has been well documented, eating healthy isn't always cheap. At this time of year in the D.C. area, produce is ridiculously expensive. I can't wait until the Farmer's Market in my area returns (yes, there are other Farmer's Markets in the area, but given the time and cost to get there, it's not really worth it to me to make the trip). I still continue to eat healthy and just let my finances suffer the consequences. And then, there's the idea of staying environmentally friendly. I like to buy organic. I like to buy things with reduced packaging. I even bring my own bags for produce.
All combined, those are a lot of rules to keep for myself, and sometimes it's hard to not go crazy and just buy an expensive, unhealthy, overpackaged, processed frozen meal.
Ok, it's not that hard, because that sort of thing no longer sounds appetizing. But it can be hard to buy healthy, organic, environmentally friendly food that is still budget-friendly. I just remind myself that it's all worth it.
I've been very good about taking a list to the store, and only buying what's on the list. I stray from the list only if something that I use regularly is on sale, so I stock up a bit. I have also started carrying a calculator with me to the store, so that I have a good idea about how much I'm spending and how that's affecting my budget. It really makes you re-think picking up that $2.50 bag of whatever. And on the other hand, it makes me realize that yes, I can "splurge" and buy that extra bag of Craisins to mix with my oatmeal. It lets me be both frugal and reasonable with my spending.
One thing I do struggle with is all the "rules" that I'm trying to follow while grocery shopping. As has been well documented, eating healthy isn't always cheap. At this time of year in the D.C. area, produce is ridiculously expensive. I can't wait until the Farmer's Market in my area returns (yes, there are other Farmer's Markets in the area, but given the time and cost to get there, it's not really worth it to me to make the trip). I still continue to eat healthy and just let my finances suffer the consequences. And then, there's the idea of staying environmentally friendly. I like to buy organic. I like to buy things with reduced packaging. I even bring my own bags for produce.
All combined, those are a lot of rules to keep for myself, and sometimes it's hard to not go crazy and just buy an expensive, unhealthy, overpackaged, processed frozen meal.
Ok, it's not that hard, because that sort of thing no longer sounds appetizing. But it can be hard to buy healthy, organic, environmentally friendly food that is still budget-friendly. I just remind myself that it's all worth it.
Friday, February 8, 2008
YNAB - Mid-month (sort of) update
As I mentioned a few weeks ago, I recently purchased and began using YNAB. I wanted to post a quick update about how my new budgeting system is going.
To recap, my previous method of budgeting was "Put $X into savings at the beginning of the month. Then spend less than what's left because that is spending money." While that worked fine, I found myself in a sad situation mid-January when I had spent nearly all of the funds in my "spending money" account thanks to some once or twice yearly bills that I had forgotten about, plus a bit of overspending in, oh, just about every area. Sure, I didn't have to go into my savings account to pay the bills. But I had very little cushion in my spending account. I make a good living, so that wasn't something that should be happening.
Plus, after reading some accounts from other bloggers, I realized that perhaps being proud of the fact that one month, I finally managed to keep my grocery spending under $200 was a little ridiculous. I'm just feeding myself! I shouldn't be spending $200 a month at the grocery store!
Enter YNAB. I decided to start right away at the end of January and entered all of my information. I couldn't believe how much money I had spent in some of the categories. Over $200 on cosmetics and toiletries? That's ridiculous. Especially when I also spent over $400 on plane tickets (for weddings that I very much want to attend, so the expense was worth it).
I decided to immediately start by working towards Rule 1. In the YNAB system, Rule 1 says that you have to stop living paycheck to paycheck. You should be living on last month's income. That's pretty daunting to think about, so the YNAB system helps out users who don't have that much money sitting in the bank. It teaches you to slowly start putting money away in a "buffer" until you have saved up an entire month's worth of expenses. (Note - not an entire month's income - just an entire month's expenses.)
I could have just done this by pulling money out of my savings account and been sitting pretty to start February with YNAB. That idea didn't sit well with me, so I decided to do it the hard way. I figured out what sort of "excess" I could pull at the end of January, and then started working on my buffer. I won't be there by the end of February, maybe not even by the end of March. But as other YNABers have said, sometimes it can take months to get a full buffer, but it is absolutely worth it.
I set up some budget categories for myself, and so far, I like the concept. I've bought groceries twice this month, and can clearly see how much money is left in my grocery budget. I think I can make it through the month on that. I can see that I've set aside half of the money I will need for the wedding gift I'm giving next month, and half of the money that I will need for the hotel stay. I like that I'm planning ahead.
My ultimate goal is to be able to plan ahead for all of those infrequent expenses, such as insurance payments and car maintenance. A $400 insurance payment is painful when it hits one month. Saving $67 a month for 6 month is much more doable.
I freely admit that I'm a bit of a geek when it comes to spreadsheets. While I have a strong distaste for all things math and numbers related, I love spreadsheets. I think that's part of the reason that I'm enjoying YNAB so much. I enter these numbers and I can see what I'm spending and where I can save and how I can plan ahead.
But even if you're not a spreadsheet person, this budget is a great way to get a handle on your spending and save more money than you thought you could.
To recap, my previous method of budgeting was "Put $X into savings at the beginning of the month. Then spend less than what's left because that is spending money." While that worked fine, I found myself in a sad situation mid-January when I had spent nearly all of the funds in my "spending money" account thanks to some once or twice yearly bills that I had forgotten about, plus a bit of overspending in, oh, just about every area. Sure, I didn't have to go into my savings account to pay the bills. But I had very little cushion in my spending account. I make a good living, so that wasn't something that should be happening.
Plus, after reading some accounts from other bloggers, I realized that perhaps being proud of the fact that one month, I finally managed to keep my grocery spending under $200 was a little ridiculous. I'm just feeding myself! I shouldn't be spending $200 a month at the grocery store!
Enter YNAB. I decided to start right away at the end of January and entered all of my information. I couldn't believe how much money I had spent in some of the categories. Over $200 on cosmetics and toiletries? That's ridiculous. Especially when I also spent over $400 on plane tickets (for weddings that I very much want to attend, so the expense was worth it).
I decided to immediately start by working towards Rule 1. In the YNAB system, Rule 1 says that you have to stop living paycheck to paycheck. You should be living on last month's income. That's pretty daunting to think about, so the YNAB system helps out users who don't have that much money sitting in the bank. It teaches you to slowly start putting money away in a "buffer" until you have saved up an entire month's worth of expenses. (Note - not an entire month's income - just an entire month's expenses.)
I could have just done this by pulling money out of my savings account and been sitting pretty to start February with YNAB. That idea didn't sit well with me, so I decided to do it the hard way. I figured out what sort of "excess" I could pull at the end of January, and then started working on my buffer. I won't be there by the end of February, maybe not even by the end of March. But as other YNABers have said, sometimes it can take months to get a full buffer, but it is absolutely worth it.
I set up some budget categories for myself, and so far, I like the concept. I've bought groceries twice this month, and can clearly see how much money is left in my grocery budget. I think I can make it through the month on that. I can see that I've set aside half of the money I will need for the wedding gift I'm giving next month, and half of the money that I will need for the hotel stay. I like that I'm planning ahead.
My ultimate goal is to be able to plan ahead for all of those infrequent expenses, such as insurance payments and car maintenance. A $400 insurance payment is painful when it hits one month. Saving $67 a month for 6 month is much more doable.
I freely admit that I'm a bit of a geek when it comes to spreadsheets. While I have a strong distaste for all things math and numbers related, I love spreadsheets. I think that's part of the reason that I'm enjoying YNAB so much. I enter these numbers and I can see what I'm spending and where I can save and how I can plan ahead.
But even if you're not a spreadsheet person, this budget is a great way to get a handle on your spending and save more money than you thought you could.
Thursday, January 24, 2008
YNAB? INAB!
Inspired by a few PF bloggers, I decided to take a look at my 2007 expenses as a whole. Of course, this is something I will be doing in the next few weeks when I finally sit down to do my taxes, but this time, the purpose was to see where my money was going. I feared that I was going to end up seeing huge amounts of money going towards restaurants and bookstores. I was pleasantly surprised. It wasn't that bad.
And then I remembered why. Until September of this year, I was a barely employed law student. I spent the entire summer holed up in my apartment, reading bar review books over and over. It all paid off - I am a licensed attorney. But as soon as I moved and started receiving paychecks and paid off the move, my spending got a little more... free.
I thought I was doing ok. I was contributing to my 401(k) (or rather, my TSP). I was putting money into a long term savings account. And I was spending less than I was making. All good things, right?
When I sat down and looked at where my money was going, I realized that I could be doing a lot better. I could be saving so much more money if I actually paid attention to where it was going, rather than just looking at the overall amount. And if I budgeted, I could plan for those larger yearly expenses, like insurance payments.
I have used Microsoft Money for years to track my income and expenses as well as my investments, and I tried using their budget program, but it just wasn't for me. It was too complex and too time-consuming to edit. I needed something much simpler. I tried an Excel Spreadsheet, and even that didn't go over too well. After a bit of research, I decided to try out YNAB. I purchased the Excel version rather than the standalone, because, well, I like spreadsheets.
I've just about finished setting it up, and am very hopeful that this will be what I need to get me on track. I'd like to be able to make larger deposits into my long term savings account. I'd like to be able to plan some large purchases and not feel like I'm delving into my monthly expense account. Mostly, though, I just need to stay accountable to myself. If I'm going to spend it, I need to track it, and I have to have any overages from this month affect what I can spend next month (and the same with savings).
I'll review YNAB in a few months and let everyone know what I think. So far, I'm excited about it!
And then I remembered why. Until September of this year, I was a barely employed law student. I spent the entire summer holed up in my apartment, reading bar review books over and over. It all paid off - I am a licensed attorney. But as soon as I moved and started receiving paychecks and paid off the move, my spending got a little more... free.
I thought I was doing ok. I was contributing to my 401(k) (or rather, my TSP). I was putting money into a long term savings account. And I was spending less than I was making. All good things, right?
When I sat down and looked at where my money was going, I realized that I could be doing a lot better. I could be saving so much more money if I actually paid attention to where it was going, rather than just looking at the overall amount. And if I budgeted, I could plan for those larger yearly expenses, like insurance payments.
I have used Microsoft Money for years to track my income and expenses as well as my investments, and I tried using their budget program, but it just wasn't for me. It was too complex and too time-consuming to edit. I needed something much simpler. I tried an Excel Spreadsheet, and even that didn't go over too well. After a bit of research, I decided to try out YNAB. I purchased the Excel version rather than the standalone, because, well, I like spreadsheets.
I've just about finished setting it up, and am very hopeful that this will be what I need to get me on track. I'd like to be able to make larger deposits into my long term savings account. I'd like to be able to plan some large purchases and not feel like I'm delving into my monthly expense account. Mostly, though, I just need to stay accountable to myself. If I'm going to spend it, I need to track it, and I have to have any overages from this month affect what I can spend next month (and the same with savings).
I'll review YNAB in a few months and let everyone know what I think. So far, I'm excited about it!
Friday, December 7, 2007
The Advertiser's Dream
Seven days into December, and so far, my spending plan is going well. I've managed to bring my lunch and my coffee into work every day (I can't say that it hurts that the weather is awful and the last thing I want to do is leave the office at lunch time). I've also managed to keep from buying anything online, and I have to admit, that has been the hardest part.
(Ok, that's a bit of a lie - I bought a second humidifier the other day. My apartment is so painfully dry that I was creating sparks everytime I touched just about anything. Sadly, the second humidifier has not completely solved the problem, so I might be looking for a third, high powered humidifier. If anyone has any recommendations, I'm all ears.)
I'm sure many of you have been getting inundated with advertising e-mails and catalogs during this holiday season. Most of the time, I cull through the catalogs, tossing most into the recycle bin and keeping a few, just to see what's inside. I'm not a catalog shopper though, so it's rare I actually see something and end up purchasing. I am, however, a total sucker for online ads. Free shipping? Free gift with purchase? Wow! Let me see what I might need to buy! I am the person they are targeting.
Most of the time, I just visit the website, realize that I don't actually need to spend the money, and close the browser window. As of late, I'm trying to not even look. But that's hard. Especially when the ad is for something I use. For example, the store where I buy my moisturizer was having a free gift/free shipping sale. Do I need moisturizer? No. But was I tempted to stock up just because of the free offers? Most definitely. Of course, I then reminded myself that my birthday is in January, and that store offers discounts during the month of your birthday, so I would save just as much by going into the store next month, when I am closer to needing a new tube of moisturizer. But I was still tempted.
I think this month is a good experiment for me. Seeing just how little I really can buy, and only making important purchases. Like the humidifier. Or the dinner I plan to buy for my friend tonight when we go out to celebrate her birthday.
I'm hoping to make it through the month with some significant savings. I am spending a week at my parents' house for Christmas, which limits my grocery spending, but on the other hand, I had to pay someone to care for my pets, so that negates that savings. I bought my plane ticket months ago, and won't have any other travel expenses. I do, however, have plans to go out to dinner a few times with various friends who I haven't seen in a while. To me, that's a worthwhile expense, but every time I have these purchasing urges, I have to remind myself that I need to save my money for those outings.
Another thing that helps me save is that as I mentioned, my birthday is next month, and when my family has asked me what sorts of gifts I would like, I have mentioned that I would love gift certificates to the local mall. I'm planning a shopping trip for the day after my birthday. I have trouble spending a large sum of money all in one shopping trip, so this plan is much less dangerous than it sounds. Plus it has made it easier to not spend money now. "Oh, yes, those shoes are cute, but I will just wait and buy them for my birthday." And the odds are good that by the time my birthday shopping day rolls around, I won't really "need" those shoes quite as much.
(Ok, that's a bit of a lie - I bought a second humidifier the other day. My apartment is so painfully dry that I was creating sparks everytime I touched just about anything. Sadly, the second humidifier has not completely solved the problem, so I might be looking for a third, high powered humidifier. If anyone has any recommendations, I'm all ears.)
I'm sure many of you have been getting inundated with advertising e-mails and catalogs during this holiday season. Most of the time, I cull through the catalogs, tossing most into the recycle bin and keeping a few, just to see what's inside. I'm not a catalog shopper though, so it's rare I actually see something and end up purchasing. I am, however, a total sucker for online ads. Free shipping? Free gift with purchase? Wow! Let me see what I might need to buy! I am the person they are targeting.
Most of the time, I just visit the website, realize that I don't actually need to spend the money, and close the browser window. As of late, I'm trying to not even look. But that's hard. Especially when the ad is for something I use. For example, the store where I buy my moisturizer was having a free gift/free shipping sale. Do I need moisturizer? No. But was I tempted to stock up just because of the free offers? Most definitely. Of course, I then reminded myself that my birthday is in January, and that store offers discounts during the month of your birthday, so I would save just as much by going into the store next month, when I am closer to needing a new tube of moisturizer. But I was still tempted.
I think this month is a good experiment for me. Seeing just how little I really can buy, and only making important purchases. Like the humidifier. Or the dinner I plan to buy for my friend tonight when we go out to celebrate her birthday.
I'm hoping to make it through the month with some significant savings. I am spending a week at my parents' house for Christmas, which limits my grocery spending, but on the other hand, I had to pay someone to care for my pets, so that negates that savings. I bought my plane ticket months ago, and won't have any other travel expenses. I do, however, have plans to go out to dinner a few times with various friends who I haven't seen in a while. To me, that's a worthwhile expense, but every time I have these purchasing urges, I have to remind myself that I need to save my money for those outings.
Another thing that helps me save is that as I mentioned, my birthday is next month, and when my family has asked me what sorts of gifts I would like, I have mentioned that I would love gift certificates to the local mall. I'm planning a shopping trip for the day after my birthday. I have trouble spending a large sum of money all in one shopping trip, so this plan is much less dangerous than it sounds. Plus it has made it easier to not spend money now. "Oh, yes, those shoes are cute, but I will just wait and buy them for my birthday." And the odds are good that by the time my birthday shopping day rolls around, I won't really "need" those shoes quite as much.
Saturday, December 1, 2007
November Net Worth Update (-2.16%)
Inspired by a few other bloggers, I have been keeping track of my net worth since August. And in September and October, I saw steady increases in my net worth, both due to growth in my investments as well as the fact that in September, I started a new job after finishing graduate school.
November, however, was a bit different. My net worth dropped 2.16% in November. It's actually a few hundred dollars less than it was in August, which is a bit disheartening. But I have a feeling that most people who invest and who track their net worth will see a drop this month. My investments fell by about 5% this month. They're already starting to come back, so I expect December will be a bit better.
However, November was also a month of excessive spending for me. As I mentioned earlier, I blew through my monthly spending budget. I didn't go into debt or have to go into any of my long term savings accounts, because I typically spend under budget and then save the excess for upcoming expenditures. But this did hurt my net worth. I also track my gift certificates in my net worth, and I spent $125 worth of gift certificates this month.
My goal for December is to keep my spending tight. This will be tough, with traveling home at Christmas. My plane ticket is purchased and paid for, but somehow, traveling still seems expensive. Additionally, I plan to meet up with some of my friends while I'm home, which means a few restaurant bills.
I realized that January will be a three paycheck month. Because I'm paid bi-weekly, there are a few months in the year where I receive three paychecks. My plan is to keep my budget as if I only get two paychecks in that month, and then put the third paycheck directly into my long-term savings account. It will be a good feeling to see that account balance go up so significantly.
November, however, was a bit different. My net worth dropped 2.16% in November. It's actually a few hundred dollars less than it was in August, which is a bit disheartening. But I have a feeling that most people who invest and who track their net worth will see a drop this month. My investments fell by about 5% this month. They're already starting to come back, so I expect December will be a bit better.
However, November was also a month of excessive spending for me. As I mentioned earlier, I blew through my monthly spending budget. I didn't go into debt or have to go into any of my long term savings accounts, because I typically spend under budget and then save the excess for upcoming expenditures. But this did hurt my net worth. I also track my gift certificates in my net worth, and I spent $125 worth of gift certificates this month.
My goal for December is to keep my spending tight. This will be tough, with traveling home at Christmas. My plane ticket is purchased and paid for, but somehow, traveling still seems expensive. Additionally, I plan to meet up with some of my friends while I'm home, which means a few restaurant bills.
I realized that January will be a three paycheck month. Because I'm paid bi-weekly, there are a few months in the year where I receive three paychecks. My plan is to keep my budget as if I only get two paychecks in that month, and then put the third paycheck directly into my long-term savings account. It will be a good feeling to see that account balance go up so significantly.
Sunday, November 25, 2007
Overdid it this month
So November isn't quite over yet, and already, I've blown through my monthly budget. My method of budgeting is pretty loose. I earn X dollars. Every month, I put Y dollars into long term savings (and make retirement account contributions). Everything left (let's call it Z dollars) goes into a short term savings account to be spent throughout the month, though the plan is always to have money left over so I'm increasing my savings even more.
November? I spent Z dollars. And then I spent more than Z dollars. Not by a lot, only about $50 or so, and technically, part of that was shipping some bar exam review materials to a friend who who bought the books off of me, and when she pays me, the check will be more than $50. But still. The spending was a little out of control this month. Of course, because I always try to have money left over at the end of the month, the extra money just comes from the money I didn't spend last month, so I didn't go into debt or have to delve into any of my long term savings accounts.
Regardless, it was definitely a wake-up call. Normally, I manage to stay well within my budget. While I put money into short term savings so I can spend over my monthly budget on occasion, that is designed for special expenses, like plane tickets, for example.
So what am I doing to fix this problem? First off, I printed out a categorized list of all my expenses for the month. A quick glance told me that a chunk of my spending came from gift purchases, both Christmas and birthday gifts. Ok, so that was unusual spending. But what else was there? I spent more than normal on groceries, and while a bit of that was purposeful stocking up, some of it was frivolous treats. So that's something to watch for December. I also spent a chunk of money on dining out. While I do budget for meals out with friends, I also noticed a number of meals that I picked up on the run. That's not something my budget or my waistline needs. Of course, it wasn't a large amount of money, but all those little things do add up. And last, but not least, I did some Black Friday shopping. Again, not much (I spent under $100), but it all adds up.
So the goal for December is to spend less than I normally spend, to truly watch what I'm buying and try to make smart choices. After all, my new savings plan starts in January. I need to get ready!
November? I spent Z dollars. And then I spent more than Z dollars. Not by a lot, only about $50 or so, and technically, part of that was shipping some bar exam review materials to a friend who who bought the books off of me, and when she pays me, the check will be more than $50. But still. The spending was a little out of control this month. Of course, because I always try to have money left over at the end of the month, the extra money just comes from the money I didn't spend last month, so I didn't go into debt or have to delve into any of my long term savings accounts.
Regardless, it was definitely a wake-up call. Normally, I manage to stay well within my budget. While I put money into short term savings so I can spend over my monthly budget on occasion, that is designed for special expenses, like plane tickets, for example.
So what am I doing to fix this problem? First off, I printed out a categorized list of all my expenses for the month. A quick glance told me that a chunk of my spending came from gift purchases, both Christmas and birthday gifts. Ok, so that was unusual spending. But what else was there? I spent more than normal on groceries, and while a bit of that was purposeful stocking up, some of it was frivolous treats. So that's something to watch for December. I also spent a chunk of money on dining out. While I do budget for meals out with friends, I also noticed a number of meals that I picked up on the run. That's not something my budget or my waistline needs. Of course, it wasn't a large amount of money, but all those little things do add up. And last, but not least, I did some Black Friday shopping. Again, not much (I spent under $100), but it all adds up.
So the goal for December is to spend less than I normally spend, to truly watch what I'm buying and try to make smart choices. After all, my new savings plan starts in January. I need to get ready!
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