June Net Worth (-2.0%)

Across the board, it seems like PF bloggers who post their net worth are seeing a loss this month. My investment and retirement accounts dropped by 7.61%. It's a bit disheartening, to be honest, but it doesn't mean I'm going to change anything. For the most part, my investments are designed for the long haul. I won't need my retirement accounts for years, so I will continue my normal contributions.

I finally became eligible for the matching in my TSP this last pay period, so that was an exciting moment. It's almost like getting a 5% raise, if you think about it. Just a 5% raise that I can't touch for a number of years.

I showed a very solid increase in my cash accoints, which means that my plans to spend less and save more are going well. I do have a few big bills coming up this month (car insurance, for example), but because I've been using YNAB and setting aside a small amount of money every month in preparation for the bill, so I'm not concerned.

The plan for this month? Just keep on keeping on.

Whoops

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.

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.

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.

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.

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!

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.

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.

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.

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.

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!