The Weight of Money

Every time I run the budget numbers, I have to face the reality that I’m making poor choices. You’d think a month or two of doing this would prompt me to change habits, but it hasn’t. It’s all about food, actually, and eating out far more than I should. 75% of our dining out budget it my fault and its often just the daughter and I. We’re talking about $300/month that could be saved just by staying home and eating at home — we could really use an extra $300/month.

I need to do some serious personal reflection to figure out where this constant eating out obsession is coming from. It is basically a daily occurrence, usually between the hours from noon - 4:00 p.m. This month it could be contributed to the fact that a $50/month for groceries is a pathetic attempt at saving money — if I don’t feel like there is any food in the house, I go out to eat. The most likely reason is that I’ve been moderately depressed the past few months and haven’t been taking care of kitchen duties - like keeping the kitchen clean enough to cook in and grocery shopping.

Its time to get food spending back on track and also own up to the fact that I’m really hurting our family’s finances. Steps to fix this, off the top of my head, include:

1. Tell the partner about my eating-out spending — he knows that I eat out a lot, though I still try to obscure the fact and will give vauge answers about whether we’ve eaten or not. Also, because I manage the budget numbers, he usually doesn’t really see just how much I’ve spent eating out or doesn’t realize how it impacts our budget. This isn’t a good pattern to be in and it certainly doesn’t lend to a trusting, honest relationship that we try to maintain. And it adds to the guilt I feel about eating out in the first place.

2. Make a food plan for the week — I do this about once every other month. It really helps us keep spending in check and the house stocked with food for a week or two. However, I always dread this task, even though it can be so simple. So each week, by grocery shopping day, I must make a plan for that week. If I don’t have one, I need to just pick a week from my Saving Dinner cookbook and use that.

3. Make a grocery list and go shopping — This may sound silly, but the grocery store is the most stressful place in the world to me. For many years I avoided it altogether (difficult to do as a single parent). The past several years, I’ve mostly gotten over it, but I still drag my feet when it comes time to go shopping. Also, when were short on funds, it’s very difficult for me to go and spend money on food when I feel like we don’t really have it. Of course, not doing that just means I’ll send twice as much, or more, eating out when the cupboards are bare.

4. Make sure there are easy lunch and snack items available - I’m home all day, most days, so I need to be sure that I don’t just buy food for dinner. If I can’t instantly find lunch in the kitchen, I’ll run out and get something. The majority of my spending is on lunch or pre-dinner meals (around 3pm).

5. Find a way to hold myself accountable — I’m still not sure about how to do this. Perhaps I’ll just post a weekly report on how often we’ve eaten out (including how much was spent) and whether is was a family meal or just me avoiding the kitchen.

6. Keep snacks in the car at all times — I just bought several snack items that I can keep in my car for the moments that I’m suddenly starving. Rarely are my trips away from the house that a snack won’t tide me over until we get home. The partner has always been good at this and it’s time I follow his lead.

I expect to see positive progress in April that will encourage me to make even more progress in the following months. I also expect to see a slight increase in our grocery spending as I’ll probably buy extra convenience foods that will make eating at home easier until it’s a settled pattern.

Reading other personal finance sites is starting to paint a rather ominous airs about our near future. These ramblings have been going on for a while now and seem to be hitting near crescendo effect. I’ll admit that the more I hear, my nerves prickle just a little. I try not to get too worked up over popular media reports, especially because of their sensationalist nature, but money is a very touchy subject and the thought of tough, lean times is a little disconcerting.

All the doom and gloom feelings aren’t just from popular reports regurgitated by bloggers, I’m facing the commentary from the partner which leads to even more ominous second-hand observations. The partner works at a small start-up firm that is quickly approaching that magical sink or swim timeout-point for most new companies, and the waters seem to be pretty deep right now. Their recent financial struggles and budget trimmings has made me nervous. At first, I was confident that the partner’s position wasn’t in jeopardy because his position is essential to the company in terms of getting in more money — they can’t pursue contracts if they don’t have the engineers to develop items. I felt that all the other staff — overhead, prototyping, and production were in a much more vulnerable position because, while they’re needed to complete contracts, they don’t help bring them in.

Things have been quiet on his work front, but he still brings home occasional comments that send my panic sensors flying. The biggest concern is that the new contracts are running dry. In fact, there are no new contracts waiting for current contracts to build before progress can continue — this is a scary situation as many current contracts are reaching the end of their terms. The partner’s primary project for the past few years ends this month, after that, there is nothing waiting on his desk to take his attention. Also, he has made comment that he’s been getting help from other engineers eager for something to work on… a year ago that wouldn’t have happened as everyone was so buried in their tasks.

The other major stressor is that the partner’s supervisor will be leaving the company in a few months. This is a serious job-security blow because this person has made the past few years of new company growth bearable and is also, from my limited view point, the partner’s biggest advocate in the workplace. While I like the partner’s company, I find myself liking it a lot less when I picture it without this person present because he seems to help balance the overall energy of the company. Losing him will have a huge impact on my comfort level with the partner’s continued employment, and probably with his as well.

So, things are felling a little sticky at the moment and I’m getting a little nervous. Our continuing financial struggles aren’t helping, though I’m constantly just repeating how it’s just a temporary house-poor adjustment that will be a faint memory in a year or so (please, don’t burst my bubble on that one little, though not guaranteed, comfort I have).

Update: After writing this article and before posting it, the partner and I had a long talk about these concerns and for once I feel like we’re actually on the same page in terms of his employment prospects. It looks like he’s feeling motivated to make some steps, though tentative, at checking out greener pastures - what a relief from my perspective.

So, boston gal posted something about 2.25% interest rates — and it got me wondering at what point does it become worthwhile to refinance the house? What if you’re currently locked into a 3 year no-refinance clause that will cost you about $7,500 to break? I’m sure there is still a point that it becomes worthwhile, though whether or not we could qualify for the rate at which it becomes beneficial is a different story.

Possible or not, it still seems like a good number to know. Looking at the online calculator comparing 7.35% to 2.25% showed savings of about $600/month and that’d make each month much easier on us - but it’d take more than a year of that type of savings to recoup closing and penalty cost. Hmm, guess I should take the time and learn what that number is and what the out of pocket impact would be.

Edited to add: I did get the part that boston gal’s 2.25% rate was hypothetical mortgage rate — it just got me thinking that I don’t know at what rate it is worthwhile to consider refinancing our house and that is something I think responsible home owners should know.

Every once in a while a feeling or emotion about knocks me over and I want to run and act on it. The most common one is to take every penny we have and pay off our credit cards. Any time a chunk of money comes in, that is exactly what I want to do with it and occasionally I will. But, since we’ve bit into savings a lot lately for various things (car repairs are killing us), there isn’t really much there ship off to reduce our debt. But, I know that there are a few decent sized checks coming out way in the next few months (thanks to taxes mostly and October usually bring child support arrears). The second that money touches my hand, I want to hand it over to our credit card companies.

While everyone loves to talk about how important it is to pay off debt and how interest rates paid on debt is higher than what you’re probably getting in savings, they still seem to miss a major aspect of having savings — stuff happens! And when stuff happens, it sure helps me sleep better knowing that we can pay for it. If I took every dime we had in savings and chopped out our debt, I’d be left with an extra $300 a month and nothing in the bank to cover the next car repair, boiler break down, or more serious emergency. Sure, we could charge most any emergency that comes up, but then we’d be right back in that vicious cycle of debt. Also, at $300 a month, it’d take us almost a year just to put $3,000 back into savings. And of course, that assumes we don’t have somewhere else for that money to go.

Yeah, pay yourself first should always happen, but how do you work that out when what comes in doesn’t covered the required-to-go-out bills (and that doesn’t include things like food and gas)? Do you still throw a few hundred into your emergency fund when you’re not making enough to cover everything else? Doesn’t that emergency fund contribution just get drug out the next month when ends aren’t meeting?

I know I’m rambling a bit, call it the emotional stress of working to get finances back in order when you feel like you’ve done almost all you can to get back on top. We can’t trim anything else from our budget and I’m bringing in as much extra as I can — it just isn’t enough and it leaves me a little flustered and frustrated. Those checks that are coming later this year won’t be making it to our creditors, in fact, they’ll probably be here just in time to get us back to 0 and give us a few more months to get things back in balance. All I can do is hope July gets here with that the raise we’re counting on happens — but thats not sounds financial planning either.

Counting chicks before they hatched is always a dangerous financial plan. I can’t help thinking about the financial crunch the company has been experiencing and worrying that this might be a year were a COL raise may be all thats dished out. I have no reason, other than reasonable planning, to think this might happen, but it worries me just the same. And for planning purposes, it makes more sense to assume that worse case scenario than to hope for a better than average raise due to company concerns about losing valuable employees that are becoming less and less enchanted with their positions (and pay).

While our finances are improving slowly, we’re still struggling. Last month we were only over by $1,000 versus the $3,000 we were over in December and January. So, I’ve decided to take some pretty serious and drastic cuts to help us get back on the right side of $0 a little faster. A friend of mine just worked up a $40 weekly budget for her family and I decided to take that a few steps further — $50 for the entire month’s of groceries.

I went through our entire pantry and freezer stores and inventoried all of our food. I sat down with the list and worked out at least 27 dinners and plans for lunch and breakfast. Spending just $50 on a month’s worth of food is only possible because we have a well stocked kitchen and will only need a few items to fill out our menu. We’ll be lacking our usual fresh produce, but have enough frozen and canned goods to make up for it.

Shopping List:

• 2 gallons milk
• yogurt
• half n half
• 2 lb cheese
• 2 lb ground meat
• sugar
• lettuce
• cucumber
• potatoes
• carrots
• apples
• bananas

Breakfast: Biggest cost saver is that there will be no cold cereal this month.

• oatmeal
• pancakes
• waffles
• eggs
• no cold cereal

Meals: Nothing fancy and all meat portions will be small (as they should be).

• chicken, rice, broccoli (2x)
• chicken, corn, green beans, pasta (2x)
• falafel, pita, carrots (1x)
• pork fried rice (2x)
• pork chops, baked potatoes, broccoli (1x)
• chicken fried rice (2x)
• spaghetti, salad (2x)
• steak, baked potatoes, broccoli (1x)
• chicken noodle soup, salad (1x)
• ham and cheese omelets, biscuits (1x)
• chicken, peas, ramen noodles (2x)
• chicken parmeasan, salad (2x)
• chicken burritos (1x)
• tacos (1x)
• bean soup, salad (1x)
• potato soup, salad (1x)
• ham, cheese, broccoli quiche (1x)
• english muffin pizzas (2x)
• leftovers/sandwiches/fend for yourself (~2x)

Lunches: Most meals provide leftovers for lunch.

• leftovers
• sandwiches
• soup
• ravioli
• carrots
• apples
• bananas
• muffins

Desserts: This is the rare treat, not a daily menu item.

• Cake (we need to use leftover icing up)
• peach crisp from canned or frozen peaches

Other items of consideration: we’re feeding a family of three, we make our own bread for each meals, and all of our meat portions are smaller than the typical American serving (ie. serving sizes are appropriately sized). If we make this work, I can make a costco trip next month and re-stock essentials that we’ll be working through this month.

The partner’s work started a matching 401K program about a year or so ago and that prompted the partner to finally open an account. We’ve been putting in just enough to get the full match from the company even though we know we need to put in much more if retirement is ever going to be possible. Here is one area where a head in the sand approach is bad news and we know it (no one said personal finance bloggers always make the best financial decisions).

So, we just got notice that his company is going to stop doing this. The company has been struggling financially lately which puts a little extra stress on us because job security is something we’ve taken for granted. But there have been many changes at the company in the past few months that gave us the impression that they were finally getting things under control. To drop this program, out of the blue, implies to me that the situation is more serious than we assumed. The company has been laying off lots of folks lately — mostly a corrective action since they really hired too many people last year — the cuts have been to more overhead type positions (one was their first Chief Financial/Operating Officer that they hired just 6 months prior). We’re still pretty confident that cuts to the engineering department are highly unlikely since they need them to get and fill new contracts and bring in the money. I think the partner will be updating his resume, just in case.

Last night the partner asked if he should pull back his contributions for a while to give us a bit more cash on hand. It seems like a easy solution to help with our financial crunch, but we also both agreed that we’re too behind in retirement contributions to consider reducing them at this time. So, we’re losing “free” money from the company, but will still keep contributing anyways and hope to increase those contributions later this year. Having a few extra dollars today isn’t going to offset the pain we’ll feel if retirement is not a possibility.