The Weight of Money

These are all new year resolution-type goals. I want them in place before the year begins because I’m all about fresh beginnings and starting over at crucial moments. So, I’ll leave skip the dollarbill hoop jumping out this month and focus on preparing for the new year.

Goal: Reorganize budget categories to reflect current spending.
I’m frustrated with the available budget categories. In August, I developed the current list of categories but have found them inadequate over the past three months. Also, I need to customize YNAB to suit our needs instead of customizing our needs to suit YNAB.

Now, customizing this budget is taking more work than expected. There are several crucial elements in the spreadsheet that I cannot find. This places me at a standstill and I’m adamant that I will figure it out before the new year.

Goal: Develop a written plan for debt reduction.
We’re reducing our credit card debt at, what feels to be, a haphazard approach. When there is extra money, it gets thrown at the debt. Arbitrarily, I decide to round up minimum payments by $50 increments. What I want is a detailed plan that shows where we are at and where we’ll be at with our current methods and spending (argh).

Goal: Develop a written plan for savings.
This applies to the debt reduction plan. Since the house purchase adventure will resume in a few months, we need to build our savings up to be even more prepared for round two.

Last month, I set myself up to succeed in reaching our financial goals and I did just that.

Goal: Reduce Credit Card debt by 30%
Accomplished: Well, sort of. We put $5,500+ toward the credit cards as planned. However, there were a couple card purchases that may offset this 30% decrease somewhat. Most notably are the plant tickets for my grandma’s birthday party in January. So, once the bills come in, we’ll see what impact that will have and whether or not we’ll have the cash to just cover the additional purchases.

Goal: Begin funding the daughter’s saving account.
Accomplished: I did just that.

Goal: Transfer all personal bill pay accounts to joint account.
Accomplished: Done.

Goal: Set up dentist appointments for all family members.
Accomplished: The partner and I went to the dentist and used up the remaining FSA funds. We didn’t need to take the daughter and she isn’t due to an appointment anyway — it will be better to take her next year on the next FSA allocation.

I’m very proud of meeting these goals and it makes me feel like I can stretch to reach some more challenging goals next month. Now, just to figure out what they are going to be and the holiday brainwashing may mean that staying within budget is a major goal.

Overall I’m pleased with the budget this month.

Dining out is still too high, but we’re working on that. Basically, until my job situation improves, this is probably just the reality of our life.

Groceries were exceptionally high because of a trip to costco. Also, I don’t take the time to pick out household purchases from the food purchases, so it all looks like a big food budget when we go to costco.

Gasoline is one of the better categories since we spent less than $150 on gas (we originally budgeted about $300 for gas). My commuting to work and general exhaustion in the evenings has reduced my fill ups to once a month. For some reason, the partner’s gas usage is also down, along with a significant decrease in gasoline prices. Last month, we spend $281.79 on gas.

Medical was high because of a dentist appointment — just what we needed to use up the rest of the FSA.

Cell phone has been ridiculously high because I’ve been going over my plan for several months in a row. I finally got a clue, realized I wasn’t decreasing my talk time, and upgraded my plan. Argh. I also eliminated my text messaging plan because I never use it anymore.

Savings did not get deposited in November and the $300 will be added to the December deposit.

Next month I’ll try to look at the ebay progress that the partner is making. I think we’re finally agreeing on what to do with the money which is only coming in at about $500 month right now. It’ll probably end up in savings until we get the house under way and then go toward paying off debt once that is in order.
There may be some changes based on credit card purchases once the bills arrive. I’m actually looking forward to seeing one of the bill this month.

Just like the consistent evaluation of spending helps me stay within budget, I need to check in on my monthly goals in order to meet them.

So far, I’m on track for funding the daughter’s saving account. I’ve already made a deposit of $130 and am planning another similar deposit later this month.

For transferring monthly bill payments, I’ve taken care of the biggest one – the cell phone. I still need to get one more bill moved over.

Dentist appointments have been set for the partner and I. I wasn’t going to make one for myself, but a tooth pain that I’ve been having today encouraged me to make that call. We’ll prolly put the daughter’s appointment off until next year.

Drastic debt reduction hasn’t happened, yet. Payment is scheduled for the last days in November assuming deposits and transfers are made accordingly. I want to increase the planned payment to $6,000 because it sounds so much better than $5,500. The partner isn’t so excited about rounding up for the sake of it — he thinks it is too much work to make it happen. I’m willing to work for it and am going to push myself, and our budget, to make it happen - just for the sake of it.
It isn’t scheduled to happen until the last days of the month, as long as there are no delays in transfers and processing. I’m even working extra hard to see if I can come up with another $500 just to make it an even $6,000 payment.  The partner thinks that rounding up for the sake of it isn’t worth the effort needed to make it happen – I’m still gonna try for it anyways.

I’m taking a different approach for my goals this month. I’m feeling the need to set myself up to succeed and am basically setting goals I’m positive we will reach. Yes, this means it’ll just work out to a little ego stroking and comforting pats on the back come December – but that’s just what I need right now.

Goal: Reduce Credit Card debt by 30%.
This is a pretty lofty goal but I’ve made it a priority for November 2006. We’ll start off the holiday season with a gift to ourselves of more than $5,500 in CC debt reduction.

Goal: Begin funding the daughter’s savings account.
I have been planning to start putting all child support received for the daughter into her online savings account for several months now. Time to get past planning and start acting.

Goal: Transfer all personal bill pay accounts to joint account.
I have several auto-pay bills that come out of my personal account. I need to move those to my joint account asap.

Goal: Set up dentist appointments for all family members.
We have some FSA funds leftover, mostly because of a several month vacation from maintenance medications, which need to be used by December 31. We figure a family trip to the dentist will take care of that for us.

There, four (impressive) goals that I feel are guaranteed success.

For families on tight holiday budgets – either by circumstance or choice – it can be difficult to balance children’s wants with budgeted spending. I’ve developed some suggestions that might help.

The youngest children are still establishing their sense of what gift giving/receiving is and are often less put off by fewer gifts. Suggestion: pretty much any toy, any price, and any number will do. If only we could all hold on to this phase throughout the years of gift giving (note: many families do hold onto this phase).

Young school age children have often established a baseline of expectations, often set by peers and media, and may have an “I want more” mentality. Suggestion: to combat the higher expectations of these children, you can go for quantity versus quality. Dollar stores offer a lot of items that will help children with the need to open another gift without putting a large strain on the wallet. However, you must be careful about this method – it could set you up for overspending in later years.

Older school age children have a balance of wanting a fair share of gifts but also want better things. Suggestion: This is the point where the previous strategy backfires. They now have established an expectation of many gifts and now want better gifts. Many times you can just explain how the better gifts mean fewer gifts. Little stocking stuffers also go over well with this group and helps balance expectations of quantity and quality.

Teens are often more focused on the bigger ticket or main interest gifts and less concerned with how much they get. Suggestion: establish a per-child budget and buy what you can of what they want.

Now, the above suggestions are on the slippery slope of producing consumerism drones. Each of these suggestions should include honest discussions about the meaning of giving and tied into family values. In our family, gifts only come twice a year and we use those opportunities to meet some of the year-long wishing for things and to maintain the holiday magic for the daughter.

Also, some suggestions for how to outline conversations about holiday spending include:

Phrase budgeted spending in a positive light. Say “Think about a couple of things you really want this year and we’ll see what we can get” versus “We’re really tight on cash this year, so there won’t be as many presents to open”.

Educate children about why you establish a holiday spending plan – you can explain your financial goals and talk about how creating budgets helps you reach those goals. Again, the point is to avoid giving the impression that your goals are creating a loss for them, i.e. “We look forward to enjoying holiday season while keeping our goals in mind” versus “We’re trying to buy a house so we’re not going to buy many presents.”

October was the first fully funded month of combined finances and I’m still working out how to best share this information. I may have to create an alternate system as I get more comfortable with YNAB budgeting program – it has advantages and disadvantages that I’m still working through.

Our monthly budget is much more detailed than what is shown. I’ve displayed some basic categories and categories showing activity. As our income streams increase, I’ll break out the income from salary, ebay sales, etc.

One thing to note is that YNAB forces you to budget all of your income. If you overspend in a category, it doesn’t reduce your current available funds (as I would expect), but instead reduces next month’s available funds. Also, if you underspend, your current available funds remain the same and that category has a surplus of funds next month. Because we’re getting used to this system, our budget was reworked several times to allocate all of the income and to adjust to overspending/underspending. So what you’re seeing is more a representation of what we spent and the results of reworking the budget to match actual spending instead of a true reflection of how well we budgeted. I may have to rework this system if I find we constantly have to rework the budget at the end of the month.

General Comments: Savings were intentionally unfunded. Due to early payments in September, only two credit cards were included in October spending – November will get an additional payment and, hopefully, some found money spending. Gas budget was originally set for $400 – commuting allowed me to have one tank of gas last for over a month. Eating out was under the original $200 budget but more than my $150 goal.

Spending: We underspent by $64.07 for October 2006!!!

Staying in budget requires consistent reflection — monthly goals should receive the same consideration. For next month, I’ll make a more dedicated effort to check my progress throughout the month.Goal: Remain within the new household budget.
Progress: This one is hard to pin down because we’re getting used to using YNAB and you must allocate all of your income into categories. Because of this and because of some over and under spending, I reallocated (“rebudgeted”) funds to make sure the numbers worked out correctly. I guess the positive thing is that we under spent by a few hundred and have $300 leftover to up the credit card payments for next month.

Goal: Set up individual contribution to company retirement account.
Progress: I met and passed this goal. I had to enter an amount versus a percentage on my contribution form. Instead of deducting the odd number 10% worked out to bi-monthly, I rounded the number up. My retirement contributions are actually 10.59% of my annual salary (works out to an extra $200 a year).

Goal: Support the partner’s move to contributing to his 401K plan.
Progress: I didn’t really meet this goal. I tried to offer support but just last night, when he was asking some questions about his options, I just frowned, commented I was too tired to respond, and went to bed. It has been a very tiring month.

Goal: Continue reading financial books and sharing them with the partner.
Progress: Same as above, I spent too much time catching up on sleep. I do have notes for an upcoming book review compiled, but nothing that is really of any help for the partner.

Goal: Limit dining out to no more than $100.
Progress: I thought that we were going to make it, for a few weeks at least. What pushed us over was one expensive meal ($50+) and the last week of the month. However, I’d say that spending only $180 on eating out is pretty damn impressive for us!!!
Goal: Max budget of $200 for upcoming camping/event weekend.
Progress: Wow, I really thought I’d set this budget for $0. Because, really, why do I need to buy things for this trip every single time when I’ve been doing it for more than 5 years, at least twice a year! Despite this, we went over budget by $40 – this was predicated by poor planning and neglecting to bring cold and wet weather clothing and buying a brand new tent.

Goal: Establish debt repayment plan and savings investing schedule by Oct. 30.
Progress: I forgot about this goal. I’ve kinda established a basic debt reduction plan, but since reducing our interest rates, I’m going to need to adjust it accordingly.

There are many things people can do to stay on budget. If you have a budget or spending plan already planned out, the best thing you can do is check in with it during the month. Don’t wait until the month is coming to a close; check your budget progress every week or every other week.

I have been lax on my budgeting lately and it is having a negative impact this month. I have not entered any budget numbers this month at all and it has been a busy month. It started with a week at camp, which should have been no-spend days but was quite the opposite, and went through the weeks of moving. I should have been watching where my money was going, but I convinced myself that I just didn’t have the time.

So, I’ve now run the numbers for this month and I am way off budget. By several hundred dollars off budget and I still haven’t accounted for this weekend’s spending or the spending at the grocery store that I am about to do. If I had taken 10 minutes, two weeks ago, I would have known that I’d already spent too much in frivolous categories and had already put a hefty ding in my dining out budget. If I had done this, I would have made some better financial choices throughout the rest of the month. But, I didn’t and now I am looking at numbers that are making me cringe.

Soon, this month will end and the partner and I will start on our financial journey together. I am somewhat disappointed that this move follows a month of overspending and poor budget control. That just isn’t the encouragement and foundation I was to build from. But, I know that I am good at staying on track and that the circumstances of this month lent themselves to poor money managements – something that won’t be happening again anytime soon (I’m far to practical to say “won’t ever happen again”).

Wow, July went really fast. Maybe because it started with wedding madness or because there was simply so much going on. It is requiring extra discipline to focus and reflect on my budget for July because I’m already all wrapped up in August’s spending and needs. I thought July would be the last month of my individual budget, but since the partner and I still haven’t joined finances and since I was out of town for a week, we’ll wait until September to join forces, I mean, money.

Dining Out - $134.48
Since this is usually a sore spot, I’ll start with it. I’ve seen another decrease in what I am spending eating out — hurrah!. I am very excited about this. Hopefully, this trend will continue.

Transportaion - $111.95
A slight dip in transportation costs. However, I’m betting that will go right back up this month since I’ve made several 70 mile drives to camp and back and there is still one more to make before the month is over. Gas prices have also shot up and I actually paid $3.17 a gallon recently, that is the highest I have paid in many, many months and I did not fill up. So, I need to stop and get gas asap and will still be paying over $3.00 a gallon to do so.

Orthodontist - $100
This has been a recurring bill for over a year now and, huzzah, it will no longer be. This is the bill I spoke of here when describing a bill pay error. I expect that I will get this money back sometime this month, hopefully, since I was not able to stop payment on it without getting charged a fee.

DD - $257.96
This is an unusual month to have such high expenses for the daughter. $31 spent is actually her money — she turned in all her coins from her piggy jar and had to put 50% in her ING account (which first gets deposited into my account which is included under deposits). $100 also went into her ING savings because I felt like transferring more than just $31. It wasn’t planned, so that did take a small bite out of my budget. Also, I had to make her a mattress for camp and that end up costing $116.49 in materials — anyone who still thinks that sewing things yourself is cheaper, is mistaken. That $116 should really be listed under “procrastination” because I could have saved money if I had ordered a mattress several week prior to camp.

Overall, I’m pleased with my budget, even if I did go over somewhat. The mattress purchase and the moving supplies were what really pushed me over my budget.