August Round Up

The month of August was...interesting. We didn't stick to the budget very well, and it shows. Here are the results - $ actual ($ budget).

The good:

• Car insurance: $0.00 ($130.30) - we added a car to the insurance, and somehow they miscalculated how much we owed and were able to eliminate a month of payments
• Car service: $22.85 ($41) - only one oil change this month!
• Groceries: $297.10 ($300) - wooohoooo! under grocery budget!
• Electric: $134.74 ($150) - I'd like to get this even lower this month when the weather requires no A/C or heat

The bad:

• Tolls: $40.25 ($25) - two toll payments hit this month, so it should balance out next month
• Dining: $14.81 ($0) - eating out should be fun money, so this should probably go there
• Gifts given: $140.84 ($50) - the wedding present from July went through in August, so that accounts for most of this.
• Household: $91.66 ($30) - we spent too much at Target. I need to keep this in check and maybe add to the budget

The ugly:

• Gasoline: $537.54 ($400) - ouch, this hurts. September will be better as my husband will be traveling for 3 out of 4 weeks. Hopefully this will even out the two months.
• My income (both jobs): $2534.44 ($3547) - I knew that my commissions this month would be off, and I cut back on my hours at my part time job to enjoy the summer a little. I am already making changes to fix this, including picking up another day at the part time job.
• Fun money: $474.72 ($200) - no excuses. We had a lot of fun in August. We knew we were spending too much money and went about it recklessly. We didn't use a cash system and we went a little crazy. September is back to cash.
  
• Credit card payment: $2154 ($2746) - well, this is where the cut is made. Money spent other places comes away from our main focus: getting out of debt. It's disappointing to have a setback and fuels the fire to hit our goal in September.

There you have it! Some things are working, some need work. Considering we had more bad than good, I'm pretty happy we still hit 78% of our debt paydown goal. But I know if we want to get out of debt by March, we need to step it up.

Make More Money versus Spend Less

I was doing a little lighter reading and picked up Confessions of a Shopaholic by Sophie Kinsella. I'll write a review of it later, but I wanted to talk about one point it brings up.

The main character is in debt and receives the advice that there are two things to do about it: Make More Money or Spend Less. I got to thinking about which camp I fall into.

Although I work a second, part time job to make more money, I definitely lean toward spend less. I scrutinize every purchase I make, I cut coupons, I make lists and lists before I go to the store. I agonize over spending money on myself. I look for ways to cut back everywhere in the budget. I turn off the A/C if it's even remotely cool, and keep the temp at 62 degrees in the house during the winter. And that's when we're there and awake - it's set to 52 when we're gone at work.

My husband is the opposite - he stands firmly in Make-More-Money land. I think part of this is because he works for himself, so time more directly translates to money.

At the end of the day, you really need both to reach your financial goals. Spending less isn't going to help if less is still more than what you bring in. And one of the biggest issues many people face is increasing lifestyle with a higher paycheck.

One or the other just isn't enough, but everybody prefers one. Which camp are you in?

Junk Mail

I went to our mailbox today and picked up our mail from the past two days. There were two credit card statements, my bank statement, a Netflix and seven credit card offers. Between two people. In two days.

This is preposterous! Can you imagine how many credit cards I could open if I applied for all of them? If the past two days were average, I would receive 910 offers in a year. Not counting Saturdays.

They all have a special promotion, of course. Zero percent until 2008! Pre-approved for $10,000 limit! Free balance transfers! You lose a little credibility, however, when there are two envelopes - one addressed to me, one to my husband - each claiming that I met a special qualification. You mean living at this address?

So I go through them, every day, sorting out the real mail from the junk, taking out the actual applications and shredding them, throwing out the inserts. Today I got a little fed up. I don't want them anymore! I found a website, www.optoutprescreen.com, and removed my name from the list. They ask for your social security number, but I chose to leave that out.

Hopefully this makes a difference. I only put my name on the do not mail list, not my husband's name. The website states that it takes 5 days to process and then I should receive no more offers. I'll be counting how man I get and how many my husband gets to see how well this works, but I have high hopes. Aside from the annoyance, think of all the paper! And if you're easily tempted to open new accounts, this is a great way to remove the forbidden fruit.

We get what we deserve

After a long day at work, I like to go home and relax, put my feet up, watch some TV. Maybe pop open a beer and order some take-out. I've worked hard all day so I deserve it.

Wait a second, what was that? I deserve it? Why, exactly, do I deserve it? Because I did what everybody else does and went to work to earn my living. It's not like I'm breaking rocks or anything - I work at a desk job. Sure, there are days where I work my butt off and I tend to go easy on myself those nights. But on the average day, I still have energy to do something useful once I get home, be it work on our finances or throw in a load of laundry (while maybe watching a little TV).

I used to have an attitude like that toward sending. I deserved a vacation because I haven't been away in a while. I deserved new sandals (in every color) because my old one were a little worn out. I deserved a new bikini because I was going on my honeymoon. I deserved a hundred useless items because I was getting married.

Did I actually deserve any of these things? Probably not. I wanted them. There's nothing wrong with wanting a new pair of shoes or tiny starfish to tie to your wedding invitations. But my sense of entitlement led me to spending money I didn't have. I allowed myself to operate under the illusion that, despite the fact this was going on a credit card, it was justifiable. This contributed quite a bit to the credit card debt we're now working to get rid of. Not everything was frivolous spending and a great chunk of the debt went to legitimate expenditures. But there's definitely some that came from a sense of entitlement.

To break this habit, I used a bit of budgeting. Every month my husband and I each get $100 to spend however we want. We take our fun money out of the ATM and use it as we please. Once it's gone, it's gone. So now I can buy anything I want, whether I deserve it or not - as long as I keep it under $100/month.

In the end, I think I deserve to be in debt and I deserve to learn as much as I can throughout the struggle out of debt. I deserve to appreciate the differences between wants and needs and plan for future expenditures in advance. I deserve to have to suffer a little and feel some pain for all the mistakes in the past. But most of all, I deserve to come out ahead and emerge from all of this stronger, smarter and wealthier than before - because I am trying so hard to fix it.

Cheap Date #4 - Purgatory

Recently, my husband and I took a drive to Purgatory Chasm. It's a state park comprised of a trail formed between two rock walls. It's a really unique hike with a lot of caves and cool places to climb.
I've found that outdoors physical activities tend to be the easiest way to go on a cheap date. This suits me just fine as it's killing two birds with one stone - working out and spending time together. Except "killing two birds" makes it sound like I don't want to do either of those things.

Hopefully, we'll get a chance to check out a few more hiking trails before it gets too cold.

Cheap Date Idea

I was browsing some other finance blogs and saw a reference to Restaurant.com. I've never heard of this before, so I checked it out.

This website sells gift certificates for about 40% of what they're worth. Are you kidding me? I can get a $25 gift certificate for $10? That's amazing!

All you have to do is plug in your zip code and up pops a list of restaurants in your area that are partners with the website. Then you pick out which one you want, purchase the gift certificate, print it out and enjoy a meal for cheap!

I can't wait to try this for my Cheap Date series. Although some gift certificates have minimum purchases, it's still a great deal.

Disclaimer: I've never tried this, but there are testimonials on their website, so I have every belief that it's all legit.

It's Alive! My Dynamic Budget

In accordance with my new task list, I spent a couple of hours the other night revamping the budget. I haven't done this in a while, so it was overdue. As our life changes, our cash flow has to change as well. So I logged into Quicken and went over our income and expenses.

One of my favorite features of Quicken is the budget calculator. It allows you to categorize every expense and determine the average over the last year. By looking at the averages, I can see where we needed to tweak and where I need to spend better.

The big changes I made were:

• increased my husband's income from his last raise a few months ago (I told you the budget was out of date)
• increased our gas budget to $400/mo - previously $300
• increased my pt job income to $630/mo as I plan to pick up another day each week
• changed our car insurance to add the second car

After much back-and-forth, I decided to keep Netflix in the entertainment budget. We haven't been using it all that much recently, but my husband is traveling for 5 out of the next 6 weeks and I think I'm going to want some entertainment. Other than that, I made a few small tweaks and now it looks good to go!