How am I doing -- February and March 2008

Happy Easter to everyone!!!!!

It's interesting how life changes. It seems that it was not long ago that our Easters were filled with visiting relatives, Sunday morning church service, Easter baskets and an Easter egg hunt, and of course, the big Easter dinner.

Both of my children work in food service. My son is a server at senior living facility and my daugter works at an upscale restaurant nearby. That means neither of them will be home today. The restaurant where my daugter works serves brunch, so my husband and I decided we will have brunch there today.

Anyway, I really want to talk about my finances during the last two months. February was a bittersweet month. I did mange to pay $835 on my credit card, which I am totally thrilled about. The sidebar includes the payments I've made in March too. I paid $1,370 to my credit card debt in February and March. I'm happy to say that my balance is in the single digits! On the other hand, I increased my overall debt by $3995, which is the amount of the loan I got to finance my car. That payment will be $97 per month.

My husband and I spent a lot of time on the weekends in February looking for a car. That means we spent a lot of time eating out. We probably spent $50-$60 every weekend eating out. Sometimes that would include bringing food home for C2 to eat. What's different is that we would pay cash--that's right, no credit card usage for dinners out.

My credit card paydown is my major definite purpose right now. My secondary goal is to be debt free by June 30, 2009. I'm a little off track of my goals right now. Especially with the addition of the car loan. My credit card has a variable rate, which right now is very low. I used the Bankrate calculator to help me figure out when it will be paid down to zero, based on my current interest rate. If I continue to pay $800 per month at the current interest rate, I'll have the credit card paid off in 13 months.

There are additional funds I could use to pay it down sooner, but we have a vacation planned. Rationally, I'd like to say to the family, no vacation, I'm paying down my debt. Emotionally, I think we should go on vacation because we haven't had a vacation in three years, and I think that a change of scenery will be a source of rejuvenation. It will also be interesting to see if we can go on vacation and stay on a cash basis. I think that when we return, I can add those funds to my debt reduction plan. I just increased the vacation fund to $150 per month. We're planning to go away at the beginning of August.

That's how I'm doing so far. Let's see what April brings.

How am I doing--January 2008

My husband set me up on MS Money. I spent most of this evening assigning categories to my entries. As old school as I am--you know, paper check register, manual recording of items--I can see the benefit in using a debit card or credit card for all purchases when using this program. Hopefully, with the February review I'll have good data. Right now in MS Money it looks like I overspent in January--there's a negative balance. I spent a lot, but I didn't overspend, and I paid cash for all of my purchases.

As you can see from the side bar, I reduced my credit card balance to $10,805. In January I paid $450 towards the balance. I'm starting to get that impatient feeling. I've been trying to figure out if I can double that in February. I'm not sure it's totally realistic.

Finally, I love interest income! My emergency fund has increased to $1,018.87. I owe it all to compounding.

The Bathroom Project

Our house is over 40 years old. We bought it from the original owners almost 10 years ago. We've worked on it a lot over the years, but it still needs a lot of work. About a year and a half ago, I began removing the wall paper in the master bathroom. I think it's been there since the house was built. It really has been a major production. The wall paper was ugly, and it was every where including the ceiling. Last summer, my husband and I finally got all of it down except for behind the toilet. He said he would have to remove the toilet in order to remove the remainder of the wallpaper. It sounded like a big project to me.

Anyway, I thought that since he was going to remove the toilet, why not remove the vanity and get a new one. The vanity is probably as old as the house too. One thing I did when I came up with this idea was to research what it would cost for a new vanity. I got out my tape measure and got the dimensions of the current vanity. I learned that each part of the vanity is a separate purchase: the faucet, the sink, the cabinet. I truly did not know that. I found something that I liked and decided that $400 was a reasonable amount to spend on the vanity ensemble.

Finally last weekend we went to purchase the vanity. I think we got a great deal. For about $400 we bought the sink and cabinet as a unit, a mirror, the faucet, and a light fixture. As you can imagine, I was very proud.

My husband made the bathroom his project of the week. On Monday I came home from work and he had ripped out the old vanity and taken out the toilet. This was very bad because now I'm thinking let's redo the whole thing! Let's put in a new floor and shower while we're at it! The toilet is relatively new, so that can stay. I'm just thinking that since the room is empty, it would be easier to complete it rather than put in the new vanity and then have to pull it out to put in a new floor down the road.

What's the issue? You know it. Money. Before we do any more, I want to know how much it's going to cost. Then I need to figure out how we're going to pay for it...with cash.

Poor Planning

On Thursday, C2 got his driver's license. He was ecstatic! He and his dad called to tell me the good news. C2 said, "Mom, I wanted to be at the commuter lot to pick you up as a surprise, but dad said I have to be on the insurance before I can drive alone."

Insurance? Oh, no! Our car insurance is going to increase! It's not like I didn't know this would happen. My husband and I have talked about it on and off at least since C2's 16th birthday. But did we ever call the insurance company to ask how much it would increase? Of course not. That would have made too much sense. Planning for the increase in our auto insurance is budgeting. Go figure?

I knew this was coming, but I just didn't see it coming. Does that make this a Ninja Bill?

How am I doing--December 2007

Somehow this month got away from me. I had planned to update every two weeks on pay day, but obviously that just didn't happen.

I consider December to be a successful month. In addition to my regular paychecks, I received my pay for the remaining sick days I had from the firm. That amount was $1,758. I used those funds to bring my emergency fund to $1000 ($375), pay for my tires ($300), cellphones and Christmas gifts for my children ($600). The remaining got lumped into the slush fund (checking account) and used for groceries and other expenses.

I did go over my planned $600 for Christmas spending. In the future I'm going to make a written list and place it in a prominent place where I can see it every day. I spent an additional $286 on Mary's ensemble ($57) a gift for my husband and additional gifts for C1 an C2 ($229).

I have been credit card use free for 161 days! I paid $450 on my credit card balance this month, bringing it down to $11,200!

This is still a work in progress. I think I'm going to separate what I consider fixed expenses (health insurance, hsa, commuter fee, 401K) from my every day expenses (groceries, gas, personal care, etc). The fixed expenses are deducted from my pay before taxes. I'm going to focus on my net pay and how I'm using it. I decided to reduce my 401K contribution from 3% to 1% until I reach my debt shackle release goal.

Happy New Year to all! Thanks for reading my blog and thanks for your comments. I love hearing from you! Please consider subscribing via the RSS feed or e-mail.

How am I doing--November 2007

I've now had one full month of recording income and expenses. This does take focus and commitment. I think I've said that before :-).

During the second half of November my expenses came to $1,550 and my income was $2,083. I spent $160 on new clothes for my new job. That was an unplanned expense. My biggest expense is definitely groceries. I lump a lot into that category including supplements and paper goods, hygiene products (soap, toothpaste, deodorant, etc.) and cleaning supplies. This category totaled $452. This means that I am averaging more per week on groceries than I thought. Up until now I thought I was averaging about $150 per week but in November I averaged $239 per week. I guess it pays to keep track.

As you can see from the side bar, I've made some progress. I was able to make the purchases for C2 and finally pay my husband back for the tires. I owe C2's purchases to my snowflaking job. That money goes into an account separate from my checking. I get very confused when I mix money. I've also listed my 2008 goal, which has now become part of my big goal to retire on December 31, 2017.

Later this week, when the interest posts on my credit card, I'll update for December. I did get my first paycheck from my new job. The net income is more and I received my sick pay from the firm.

Thanks, everyone, for keeping me accountable!

The Giving Tree

Yesterday at church the Giving Tree was up and decorated with tags that represent children from our less fortunate sister parish in the city. When my children came to church with me, I would encourage them to select a tag and use their money to purchase a gift for the child they selected. Since they no longer choose to come to church, I select the tags for them and encourage them to purchase a gift.

Well, yesterday there were additional tags on the tree. They looked nothing like the "give an unwrapped toy" tags. While I was supposed to be listening to the profound sermon, I found myself distracted by the new tags. I always sit in the first pew, directly in front of the tree. So I was staring intensely, trying to figure out what the new tags were. Then one tag that was partially opened jumped out at me. The inside read:

Mary Smith (not her real name) needs a coat, sweater, hat, and gloves size 10.

Can you feel my heart melting? How could I leave that tag on the tree now? Mary needs winter wear. I read it. I can't just ignore it. Now, I have to select Mary's tag and give her the gift of warmth this winter, don't I?

There should be no dilemma, should there? But there is. Should I just go to the big W or big T and purchase a nice ensemble for Mary? Or should I go all out and go to an upscale children's store and get something extra nice for Mary? My debt shackle release program tells me that I should research this, compare it to my budget and be sensible about my purchase. But my heart is telling me that poor little Mary has probably never had a high-end winter ensemble and even though I really shouldn't stretch my budget this way, she deserves it.

What should I do?????????????????????????

Those Expensive Frames

When my husband lost his job in September, we lost our benefits. That meant that I had to sign up through my work or we'd have to go on COBRA. When I met with the human resources director to go over the information she told me that vision was covered by the health insurance company. She's the director of human resources. She's part of the decision-making team for the firm. Who was I to question her or call the insurance company to confirm that this was good information?

Yesterday was my last day working at this firm, which means that we will be uninsured until December 1. I decided to get my eyes examined and get new glasses before leaving because it has been a number of years since I've been to the eye doctor. I went on Tuesday with the understanding that I wasn't going to have to pay anything.

Well, how wrong was I? While I was waiting to see the doctor, the eyeglasses sales person suggested that I pick out my frames, with her help, of course. So I start trying on frames. I wasn't paying attention to the prices of the frames. Then I picked the frames I liked the best. I'm still thinking that I'm not going to have to pay any money and that all of this is covered by my health insurance.

I was very wrong. None of my $688 frames, coating, and prescription is covered. In fact, the $135 eye exam itself isn't covered. The doctor's office is going to submit the bill to the insurance company. It's not going to matter. When I got home, I pulled out the paperwork, and it's not covered.

Then I thought to myself I should cancel the glasses, ask for the prescription and then go to the big W or the big T for frames. Here's where you know I am still in denial...but I really, really like the frames that I picked out. So I'm going to let this ride. I do have an HSA that I can use to pay for those expensive frames.

Becoming financially healthy is a challenge. I know now that I have to be sure of what my benefits are before I go to the doctor. The eye doctor said he wants me to have three tests. I made the young woman at the desk write down the names of these tests because when I get my insurance at my new job I'm going to ask if they are covered expenses. If they aren't covered, I'm going to call the doctor's office to see how much they cost so that I can budget the money.

Some frugal hacker I am. Will I ever learn?

A Picture is Worth 1000 Words

How true is that? I finally sat down and put together a budget. I asked my spouse to look at it, make changes, and plug in his numbers. He said that he would and then he told me he already had a budget on his msmoney. I said, "You never told me that." He said, "You never asked." Touche.

I have discovered that a budget is a work in progress. I compare it to fitness and weight loss. I'm going to have to constantly work at it. It's perpetual.

There are 12 expense categories on our spreadsheet, but only 8 apply to just me.

Debt
Food
Giving
Insurance
Investment
Personal
Savings
Transportation

Because I have been lax in tracking my spending, (all right, I've never tracked it) I took a look at my bank accout for October to plug in the figures. In October I spent approximately $2,284. My net income from my full-time job and my snowflaking job was $2,891. That means at the end of October I should have had $607 left over. I never saw it. Where is it??????? Where did it go??????? I'ts no wonder these debt shackles are so constricting.

Perhaps I should begin tracking my spending right now! What do you think?

My Snowflaking Job

At the beginning of October I started my snowflaking job. The purpose of the income from this job is to help release my debt shackles. The job is at a women's clothing store. I love clothes and I love to shop. So as you can imagine, working in this store is synonymous to my having chocolate chip cookies in my house. I used to buy them and say they were for my family, but I would always eat the bulk of them. I love chocolate chip cookies!

One of the things that I don't like about my snowflaking job is that to get the employee discount you have to have the store credit card and put the purchase on that card. So I think to myself, "No problem." Then I mentally remind myself of the purpose of this income.

Anyway, after the second weekend I decided that I needed two pairs of pants that I could wear with flat comfortable shoes because my feet hurt so bad after standing on them in heels all day on Saturday and Sunday. With my employee discount of 50% off each pair, I put $100 on that card. Do I have the cash in hand to pay it off right away? Of course not! The very next thought I had was that this is dangerous. I'm falling into my same old habits and behaviors! I definitely need to make some rules about using my employee discount. Especially since I have to use the store credit card in order to take advantage of it. Also, I think it makes sense to set aside 10-20% of my weekly income to use as a clothing allowance.

I guess I really need to focus on setting up a budget. Oh, all right. I'll make the commitment right now. I am going to set up a draft budget by the end of this weekend. Wish me luck!

Saturday's Hoarding Experience

First, I have to say that after I posted last week I did add items to my list before leaving for my excursion. So here is my original list and below it are the items I added. Also, I deleted some things from the list before I left home.

soap powder
bleach
woolite
dark woolite (someone told me that this stuff really works. We'll see) [out of stock]
oven cleaner (My oven is from 1966) [They didn't have the "fume free" so I didn't get anything]
dryer sheets
all purpose cleaner
dishwasher detergent
comet facial tissue
coffee filters
waxed paper
personal care items
juice forC2 [removed from list] I bought the juice on sale at the grocery store
cookies for spouse [removed from list] I accidentally bought these in the grocery store. These are definitely cheaper at the big "W".
Added to list
Gum (I chew way too much gum. It keeps me from eating :-))
Batteries (after I said that, I looked and really only had one battery left for my MP3 player)
Toothpaste

I must admit that I did have a momentary lapse where I walked through the pots and pans aisle because I need a skillet, but I only looked, touched and priced because it wasn't on the list.

No straying from the list meant I got out of there for less than $100! My grand total with tax was $76.90. Yipee!

Extraordinary Expenses

I've added a page element to my side bar entitled Extraordinary Expenses. They aren't really extraordinary expenses. They're just things that I have to remember to take care of within the next 4 to 8 weeks.

As you can see, with the exception of the tires for my car, they are all expenses related to C2. Believe it or not, several years ago I opened a savings account to set aside money for children related expenses that seemed to "pop up". I still have it and there is a little money in it for that purpose. With the exception of the Varsity jacket (that may be his Christmas present), I am considering asking C2 to contribute a portion of his income to the other items. He is 16 and has a job. He can help. Perhaps this will be the beginning of his lesson in personal finance.

As I was blog surfing this week, two really caught my eye. The first was Cynthia. She posted her family's budget. I still need to take the time to do that. I know it will be an eye opener for me. As will my debt to income ratio, which is probably super high. That's what Marie blogged about this week.