Category Archives: Budget

Mayhem Is Coming – Why Emergency Funds Are Useful

When it rains, it pours…

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I feel like my life has sort of been a sitcom where everything breaks around me.

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First, my husband got a traffic citation for changing lanes when there was a solid line. In his defense, the lane he was on, turned into a right turn only lane without any warning. He turned on his blinker to get over, which the car behind him let him do, and then a cop stopped him because apparently that’s illegal.

Then, the snowacopolypse in Dallas came. On my way to work I slid into a curb. Damage, none. Although we have to get my tires realigned just in case.

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One week ago, I got a traffic citation because I started to turn left on a green yield sign when I should not have. I stopped as soon as I realized my subconscious had interpreted it as a left arrow. It was really dark and foggy, and apparently the car in front of me was a cop who then gave me first traffic citation ever. Then, on Wednesday morning I hit the accelerator too hard when I was coming out of the garage and took out my right side mirror. This stuff doesn’t happen to normal people right?

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So, our budget has been hit my traffic citations, replacing passenger mirrors on car, and some other small things that broke at the house. This month it was hard to protect our income from unexpected expenses.

It got me thinking. I’m grateful we have an emergency fund, car insurance, and house insurance. But what if we didn’t?

It would really suck. I do carry disability and life insurance through work, and we could survive on one paycheck, but many people don’t have these benefits and it could be devastating for them.

Which is why it’s important to establish an EMERGENCY FUND.

Now why doesn’t it rain money instead? That would be a lot more fun.

 

The Credit Card Statement You Want To Forget

Have you ever had a credit card statement period you just want to forget? Forget you spent that much money. Forget it felt so good to do awesome things that required boatloads of money. Forget you had to buy necessary things with boatloads of money.

The past month has been full of expenditures for our household. I bought our plane tickets to New Orleans, my plane ticket to Mexico, transportation from airport to cruise port, glasses, contacts, anniversary dinner and outings, new tire for hubby’s car, doctor copays (vision, primary, and chiropractic), and I’m sure I’m missing some other things.

We, also, went a little off track with our food spending. It seems like the more you spend, the harder it is to reign in the spending. Knowing our credit card statement was going to be high, only made us more carefree. Sort of like what’s the point in worrying about it.

The good thing is we had the savings for the expenditures.

Now, it’s time to take action. We gotta reign in the spending this next month. Less eating out, no going to the mall, and no extra expenditures.

Credit Card

Credit Card (Photo credit: 401(K) 2013)

Sadly, summer is almost over.

Link Love & Mentions

Jessica over at Mo’Money Mo’ Houses mentioned my post on our recent house shopping experience. Congratulate her on the new job!

Check out Nick’s guest post on Home Buying Tips for First Timers. In this market, just put it an offer if you like a house! You can always back out afterwards.

Mrs. Pop wrote about stretching your boundaries.

Tonya wrote about your money mindset. 

Have a great Tuesday!

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Psych: I decreased our Discover Credit Card Bill

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Our Discover Card Credit bill’s statement balance in the past couple of months:

Jan 20, 2013 – February 19, 2013: $2,110.73

February 20, 2013 – March 19, 2013: $1,686.30

March 20, 2013 – April 19, 2013: $1,531.33

Bam! Did you see that decrease?

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At the beginning of the 2013, I set out to decrease our bills. Most of our purchases go on our Discover Credit Card, and we only charge car and renter’s insurance on our other credit card ($220).

I, honestly, feel bad knowing we were spending over $3,000 a month on expenses, once you included rent, plus car payment, and any other expenses we paid with cash.

So, how did I cut $500 of expenses from our budget:

  1. Stop eating out – I am ashamed to report the amount of money we were spending on eating out. It probably came to $20-$30 a day. Gasp!!!
  2. Eat At Home – Cook lunches and dinner. We are now eating healthier, and the food is even pretty yummy. :) I actually am disappointed when I eat out because it makes me feel terrible afterwards. I still love me some Pei Wei.
  3. Cut cable – We never watch cable because we are just too busy. I get all my shows on Netflix and Hulu, and my husband now gets baseball from MLB.tv. Cable is not really a necessity anymore when you can find shows online for much cheaper. Our Netflix and Hulu monthly subscriptions add up to less than $20 per month. Savings $60 per month.
  4. Decrease our insurance bill – I took a defensive driving course that will decrease our monthly insurance cost by $10 over the next three years. Initial investment $25 for a course through I Drive Safely. I still need to negotiate better rates with my insurance company. I keep saying I will compare rates, but I still haven’t done it.
  5. Pay off debt- We paid off our car loan when we received our tax refund this year, which means we don’t have a car payment anymore.

So, there it is! Five simple ways to decrease your monthly expenses. My ideal budget is to spend $2,500 a month. Is it doable? I can try. Right now, our fixed expenses are below:

- Rent + water = $920  ( I can’t really decrease this amount. I kind of wished now we would have shopped for a lower monthly rent. Oh wait, we did, but I decided I wanted this apartment and location.)

- Car Insurance = $210 ( Greatest possibility for decrease! If I could negotiate a lower rate….if I could even save $50 a month, it would be $50 bucks more a month I could have for discretionary spending.)

- Electricity – $60 (This is the average, but it can be lower or higher)

- Internet – $50 (Stuck with U-Verse. I cannot have any other internet provider in my apartment).

- Braces – $126 (This will be an expense until the end of 2014).

- THE REST…Food, gasoline, fun, miscellaneous expenses. $1,134 left. This should be more than enough. Let’s see if we can make the next Discover bill less than the one before.

Yes, I’m frugal. So what? If you are interested in reading more frugal stories check out Mr. MMM’s post “Why Should I Be Frugal, Even When I’m Rich.”

You can, also, check out Tonya’s “Frugality: My New Normal.”

Are you looking at your monthly expenses? Are there bills you can decrease?

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We’re Young and Want To Enjoy Ourselves

Good morning readers! I hope everybody had a happy Thanksgiving.  We had a hectic holiday since we had family from out of town, and then went to visit family out of town, as well. It was fun, and  have some great memories! I really can’t believe Christmas is around the corner. With our vacation coming up, buying gifts, hosting family, visiting family, and god knows what else, money is and is going to be pretty tight. I honestly dread this phase of our lives where we are building up cash in the bank, but it doesn’t feel like we are making much progress. One of the reasons we are not making much progress is because we are young and just want to enjoy ourselves.

  • Xbox 360 bundle (Cost $225) plus extra batteries
  • Xbox controller 2 and Halo 4 ( Cost $105)
  • Xbox Madden 2013 (Cost $27)
  • Antonio Melani Purse (Cost $45)

Sadly, this mentality does not bode well with our pockets.

I want to see I am an awesome PF blogger and have my stuff together. I manage my household’s finances with an iron fist, and we are always saving money. The truth is I’m an awful PF blogger. Last time I kept up with my budget was in June! In June, I gave up. Yes, I gave up. We were bleeding so much money, I just couldn’t keep track of it all. I still can’t. Honestly, I’m not sure if I’m going to have enough time or motivation to track it completely in December. I want to but….ahhh…I’m a little lazy and money is stressing me out right now.

Another reason, we are having such trouble controlling our spending is because we are young and just really want to enjoy ourselves. Not to mention everybody thinks we have money, and sort of expects us to spend like we have money. I’m not going to lie, it has been pretty nice not having to stress whether our next paycheck is going to be enough to pay rent. But maybe we have gotten a little to lenient?  No maybe, we have. So what do we have to do to spend less? Eat out less, and cook at home. Convince my husband to stop buying energy drinks at the gas station, and finally ween him out of nicotine lozenges. I need to stop buying clothes, shoes, and/or purses. I need to shop groceries better. Sigh it sounds easier than it actually is.

If you are young and just starting out in the workforce, be aware that most of your paycheck will disappear with taxes, social security, medicaid, 401k, health insurance, and FSA contribution. Not to mention life will eat your paycheck with rent, utilities, sales tax, food, gas, snacks at the gas station, and other random stuff. Just saying.  BE PREPARED!

There are a couple things we are trying to do (mostly me) to control our finances:

  • Pay Ourselves First (Transferring money into savings account before it’s spent)
  • Eat at home more, plan our meals, eat healthier.
  • Track spending in spreadsheet
  • Consider writing net worth updates to stay accountable

How’s your spending?

 

Have You Ever Lowered Your Credit Card Limit?

I’m going against the trend here. I have decided that I want to lower our credit card limit. Right now our Discover Card, which is the credit card we use for most of our expenses, has a $2,500 credit line. So far, due to big purchases (contacts + tires for my Honda Civic) our bills have been pretty high >$2,000. I did a quick calculation and realized we have been going over budget by $1,000! My eyes nearly came out of my sockets.

See, I have been noticing quite a psychological dilemma, a trap I thought I was going to be immune to after reading all the horror stories of credit card debt! When we purchase something, instead of thinking we don’t have money to pay for it, I think we have money, there’s a $2500 limit. Sigh, this is really really bad!!!

I was scared of getting a credit card for this very reason. The rewards don’t matter, if we end up spending more money! So, for the next billing period I’m going to ask Discover to decrease our credit limit. I want to go extreme and say $1500 should be our max, but am thinking a limit between $1500 and $2000 (maybe $1750?) will be a good in between limit.

Have you noticed your spending go up when using a credit card?

There are certain positives of having a credit card. Discover has a great portal and offers pretty good rewards for a couple starting out in their financial journey. I like how they add 1 year warranty more to any electronics purchased with the card. We are, also, building up credit, which we will need in the future when we want to purchase a home. But it’s really important to watch your spending. Having a credit line, might make you feel more secure.

I have to say we have been a wee more lenient because we are now earning more. But I want us to avoid lifestyle inflation as much as possible. Here’s a shameless plug.

Become a Discover cardmember and you’ll get $50 Cashback Bonus with your 1st purchase within 3 mos. 

$500 of Not Planned Expenses

Hello peeps! Happy Friday! I’m so glad it’s the end of the week. I only have to get through today and then I’m free for the weekend. Although I have a lot of work to do and  I have to prep for several meetings on Monday, I’m probably going to have to take some work home.

This week has been pretty crazy busy. I don’t even remember where it went and I definitely haven’t had enough time to get everything done. I babysat on Tuesday and Wednesday we went to an event to support a friend of my hubby’s.The good news for the side hustle is that my client needs me to babysit the kids on a weekly basis on Tuesday and Wednesday from 6 to 10 pm. That’s extra moolah (cash) a week!

I, also, worked out 3X this week (Monday, Tuesday, and Thursday)! On Monday I did Tabala (30 min.) and PiYo (60 min.), on Tuesday I did Total Burn (40 min.), and Thursday I did PiYo again (60 min.). Finally, getting in the groove again. I need to start running again so I can burn even more calories!

How has your week been?

Unfortunately, as much as I have been trying to normalize our spending, it just has not been happening! :/ So far, we have about $500 of not planned expenses. My hubby had to buy contacts from Target ($381). The contacts will last for an entire year. We will get a reimbursement from our vision plan and FSA, but it’s probably going to take 4-6 weeks. Until then, it has to come out of our pockets. We, also, bought a couple of special event packages ($112). My company had an event where you buy a package of services. For example, I bought a package of 3 free oil changes at NTB for $31. I, also, bought a Texas Rangers package for $40 for 4 tickets. I bought bowling passes for $11. And paint balling passes for $30. We are planning to sell some of these to our friends. Not only do our friends get discounted prices because it’s way cheaper than to buy it at whole price, but we will be able to recoup the costs and go have some fun, as well. However, until friends pay for it, we have to eat the cost.

We still have some more expenses coming up.

  • Need to get new tires for my car
  • Buy books for my 2 graduate classes

I’m not going to lie. It feels a little tight right now. And I’m playing the timing game as to when the credit card bill is due. We have enough money to cover the bills, but it also means we won’t save as much.

It’s going to be interesting how August ends up in terms of expenses and savings. I have a target goal of $3000 to save, but I really hope we can save more. A robust target is $3500 and a stretch target is $4000.

Have a great weekend!!! What are you up to???

Financial Choices

Our savings account has been bleeding pretty heavily this year. Transferring into the grown up world is definitely not cheap! However, even after moving expenses, I managed to transfer $800 to our savings this month. We had $5,200 in our savings account, and we now have $6000. I am hoping to transfer some more money when I get my next paycheck in two weeks. There goes my money obsession. I am already thinking about my next paycheck, even though I just got paid on Friday. Oh brother! Hopefully, I can transfer $1000 into our savings in 2 weeks. :) My goal is to have our savings account up to $7000 by the end of July! :)

I am still not sure what’s reasonable here. July is going to be the experimental month. I have to see what our actual expenses are (goal is to stay under $2500), what our actual income is (after taxes, social security, medicare, and retirement contributions). We also want to start our new system: only use credit card for gas, fixed bills (cable, electricity, insurance, rent), use cash for weekly allowance and groceries.

We currently have a $5,300 car loan. The monthly payment on the car is $150. I still need a plan to tackle this loan. I was thinking of paying the $150 this month, and then bumping it up to $300 in August and there after. I could, also, start this month with the $300 payment. Crunching numbers….$300*6 = $1800…..$5300-$1800= $3500 left in loan plus whatever interest has been accrued. $3500 is definitely a less imposing number than $5300.

I wanted to pay off the loan in December, but I am not sure if this is doable? I don’t want to jeopardize our savings so quickly. I think we may need to keep this car loan for a little longer. I have to check the interest rate on the loan, as well. The married with debt took a whole new meaning. :/ -Plug for John at Married with Debt ;P-

I, also, have to consider I will be paying for tuition in the fall, which will be around $4000. My company will reimburse me after I finish the class, which will probably not be until January.

Any advice on this?

I, also, enrolled in my flexible benefits. I started my flexible spending account contribution at $250 per year. That’s $20 a month. I need to increase this contribution, but honestly have no idea to what? How did you calculate this?

So there it is, my crazy financial pie. There are a lot of what if’s and choices. I have to decide what’s the best option for our finances. I apologize for the disorganized manner in which I published, but that is how I feel right now….

Are you having similar dilemmas with your finances? Is it bad that I feel strapped for cash even though I have a healthy income coming in?

SavvyFinancialLatina

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