So, we had kind of a happy surprise this month. August is the first month since Project Money started (and first month since Owen was born) that I had a normal paycheck. Remember how I started contributing 3% of my check each month to my 401K back in June? Since I also changed my W-4 exemptions, my check was actually over $100 BIGGER this month, even after the 401K came out. This really made me think about how much I’ve missed out over the past few years. I was so afraid to contribute because I thought I’d be hurting for that money every month. Now I didn’t even miss it! I am glad that both Willie and I are now saving for a happy retirement.
Even though my checks are back to normal now, next month will bring more change because we’ll have to pay another $300 more for daycare from then on. After a couple months of that, hopefully we’ll be at our new “normal” and stay there for a while. I’m watching our account balances closely this month to practice having that extra money come out. It’s just too bad we didn’t have more than one month to practice. This is something I wish we had done better before buying our house or before Owen was born. Like I mentioned in one of our earlier blog entries, if we had pretended like we were already paying that mortgage or daycare, or buying diapers and formula, we could have put all that “extra” money to good use back then.
July turned out to be kind of a rough month for us. That air conditioning repair bill came in the mail (luckily, most of it was covered by the home warranty that was included when we purchased our house), and one of our cats, Milo, ended up needing to go the vet unexpectedly. Adding that in on a month when we were already short on income kind of hurt and I feel like we didn’t make as much progress as we would have liked to. This is one thing our coach, Mike, has talked to us about — saving for these kinds of things so we have a “emergency” fund when the unexpected happens. That way, we can avoid putting them on the credit card.
Reading the other Project Money blogs this month also got us thinking about how we wish we would have taken control of our finances sooner. It doesn’t cost anything to meet with someone at Summit (or even most other credit unions, I’m guessing) and get advice on how you can better manage your money. Why did we wait this long? Why didn’t we consolidate our credit card debt earlier?
We also can’t help but be angry with ourselves about why we didn’t do better at saving before. When we met four years ago, we were making a lot less money, but we did OK. Then I got a new job and a salary increase to go with it. We intended to keep living like we were before my new job and put that extra money in savings for the down payment on our house - or we could have used it to pay off some of that debt. But somehow, the money was always gone at the end of the month. Looking back, I wish I had arranged for that extra income to be automatically transferred to a savings account when my check was deposited, before I ever knew it was there. If we had done that, we could have put a lot more down on our house and not needed the extra down payment assistance loan. We could probably be paying a few hundred dollars less per month on our mortgage, not to mention what we would have saved on interest. It’s amazing that now we pay almost twice what our rent was before we bought the house and still manage to pay all our other bills, yet when we were living in that apartment, it always seemed like we didn’t have enough money. We would have seemed rich back then if we had been able to hang on to the equivalent of an extra rent payment and put it to use!
So hopefully, if you are thinking about buying a house or you are getting a raise, you’ll take my advice and save, save, save so you’re better off later and try to use that extra salary towards something useful. And by all means, go talk to someone at your credit union to get advice about improving your financial situation. Why wait?
I’ve got food on my mind this week. Our $50 dining out budget was blown by the fourth of July, and it’s been hard trying not to give in to temptation since then.
I never realized how many fast food commercials are out there until we were trying to eat at home instead of dining out so often. Suddenly, I find myself salivating at mention of a five-dollar foot long, cheesy bacon beef and potato burrito, or bacon cheddar angus burger. With all those TV commercials, billboards, and radio ads, it’s easy to see why we find ourselves wanting to eat out so often. And with trying to limit ourselves, it’s been kind of like dieting. When you know you’re not supposed to have that piece of chocolate cake, you want it even more. And if you’re not careful, you might just go crazy and eat the whole darn cake.
To help Willie and I stay on track with our plans to eat at home, I’ve made a list of reasons why people eat out and possible solutions/alternatives for each situation:
1. Wanting to try a new menu item. Blame this on all those commercials you see. My advice on this is just to wait on it— give it a couple days or even weeks and see if you’re still thinking about the new menu item. If you are, go ahead and get it. Just make sure you account for it in your budget.
2. To celebrate a special occasion, like a birthday, promotion, or anniversary. What kind of celebration is complete without food? Sometimes you have to just go along if friends or family invite you out to celebrate. But if taking your friend out for her birthday is your gift to her (because you can never think of what else to buy, like me) try taking her out to do something else, like going to a museum, concert, or festival. As far as anniversaries go, what’s better than having a romantic dinner at home? (Hint hint, Willie). :)
3. To socialize with friends or family. It seems like whenever people get together, food is always involved in some way. I suppose that makes sense given that we all typically eat three times a day (plus snacks). Maybe instead of going out to a restaurant, you could have a cookout or potluck at home. My girl friends and I used to get together once a month for girls dinner in. We’d take turns hosting and each month was a different theme, like Mexican, fondue, or tapas. Each person would bring a different part of the meal and we got to try lots of tasty things without ever spending a whole lot.
4. Convenience/time crunch. It’s easy to justify going through a drive through when you’re busy rushing from work to pick up the kids to a softball game to home, sometimes with errands in between. I’ve never tried this myself, but maybe you could prepare a make-ahead grab n’ go meal the night before, like sandwiches or wraps. Stick them in the fridge or a cooler and pick them up if you stop home in between.
5. Craving something in particular. I’ve tried to manage cravings by trying to make my favorite fast food or restaurant items at home. You can find “copy cat” cookbooks or many websites with recipes for famous restaurant items, like Red Lobster cheddar bay biscuits and Cinnabons. Other things are pretty easy to replicate if they have simple ingredients (like crispy chicken snack wraps).
6. Traveling or going out of town. Depending on where you’re going or how long you’re going to be away, you can try to bring food with you when you’re on the go. Pack a cooler of sandwiches, sodas, and snacks for on the road. If you’re going to be staying somewhere for several days and have a kitchen, you could pick up groceries when you get there to make meals in. Of course if you don’t have anywhere to store or prepare food, you’ll have to dine out, so just make sure you’re budgeting for it in advance.
7. Eating out just for something to do. Sometimes going out to a restaurant is an event in and of itself and it’s nice just to get away every once in a while. One alternative to this might be to take a picnic lunch or dinner to a park.
8. Date night. People have been doing the whole dinner and a movie thing for so long that they’re even offering discounts at certain restaurants if you show your movie ticket from the same day now. (I never did understand this, though— you should get the discount at the movies for showing your dinner bill since you normally eat first, right?) Suggestions for this might be to go on that picnic I mentioned above, or just eat at home and then go out and do other date night activities that don’t involve food.
9. Tradition as part of other activities. A lot of time food goes with other things, like pizza and beer after bowling, hot dogs at a baseball game, or brunch after church on Sundays. It’s hard to break tradition, but perhaps you could cut back to every other week so that it takes up less of the food budget.
Now that I’ve thought this through, hopefully the next time the urge to grab something out comes up, I’ll be able to refer to my list and come up with a better solution for us. And if we do end up eating out, we’ll try to savor each bite and do better next time.
It’s almost the end of our first month of Project Money. One of our biggest goals for saving money was to reduce our spending on dining out to just $50 per month. I was a little unsure of meeting this goal since we both went back to work (and back to our busy schedules) two weeks ago, but Willie and I have been able to stick to our budget (give or take a few dollars) and are ending the month on track. Eating at home is not as difficult as it seems if you keep the fridge stocked with groceries and plan meals for the week.
We are a little worried about how July will go because my paycheck will be significantly smaller from some unpaid time off at the end of my maternity leave. We have money left over from this month to cover it, but we’re trying not to dip into it if we don’t have to. We also have a few extra expenses to account for: It will be our first full month of paying for daycare—definitely something we need to adjust to since it will be a regular monthly expense for the next five years. We’ll also need to pay the deductible from our homeowner’s insurance to get our air conditioner fixed when the bill comes. Let’s just hope it keeps working and we don’t have to pay to replace it this year!
Another extra is that we’d like to buy plants to finish the landscaping we started in our yard. Right now the front of the house that was formerly home to some bushes my husband despised is just a big patch of dirt. At least we’re saving some money because we’re doing everything ourselves, although if I could afford it, I’d happily pass off the weed pulling, root digging, and dealing with nasty bugs to someone else! We haven’t really priced out how much it will cost as we’re not sure what plants we want to get, but one thing I’ve heard is that you can save money by buying the smaller plants which in a short period of time will grow just as big as the bigger ones that cost more. We’ll let you know how it turns out.
This is a sad week for Willie and me because we both have to go back to work full-time after several weeks off for maternity/paternity leave. It will definitely be hard being away from Owen all day and a challenge to see what happens with our spending now that we’ll be back into our busy routines. Hopefully we’ll continue to build on what we’ve learned up to this point and stay on track.
Here are the things we’re doing so far based on recommendations from our coach, Mike:
We’re adjusting our federal tax withholdings. Now that we have Owen, we can claim additional exemptions, which means we’ll have a little bit extra in our paychecks each month since we’re not having so much taken out for taxes. Yes, claiming fewer exemptions would mean we’d get a bigger check back for our tax refund, but that’s money we’d be lending the government all year that they’re not paying us interest for.
We're contributing to our 401k accounts. Willie already contributes a small percentage to his each pay period, but I wasn’t putting anything into my 401k because I was worried that I’d need that money to pay bills each month. To make it less painful, I’m starting with 3% of my salary each month. Since it comes out pre-tax, hopefully I won’t miss it as much. Plus, it really is a good way to save since my employer will match a certain percentage of what I put in. Yay for free money!
We consolidated a good portion of our debt by transferring balances from our three credit cards and a personal loan to a new Summit credit card that has a lower fixed rate until the balance is paid off. This will reduce our minimum monthly payment by about $130 or so and we’ll save money on interest, too. I also think this will be helpful because we’ll have a better sense of what we owe since it’s all in one place. When you have multiple credit card balances, it’s easy to miss the big picture of how much you really owe because you’re seeing the smaller balances on each one instead of the big number when everything is added up.
We’re revisiting that TV bill I mentioned a couple weeks ago and planning to cut out the premium movie channels for a savings of about $35 a month, plus investigating other TV/internet options to see if we can get a better deal.
We’re also eating at home more and spending less on meals out. Sadly, we had been spending between $200 and $300 a month on eating out. My original goal was to cut spending on meals out by 50%, but Mike gave us a goal of spending $50 or less. I figure, depending on where we go, that will buy between one and five meals for the two of us. So far this month, we’ve spent money on two meals out (I gave into the craving for tacos after a late softball game!), but we’ve made everything else at home. I’ve discovered that I’m actually a decent cook and I kind of enjoy it. Let’s hope we can keep it up now that we are both going back to work this week!
We have to give Mike credit for coming up with so many great ideas, but we’ve also managed to do a few extra things on our own:
We clipped coupons! We hadn’t really given much thought to this before since Willie and I already shop at stores that typically have the lowest prices in town, but even the lowest prices can still be reduced with coupons! Between the coupons we used on groceries, automotive service, and baby items, we’ve saved $48.55 so far this month! Tip: check out www.coupons.com for printable grocery coupons for items you might buy regularly.
I went shopping for clothes - in my dresser drawers! This might not work for everyone, but I finally went through my old clothes and to my surprise, found three pairs of pre-pregnancy jeans that fit again. (I attribute this largely to the fact that we’ve been skipping meals out. Savings: 3 x the cost of new jeans.
I signed up for a library card. We’re doing some work in our yard and after much research, I found a step-by-step landscaping book online that I really wanted to buy. I had it in my shopping cart when I had an epiphany: maybe I could get it from the library. Sure enough, I found it through the online library catalog. Savings: $16.47.
We’re learning that being responsible and making our money work for us isn’t just making a few one-time changes, it’s a new way of thinking. I’m excited to see what great ideas we come up with for next time!
Today officially marks the beginning of our journey with Project Money. Even though Willie and I have been aware of changes we need to make in our financial situation for some time now, we haven’t done it. Now that we’re participating in this program we can no longer make excuses for ourselves for not saving more, spending less or paying more off our debt. I think this is just what we need to get ourselves on the right track, especially now that we have a newborn son, Owen, and will need to come up with money for daycare for him in the coming months.
We are still working on finalizing things with our coach, Mike, but so far our plans are to:
Consolidate some of our debt to lower our monthly payments and save money on interest
Develop a savings plan since we haven’t been regularly putting money into savings (despite our good intentions to do so)
Look at places where we can reduce spending, whether it’s to save on other monthly expenses or cut out unnecessary costs.
When we were reviewing our monthly expenditures to prepare for this, I was amazed to see we were spending between $200 and $300 a month on dining out. That could buy a lot of groceries! And the $5 a month we initially spent on movie channels for our TV bill is now $40 since the promotional period ran out—I didn’t realize how much it all adds up. I think being aware of what things really cost is a great first step in identifying where changes can be made.
As I made Hamburger Helper for dinner the other night, I realized it cost us about $3 for the whole meal instead of the $15 to $20 we might have spent on fast food. I’m already planning to make weekly menus so we know what we’re eating each night instead of falling back on picking something up on the way home. Hopefully this will also help us stick to a shopping list at the grocery store. Sure, we will miss the tacos and the cheeseburgers, but maybe I’ll finally dust off those cookbooks in the kitchen! We are looking forward to seeing how well we can do and making positive changes in how we handle our money.
