finances


One…we bew our budget when we bought our new cars. 

Two…we didn’t take into account insurance

Three…budget has to be revamped entirely.

Four…budget has no room left in it now. For anything. This is not good!

Five…hubby and I agreed to deposit all of our paychecks into our joint account and transfer a small “allowance” into each of our personal accounts for things like lunch, gas, etc. Hubby decided to just have 66% of his check deposited to joint account and keep 33% rather than set up a transfer. That was fine. This agreement was made in January. His checks or even 66% are not being direct deposited to the joint account. He just deposits a set amount when he remembers, or more accurately, when I remind him 3 times! this week he got paid for overtime. I though whoohoo we will have extra money to cover things. I was wrong. Extra money stayed in his personal account. He is also avoiding putting the money in our newly set up joint savings. I’m beggining to lose my patience. We have had this conversation 5,000 times. I even offered to not have a joint account and we split the bills 50/50. He said no, he wanted a joint account. What is the deal with his hesitation! I’m ready to scream, but it’s so difficult to ask him about his money when I’ve always been so independent. I just want to know where things stand. I want to have one decision we both follow through on!

We sponsor a child through the Colombianitos Foundation.

Colombianitos

Colombianitos

 

She is provided with school tuition, school supplies, and lunch daily. She is also a part of theirs Goals for Life Program, which all sponsored kids participate in. The program aims at keeping children off the streets and providing them with life skills through soccer academies. They are found in the lowest income areas of Colombia where the children are at the highest risk. All for only $25 a month which is debited from my account automatically and tax deductible!

As part of being a sponsor, we get letters from our kid and we are allowed to send her gifts on Christmas and her birthday. I contacted the local program coordinator and asked if the Christmas gifts could be sent late, she said that would be fine. I also got information on the family, the home situation, and her size. I found out that she has 3 youger sisters. All in all it is 4 girls ages 12, 11, 8, and 6. They were recently moved into a home provided by the municipality as their home was destroyed in a mud slide. 

My original plan was to send some housewares such as sheets, etc. However, it became to difficult to find out what they really needed. So, last night I hit up Wal-Mart.  I got some great deals for the kids. I chose to buy for all 4 girls because even though I only sponsor one of them, I would hate to imagine one of the girls getting gifts and not the other 3. I tried toi buyt things they needed that might be difficult for their parents to buy. things that I remembered thinking were “so cool” at around 11. I also wanted something that all 4 girls would enjoy. I bought them school notebooks at 97 cents each. I bought them a pack of about 25 pens at about $1 and 25 pencils with the cool earaser topper and grippies and sharpener the pack cost $2. I also bought them the cool gel glitter pens that was about $2 too (not a bargain, but it has the “cool” factor). I got a 75 pack of colored pencils along with professional sketch books and the professional earasers for the older girls to practice drawing (total of about $10) and construction paper 100 pack of crayolas and kiddie sketch book for the little ones (total of about $7) I also bought them a calculator for $1. Then came the fun stuff: a pack of 10 puzzles (100 – 500 pieces) for $10, Uno Cards for $5 and Dominoes for $5. As I walked out of the store, I walked by the girls section and noticed the clearance section. I found shorts for each of them for $1 and t-shirts for $3! I also picked up really cute bookbags for $15, $10, $10, and $7 for each kid and two jumpropes that were $1 each. All in all I spent about $100. I will also spend about $40 to ship it. My original total budget for this was $100, but both my husband and I know that when it comes to gifts and charity, I always blow the budget.

I am excited to know that I will have provided these 4 girls with clothing, school supplies, and games for $100. TO me, that is a bargain, specially considering that it will be tax deductible.  Shipping will be between $40 – $50, just because shipping to Colombia is expensive, but I’ll deduct it from the taxes and make peace with that. 

If you think you cannot afford to give to charity, just add up your trips to the coffeeshop or the bar. Personally, I spend $100 monthly on Starbucks (and that’s after cutting back) and about $75 on liquor a month. So, if you can cut that in half, you would have more than enough to Sponsor a Child. Everytime you want that extra cup of coffee, you can just think that you are feeding and educating a child that would otherwise not have that opportunity.

BUDGET

My husband and I had agreed to get together at the end of each month to create our budget for the next month. I have to admit that we’ve been slacking and we generally wind up doing it in the middle of the month, which is crazy because it means we’ve spent half the month without a budget. Anyhow, last night I began to organize my office and realized that we hadn’t sat down to do our budget for February. This happens to be monumentally important because we are currently looking to buy new cars and although we knew how much we had a s a down payment and about how much we could afford monthly, we had not sat down to look at the hard numbers. It turns out we have a nice chunk of change left over at the end of the month, so that takes a little of the stress away where we thought adding two car payments to the budget would be tightening thing up a lot. 

Also, it seems that each month that we are married there are more and more line items in our budget. I know that I used to always forget a few line items when I did my single budget. I think it was almost intentional because I knew those were things I should try not to spend money on. However, it seems like there is a lot of extra in our budget now (ie: gym, coffee shops, alcohol, dates, etc). At the same time, it seems as though we have a nice cash flow coming in form random places. 

REFI

I wish I had a whole post about our refi. However, I’ve let my husband handle this entirely. He bought our house last year before we were married, so he went through the entire process alone (we had broken up at the time). He talked with his dad about the car buying process and fears of budget strains and his dad suggested we refinance at a lower rate to find extra money each month. My husband called up the same lady who did his original mortgage loan and apparently this is a perfect time to refi. Depending on when we finish the process our rate will drop between 1.5 to 2 points, which is awesome. This will bring us a savings of approximately $80/month. Also, she found a different PMI company which will crop our PMI cost by $20/month. All in all we will save about $100/month with the refi. We originally wanted to refi with a non-HFA loan company so that we would be able to do away with the PMI alltogether and according to my husband that would drop the mortgage about $100/month. However, our credit isn’t exactly there yet, so we have had to go with a new HFA loan. We keep all of the house docments together, so the coument gathering process consisted of him grabbing a file folder out of the safe and cleaning his room to find two other documents — pretty painless. 

CARS

New cars. Ok, I drive a Honda Civic which my dad gave me as a graduation gift 5 years ago. However, that car is committed to my sister when she gets her license. My car that I bought is a ten year old Taurus. My husband drove a Mazda Tribute. Two months ago he was in an accident and totalled the car. At that point we got the insurance money and decided to get him a new car. In the meantime he drove my Taurus. We got $6K for his car. He spent about $500 to fix up the Taurus and wanted to use $3K to buy a used car. My first instict was that he would buy a crappy car that would cost us a bundle in repairs and maintenance in the long run. I nixed that idea and suggested he use the $3K as down payment on a quality used car. He wasn’t quite convinced (even though the Taurus I bought 3 years back for $1.8K had already eaten up arond $3K). Then he drove the Taurus to the office one Saturday morning and I had to pick him up because the alternator (we think) went out. Since my sister is close to getting her license soon, we decided we needed to get cars for both he and I now. At that point we decided to use the $6K as down payment for two quality used cars. My first idea wa to get another Civic or a Corolla and call it a day. He, however, wanted a nice car. He wanted an Acura. Iargued that that would be too much car for us. We don’t need large interiors, heated leather seats or wood grain panels. But he insisted. Then he had me test drive one. I fell in love! so then we started to try to stretch the original budget to buy two used Acuras. As I looked at cars in the Acura price range, I found a used Lexus and went to drive it. I ell in love even more! So it stands now, we are looking to buy a used Acura and a used Lexus both hopefully with under $50K miles and both at around $14,900 hopefully less than that. It is possible, we just have to wait on the right deal and pounce on it.

Well now that the budget is all worked out, I just have to post it on Google Docs and then next week we can get started on tax prep! fun times.

It’s a brand new year and the Blog has a brand new look. Not to mention we have a brand new awesome president! Sorry, I can’t help myself. 

My Goals for the Year:

  • Organize my home office
  • Eliminate my debt (except cars and house)
  • Buy new cars
  • Increase income 
  • Start School again!
  • Create building blocks for my marriage (ie: better communication, date nights, etc)
  • Blog more frequently
  • Create a savings plan
  • Create a retirement plan
  • Begin depositing in my sister’s college fund

The End. Let’s see how I do.

We’ve heard more news from the financial sector in the past two months than we’ve ever paid attention to before. Here are some lessons we can all take from the recent news

AIG Bailout

AIG announced that it was going under about one month. This was due to overly risky investments and bad assets.

Lesson: Be very careful with your investments. Risky investments can bring higher returns, but they can also be lost, thus they are riskier. when investing, be sure to draw a line to how much you’re willing to risk.

We, the taxpayers, gave them an $85 billion loan.

Lesson: Don’t make or accept loans that may not be repaid.

AIG took their tax executives on an extravagant vacation.

Lessons:  When you take out a loan, someone else is trusting you with their money. If you get a loan from family/friends, realize that it is their hard-earned money that you are being a steward of and thus, it should be used wisely and repaid responsibly. If you take a loan from a bank, realize that you are borrowing money from the bank’s depositors, just like gov’t loans come from taxpayers. The bank compiles our deposits and loans them out and that is why we get interest rates on our savings accounts. So, again, use loans wisely, you are borrowing from everyday people and your choices should be made with a sense of gravity.

Also, if you are in financial trouble, you should tighten your belt and use every extra penny to get out of debt and back on your feet and to plan for your future. Don’t spend money frivolously. That’s likely how you got in this mess to begin with.

If you loan someone money, and you feel that they are not being good stewards of your money, you have every right to recall that loan. It goes back to how much risk you’re willing to put your money under. It’s your money, you can loan it out, but you can also ask for it back if you think that the road the borrower is on will guarantee that you will never see your money again.

The Gov’t gave AIG another 37.8 billion

Lessons:  When someone else is screwing around with your money. DON’T GIVE THEM ANYMORE!

Don’t borrow more money if your existing loans are already weighing you down!

Sheriff Halts Evictions

This Sheriff In Illinois has chosen to no longer carry out evictions.

Skipping past the right/wrong and legal/illegal discussion, the lesson is that in these tough times, we need to rally around one another as communities and help one another out.

Passive Dad gives some great ideas to help friends facing a foreclosure

Other ideas are:

  • offering to babysit every now and then if you’re home while they work — it will cut down on their daycare expenses.
  • Pass along good advice/finds/coupons. I always forward Sale email or interesting articles to a group of friends.
  • Split bulk buying trips. If your household won’t use 25lbs. of rice and neither will theirs, you can go to Sam’s or Costco together, split the 25lb. bag and you both save money.

Learning to Live with Less

These IReporters are cutting back

Re-evaluate what your needs vs. your wants are. Cut out things you could do without in your life. Whether or not you’re experiencing financial trouble right now, it’s time to reduce debt, and save money. You never know what tomorrow will bring, and that’s all too true today.

Cut back where you can and put your money away or cut away at your debt. Be as wise as you can be with the money you have.

over at My Dollar Plan , Madison asked yesterday about weaknesses and how much we spend on them. Some of the things she mentioned I never really looked at as weakness (coffee, lunches out) but if you figure how much you spend on those things, you soon realize weakness or luxuries are the right words for them. They generally don’t figure in to your budget, because you never plan to spend extra money on th little things, but in the end, you wind up spending it. That’s how I have blown my budget in the past.

Here are some suggestions to still keep your weaknesses/luxuries and stay within your budget.

1. identify your weakness. You can’t tackle a problem if you don’t know what it is.

2. Figure out how much you’re spending per month on them. This alone will encourage you to scale down.

3. Work it into your budget, so needless spending doesn’t blow your budget later.

4. Come up with ways to scale down

5. Compare how much you’ve saved. Was it worth it? Can you scale down more? Have you developed new weaknesses?

Here are some of my own weaknesses and how I have managed them:

  • Expense Tracking
    • Sometimes, we’re too lazy to track our spending habits. Sometimes we don’t even want to know! However, when you see in black and white (or orange, green, and red) how much you’re spending per month and per year and on what, you would be surprised, and if you’re like me, ashamed of yourself. For example, you might be shocked to find out how much you’ve spent on coffee, or eating out, or buying “stuff”. You may think you live within your means, but you may find out you really don’t. I make $30K a year pre-tax. I just looked and YTD, I have spent $40K. that’s $10K over my means! Granted, I had savings, I got married, moved to a new house, etc.
    • Expense tracking can be a time-consuming and daunting task. I suggest a program like Excel, or my favorite, Mint, which is free, online, and does all of the tracking for you.
  • Coffee
    • Ok, when I first started this job, I loved it because it’s in a high-rise that has a Starbucks in the lobby.  Apparently I loved it a little too much because  wound up spending about $200 in the first month just at Starbucks. I used Mint to track my spending and when I clicked on Starbucks, I wanted to keel over. I resolved right then and there to scale back. My sister and I decide to limit Starbucks to once a week (rather than twice a day!) That alone helped a lot, specially because we didn’t just buy coffe, there was usually an overpriced bagel or pastry to go with it. I went to Kroger and bought bagles and cream cheese and started making coffee at the office. Our spending went down quite a lot. I still went to get a latte every so often and my pastry. Lately, I had reverted back into my Starbucks habit and neede to stop. I put the fabulous coffee/espresso/cappucino maker on my wedding registry and got it. It’s only $99.99 and programmable. Now $99.99 may seem like a lot, but if you’re spending $200/month at the coffee shop, you could ave yourself about $2,000 per year (assuming you spend $100 on the coffee maker and $300/yr on coffee and milk, etc) I even went to Sam’s and bought coffee flavor syrups so I can re-create my Caramel Macchiato at home.
    • Also, consider keeping breakfast foods and snacks at the office, so if you forget one day, you’re set, rather than being tempted to go to the coffee shop.
    • Something else I learned from my Starbucks experience are two things:
      • It’s ok to splurge on an overpriced coffee or pastry or whatever every now and then, just don’t make it a habit, but don’t deny yourself either. Everything in moderation
      • Also, it’s important to be aware of your surroundings and how they can create weaknesses. A strabucks in my office lobby created a huge habit I didn’t have before. My sister has a Starbucks in front of her job and now she’s hooked too. She also has a clothing store next to her job, and when she’s bored on her break she wanders in and inevitably walkes out with a shopping bag.
      • There is also a convenience store in my lobby and I am sometimes tempted to just start going down there for snacks/etc.
      • Point is: beware of convenience and temptations. Identify them and learn to avoid them.
  • Lunches out
    • Another big expense when I started to work here. I kept running late and forgetting to bring my lunch, or I simply didn’t plan ahead the night before to have lunch available to bring with me.
    • I hate skimping on food. I like to eat a lot, and good food. My husband is happy with a bowl of oatmeal because it’s cheap. I like to go out and find a restaurant I love and buy as much food as I want.
    • However, this means I was spending approximately $300/month on lunching out (so between breakfast and lunch $500/mo)
    • I have begun to plan ahead and cook dinner every night, I make extra food so my husband and I have enough to take to work with us the next day. This has kept our total food expenses dow to $400/month (or less)
    • If you just make a little more for dinner, you don’t have to go through the hassle of making lunch in the morning. Also, go ahead and pack it and put it in the fridge. All you have to do is grab it and go in the morning, along with you freshly brewed coffe the coffee maker automatically made while you were in the shower.
    • I have resolved to do several things before I go to bed and they make the next day so much better: I clean the kitchen so when I come home I’m encouraged to make dinner, rather than walk away just from seeing a mess. I pack our lunches so we can grab and go. And, I set up the coffee maker so I am awakened by the smell of coffee. The next day, I’m already starting off in a good mood. All of this only takes about 30 minutes at night.
    • Also, rather than buying a $5 smoothie mid day, I bought a $4 pack of frozen berries and I throw them in the blender with some OJ when I’m in the mood at home. That also saves me money.
    • I still go to my favorite lunch place, but now it’s only twice a month. It’s all about scaling down and finding alternatives, not denying yourself anything.
  • Alcohol
    • This is something else I don’t tend to track. When I lived on my own, I usually kept a bottle of rum at home, but most of my drinking was done going out, which I rarely paid for, since my date usually paid for it.  Of course now that has changed.
    • We generally keep a bottle of rum, a bottle of vodka, and one or two bottles of wine at home. We might drink twice a week, it all depends on the week. So, we probably spend close to $25/month just keeping the house stocked. Things get more expensive if we go out to the bar or dancing. If we go dancing there’s usually a cover fee involved ($10 – $30) plus each drink averages to be about $7. So, on one outing we’re talking about between $50 – $100. We go out to the club about once a month (maybe less). The bar, has less of a cover charge, but we’re still drinking $7 drinks, so about $50 on one bar outing, we go about twice a month. So all in all it’s about $150/month.
    • To scale down, we have scaled down how much we go out. Before we got married (and I was unaware of the cost), we went out about twice as much. Now we’ve scaled down our outings to stay within budget.
    • Also, the non-driver of the night will generally have a drink or two before we leave the house and that cuts the drinks down to one each per outing.
    • We also go out earlier to get in before the cover charges begin, This way we go out, we dance, have a good time, and spend  a lot less money. So we go from $100/outing to about $25.