OK, it's been a while. Sorry.
My current focus is building our savings and getting out of debt. This is going to take a while, but I'm sure it is possible.
I have set up a weekly automatic transfer from my checking to my savings and honestly don't even notice that it's gone. I'm not up to 10% yet but little by little our savings account is growing. I have also been dumping any unexpected cash flow in there as well. We just got our $25 City return (WOO-HOO!), a small refund from the cable company we just left, etc. Still not much, but it does add up.
I have decided to go against my previous advice and stop upping the percentage going into the savings at 5% instead of 10%. Instead, I will start putting the added percentages toward our debt until we can get rid of it. We recently used our tax return to pay off our car loan. This wasn't our biggest or smallest loan and it didn't have the most interest, but it was our biggest payment and just about the amount of our return. It just made sense to get rid of it and free up a little cash every month.
Now, in theory, you would think we would be able to transfer that monthly payment that we no longer have to make to another loan with no interruption but the fact of the matter is that with the economy the way it is and gas at $4/gallon and a son in college 7 hours away, and the price of everything going up much faster than our wages... that just aint gonna happen. BUT... it did free up the cash flow to make saving at all possible. Now on to the next bill. This time we're starting with the smallest total. This is a credit card with a 0% introductory rate for the first 12 months. I think we're a little over 1/2 way through that time period.
I have found that it's hard to pay $400 a month toward anything that doesn't require it, but I can manage to pay $100 weekly. Doesn't make much sense I know, but it's how my brain works. I use online bill pay and will start transferring the additional 1% that my savings was going to grow each month to the loan instead. I will keep the 5% going in to savings at least until that gets built up to a good emergency fund level. Also, any of the "extra" checks, refunds, rebates, etc. will be transferred weekly to the loan. Hopefully, we'll be able to pay it off before we have to start paying interest. This one's going to be tough,. I'll let you know how it goes.
Saturday, April 16, 2011
Sunday, April 3, 2011
Stick to your budget by budgeting in some mad money.
I'm sure there are people out there who are disciplined enough to make and stick to a strict budget and cut out all of the frills and extras. I'm one of them... For about a day and a half! OK, I could probably go a little longer than that, but then I'd start feeling deprived and get the overwhelming urge to splurge.
There have been times when our finances were just that tight that we tried to cut out any and every extra we could think of to save a buck, but it usually didn't last long. We felt burdened and overwhelmed with having to be accountable to each other for every penny spent. Especially when that came in the form of a swipe of the debit card that often went unreported until the bank statement came in the mail. Add to that over drafts and late fees and that lunch out can pretty expensive! When it came down to it, the tighter we tried to make our budget, the bigger we eventually ended up splurging.
Years ago, we decide to budget in an "allowance" for each of us. This amount has changed from time to time over the years as our availabile cash flow changed, but we have found it to be a very helpful and necessary tool to keep us living within our means. Over the years this has been as little as $10 each and as much as $100+. We have pretty much settled for somewhere in the middle now. If you've been tracking your spending on mint.com or using another budgeting tool, you can probably find the area where this money could come from (probably the area where you splurge and go over your budget on a regular basis) and determine the amount that works for you.
This money is "guilt-free". We each get the same amount and we don't have to be accountable to each other for it. If we want to get a cup of coffee, buy a pair of shoes, catch a movie or go to dinner, this is the money we use. Sometimes we pool our week's money together, sometimes we save up a couple of weeks for something special, sometimes we go all week and don't even spend it, but it's still there available for what ever. The point is we have stopped swiping the debit or credit cards for anything that is unplanned.
I suggest keeping a little extra in a hidden pocket of your purse or wallet just incase you go over your allotted spending for the week. We've gotten to the place where this doesn't happen often anymore, but occasionally we go a little over. Anything to keep from dipping into the budget. The weeks when we don't spend much, I just stash a little of the leftover.
There have been times when our finances were just that tight that we tried to cut out any and every extra we could think of to save a buck, but it usually didn't last long. We felt burdened and overwhelmed with having to be accountable to each other for every penny spent. Especially when that came in the form of a swipe of the debit card that often went unreported until the bank statement came in the mail. Add to that over drafts and late fees and that lunch out can pretty expensive! When it came down to it, the tighter we tried to make our budget, the bigger we eventually ended up splurging.
Years ago, we decide to budget in an "allowance" for each of us. This amount has changed from time to time over the years as our availabile cash flow changed, but we have found it to be a very helpful and necessary tool to keep us living within our means. Over the years this has been as little as $10 each and as much as $100+. We have pretty much settled for somewhere in the middle now. If you've been tracking your spending on mint.com or using another budgeting tool, you can probably find the area where this money could come from (probably the area where you splurge and go over your budget on a regular basis) and determine the amount that works for you.
This money is "guilt-free". We each get the same amount and we don't have to be accountable to each other for it. If we want to get a cup of coffee, buy a pair of shoes, catch a movie or go to dinner, this is the money we use. Sometimes we pool our week's money together, sometimes we save up a couple of weeks for something special, sometimes we go all week and don't even spend it, but it's still there available for what ever. The point is we have stopped swiping the debit or credit cards for anything that is unplanned.
I suggest keeping a little extra in a hidden pocket of your purse or wallet just incase you go over your allotted spending for the week. We've gotten to the place where this doesn't happen often anymore, but occasionally we go a little over. Anything to keep from dipping into the budget. The weeks when we don't spend much, I just stash a little of the leftover.
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