Financial Friday

 It’s been one week since Operation: Stop Spending Money began and so far I think it has gone well.  Especially for the first week ever on a true zero balance budget.  I separated all of my envelopes by how my paychecks fall.  Since I get paid biweekly, I’ll be refilling every paycheck approximately half of my monthly budget for those items.  My monthly budget is:

·         Home (groceries/house supplies/basic toiletries/paper products/cat food/any food related purchase, including restaurants): $300/month ($150/paycheck)

·         Personal (mostly for clothes, cosmetics, and any entertainment expenses):  $100/month ($50/paycheck)

·         Gas:  $90/month ($45/paycheck)

Things like rent, car insurance, cell phone bill, etc., all get paid directly out of my bank account.  I tried to give myself a reasonable amount of money so that I wouldn’t just get frustrated and quit.  It’s not quite perfect yet, but I’m not 100% sure if that’s because I didn’t give myself enough of an allowance in personal or home.  When I replenish my envelope funds next Friday (payday), I’ll probably keep the amounts the same and see how it goes.  I’m really hoping that I can get by on what money I have in envelopes through next week but I won’t be too upset if I have to “borrow” $40 from my bank account to get me through just so I can still enjoy the holiday season, especially since I’m not traveling home.

Right now I have $4 left in the home budget (mostly due to an unexpected rodent problem due to a neighbor who is less than immaculate) and two or three restaurant splurges I should have avoided (once I left my lunch for work on the counter at my house, which not only caused me to have to buy lunch but also ruined a frozen dinner.  This left me one meal short for my week.).  I have $20 left in my personal budget and $20 left in my gas budget.  I did go off completely off plan once due to a necessary midday wardrobe malfunction that lead to me putting $30 on a credit card.  (Full disclosure:  I still have money in my checking account but all of my bills for the first part of the month haven’t been deducted yet and I wanted a bit of a buffer zone so the money I have sitting in my savings account didn’t get moved over to checking.  Plus, my interest rate on that card is pretty low so it’ll only end up costing me around 50 cents to get it taken care of next month.)

In theory, any money that doesn’t get spent in the home budgets roll over into my travel fund.  The travel fund doesn’t really get funded like a regular envelope though.  It’s just any extra, unexpected income that I might get.  For example, I just upgraded my cell phone and may be selling my old one on Craigslist or eBay.  Since that’s not money that I banked on coming in to pay bills or direct to another purpose, that money would go into the travel fund.  The gas fund will keep rolling over in case emergency or unexpected travel by car is needed (this would have been great to have earlier in the year for a death in the family).  And the personal money left at the end of the month will roll over month to month into a clothing allowance envelope because clothes, especially winter clothes, aren’t cheap, wear out, and require replacement/dry cleaning/mending/alteration, etc.  (If I had had this earlier this week then I wouldn’t have put any money on my credit card!!)

On Monday I’ll go over some plans that I think might help in planning my  budget for the upcoming year as well as some mini goals to hit by certain dates.

Do you work off of a budget of any kind?  If so, what works for you?

What percent of your take home to you commit to household needs and groceries?  I think I’m around 11% total for all home purchases including groceries.

Total Money Monday

 I’m not a natural when it comes to personal finance.  I love shopping and having nice, top-of-the-line, shiny, brand new things.  However, I’d also really like to be financially secure.  I read Dave Ramsey’s Total Money Makeover a few years ago and the envelope system definitely worked for me.  I just stopped when I moved to Minnesota two years ago and since then I haven’t been the best budgeter.

The truth is, I’m in a better financial situation that I’ve ever been.  I mean, I’m not rich by any stretch of the imagination.  There’s just no reason for me to live paycheck to paycheck at this point in my life.  And that’s exactly what I’m doing.  That’s why I was at the bank withdrawing cash on Black Friday instead of standing in line for a new TV (something I REALLY, REALLY WANT too BTW). 

After looking at my particular financial situation, I will be changing a few things though.  For example, I only have two credit cards and will be concentrating on paying off the bigger of the two first.  The interest on the bigger card is significantly more and paying that card off will save me upwards of $80 a month to roll into other debt.  My student loans, however, have the same interest rate so I’ll go ahead and concentrate on the smaller one first.  Those are my only current debts (~$2,800 in credit cards and ~$45,000.00 in student loans) but my student loans are more than what my grandmother’s house cost when they bought it in the 1970s!

The next difference is I won’t be pouring all of the residual cash after I pay my monthly expenses into my student loans or credit cards quite yet.  Why you ask?  Because rent in MSP is expensive.  I’m pretty sure that what I pay for my 500 square foot basement studio actually pays the entire mortgage on my landlord’s triplex.  Since this is actually one of the few major cities where buying actually makes more sense than renting, I’ll be buying a house. 

I’m hoping that I’ll be in a place by the end of winter or beginning of spring in 2016.  There’s no way I’ll be able to save up a full 20% down payment by that time but even if I do an FHA loan with 3.5% down and have to pay PMI, I’ll still be paying less than I am now.  And then I can deduct an interest from my taxes.  I’ll also have more space and the opportunity to have family come visit, maybe even move up, or at least look at getting a roommate to help fund my debt snowball. 

After I buy a house, then I’ll start focusing one student loan at a time, followed by my mortgage.  In the meantime, I’ll be visiting the bank every two weeks and filling up envelopes.   I’ll do another post on how I setup my envelopes to work for me right now.

Do you have problems budgeting?  This method is the only one that has EVER worked.

Do you regret taking out student loans?  I wish every day that I could turn back time and not go to graduate school.

Manic Monday

 This weekend was sort of random.  Friday, after a horrible day at work, I ventured to Barnes and Noble and Ulta instead of going to the gym.  Turns out that I prefer pricy British fashion magazines and $8 lip balm over working out.  Who knew!  But it was nice and relaxing and sort of exactly what I needed.  I mean, I didn’t need to spend the money, but it was nice to not think about that for a second.  

 

I like to pretend that I have a country house.

Lip nectar of the gods

On Saturday I was supposed to do something at Lake Calhoun with a friend but it rained so instead I went to the gym for a killer workout that included day 1 of half marathon training.  The good news is that I didn’t die.  The bad news is that I can only run for 90 seconds without wheezing.  

That evening I met friends for appetizers and drinks at The Blackbird Café in Minneapolis.  The place could have been really cool but just wasn’t fantastic. They were out of everything we tried to order.  WHO RUNS OUT OF CHEESE?  The waitress had an attitude and my total was wrong.  Well, it was both right and wrong.  I ordered a $7 glass of sauvignon blanc and was charged $11.50 a glass because my waitress thought sauvignon blanc sounded like Sancerre.  Anyway, I paid $40 for two glasses of wine and bread and butter.  I will not be returning.  I think this week we might go to Borough and hopefully that’s a better experience.  It should be affordable too because they have an awesome Parlour menu.

Money, Money, Money Monday

Speaking of working on my financial fitness, the lease on my outrageously pricy apartment expires at the end of September.  I think I’ve found another place that’s half the price of what I’m paying now and less than ten minute drive maximum to work.  (Right now I’m about 30 minutes away from work unless it snows.  Then I’m 3 hours away…) The bad part is that it’s street parking and doesn’t have a dishwasher (#firstworldproblems).  

 BUT, it’s in a really cool neighborhood right next to an awesome park/”beach”/golf course, is super cheap with all bills included, free access to a washer dryer on the same level as my unit and only shared with two other people (both guys so really, that’s like sharing with one lady-person), and the street parking access is pretty fantastic for what it is.  What it is not is a garage, which is what I have currently but I’m too poor for a garage.

I put down a deposit, which the guy is supposed to hold until all of my rental verifications, income checks, etc. go through.  Hopefully, my people respond in a timely fashion and I can secure it soon so I can stop worrying about it.

It’s also less than 600 square feet so it satisfied my desire to live in a tiny house while also meeting my need to be too lazy to actually build a tiny house. 

How was your weekend? 

How do you save money even though in your mind you’re a billionaire?