Here we are again, looking over spending in the month of February. I've gone through everything and it all appeared to be categorized correctly.
Comparing my spending this month and last there isn't a huge difference. There does not appear to be any one area I can easily cut my spending. There was a shift in the number of times I bought food out, reduced that by about 25%.
I spent less on my car, but last month was higher because of my birthday. I did spend more on utilities, but I think that is because it has been colder and I had to use my heater more. After all the work I put into looking at my spending last month, I don't really feel I need to dig deep into it this month. I think my spending is pretty well under control, but there's a lot of bills I can't control right now.
Showing posts with label budget. Show all posts
Showing posts with label budget. Show all posts
Tuesday, March 6, 2012
Thursday, February 2, 2012
Monthly review
So, it's a new month, which means it is time for me to look at where all my money is going and adjust my spending, and expectations, accordingly. I figure I'll go down the list from biggest to smallest expenditures, and as always I'll not be giving you exact figures, but I will give you percents to give you an idea of what I'm doing. Mind you, all of these numbers are just on money spent, nothing about my savings.
So first, I went through all my transactions for the last month in Mint and verified that they were all correct and accurately categorized. Then I clicked on my trending tab and Viola! All the information I need.
At the top of the list, as expected, is housing. Rent. Hasn't changed, can't be changed, nothing big there, except it's my largest overall expenditure almost every month, totaling almost 29% of my money spent in January! This is one big reason I'm really looking forward to buying a house, spending that much money to get nothing in return is just crazy. I will admit, that since I'm renting from my parents and basically paying the mortgage on their second house is on positive thing in there.
Second on the list is Auto! This one is a bit higher than normal because my birthday is coming up and I had to pay my tag fees and such. But as it stands this past month this category took up 27% of my spending. I expect that without the added fee, this category will be 75% of what it is now.
My third highest category of spending is Bills and Utilities. This category was 18.1% of my total spending. That might seem high, and really it is. There are 4 things in total in this category, each taking about 25%. They are Gas, Power, Cell phones, and Television (actually, this is both internet and tv). Now, at this point in time, I can't do much of anything about these bills. I do everything I can to conserve energy at home and even keep the place cooler than my son likes, but it's winter and the heat will have to run. I'm in a contract with my current phone carrier, which will be ending really soon, and when it does I will be switching plans at the very least, or even carriers if I find a really good deal. As for television and internet, I absolutely refuse to consider changing my internet, but I may see what I can do to reduce the cost of my tv service.
A close 4th is Food and Dining at 18%! Now, I feel I did really good this past month on that one. I have been saving a ton of money shopping sales and using coupons. I'll admit, I have probably missed out on a few coupons, and I'm sure I can work harder to find more of them, but when I go to the grocery store and only pay 75% of what I would have without coupons, I feel good! Now, I did say food and dining, the food was over 80% which means I spent less than 20% (or around 3% of overall spending) on eating out at restaurants. I have had issues in the past where I would spend a lot more money than I wanted in this category, and seeing these numbers makes me feel good.
And, last but not least is entertainment. 5% of my spending in January was on video games and Netflix. I'm sure I could change my spending in this category, but it was actually larger than normal this past month as well because I paid for a full year of one service up-front, saving money in the long run. But, even if I did spend 5% of my money in this category, I wouldn't be too upset.
Of course, there's also another few percent left over of my spending which is just random stuff, like office supplies and interest charges. Overall, I think I had a successful month, and looking over these numbers makes me realize that I've already done a lot of work streamlining my spending. Even though I don't actively employ the process outlined in the You Need A Budget (The Book), I still follow the basic tenets behind it.
So first, I went through all my transactions for the last month in Mint and verified that they were all correct and accurately categorized. Then I clicked on my trending tab and Viola! All the information I need.
At the top of the list, as expected, is housing. Rent. Hasn't changed, can't be changed, nothing big there, except it's my largest overall expenditure almost every month, totaling almost 29% of my money spent in January! This is one big reason I'm really looking forward to buying a house, spending that much money to get nothing in return is just crazy. I will admit, that since I'm renting from my parents and basically paying the mortgage on their second house is on positive thing in there.
Second on the list is Auto! This one is a bit higher than normal because my birthday is coming up and I had to pay my tag fees and such. But as it stands this past month this category took up 27% of my spending. I expect that without the added fee, this category will be 75% of what it is now.
My third highest category of spending is Bills and Utilities. This category was 18.1% of my total spending. That might seem high, and really it is. There are 4 things in total in this category, each taking about 25%. They are Gas, Power, Cell phones, and Television (actually, this is both internet and tv). Now, at this point in time, I can't do much of anything about these bills. I do everything I can to conserve energy at home and even keep the place cooler than my son likes, but it's winter and the heat will have to run. I'm in a contract with my current phone carrier, which will be ending really soon, and when it does I will be switching plans at the very least, or even carriers if I find a really good deal. As for television and internet, I absolutely refuse to consider changing my internet, but I may see what I can do to reduce the cost of my tv service.
A close 4th is Food and Dining at 18%! Now, I feel I did really good this past month on that one. I have been saving a ton of money shopping sales and using coupons. I'll admit, I have probably missed out on a few coupons, and I'm sure I can work harder to find more of them, but when I go to the grocery store and only pay 75% of what I would have without coupons, I feel good! Now, I did say food and dining, the food was over 80% which means I spent less than 20% (or around 3% of overall spending) on eating out at restaurants. I have had issues in the past where I would spend a lot more money than I wanted in this category, and seeing these numbers makes me feel good.
And, last but not least is entertainment. 5% of my spending in January was on video games and Netflix. I'm sure I could change my spending in this category, but it was actually larger than normal this past month as well because I paid for a full year of one service up-front, saving money in the long run. But, even if I did spend 5% of my money in this category, I wouldn't be too upset.
Of course, there's also another few percent left over of my spending which is just random stuff, like office supplies and interest charges. Overall, I think I had a successful month, and looking over these numbers makes me realize that I've already done a lot of work streamlining my spending. Even though I don't actively employ the process outlined in the You Need A Budget (The Book), I still follow the basic tenets behind it.
Thursday, January 26, 2012
My Financial Past
So, I've alluded to this a little in previous posts, but I figure I should give you guys a rundown on what has brought me to where I am now. I have worked for as long as I can remember. My parents were avid sci-fi fans and we went to conventions to sell merchandise in the dealers rooms, and many times I'd be left in charge of the table. Outside of that, I had a paper route and in my off time I would help my mother collect UPCs and coupons.
We were a very thrifty family. My mother had coupons for everything, she would trade with people through the mail even. We had filing cabinets full of UPCs saved in case there was a future rebate. I was taught at an early age the value of a dollar and how to stretch your money, but it never really sunk in.
At around 10 years old, my family moved down to Georgia. Things worked differently here, kids didn't have paper routes. It wasn't until I was 15 that I really started working again. I would go and help out at the local comic book store in exchange for credit I could use to buy comics with. It was good work, I loved the people and had a great time.
A little while later, when I got my own car, I had bills to pay, so I needed real money. After that I worked a few different jobs; I worked at a few fast food restaurants and even did a stint in retail. After high school, it was time for me to move out on my own, and like every other grown-up, I got credit!
That was a bad idea. Eventually, I was maxed out on all my credit cards and overdrafting my checking account all the time. In the end, at age 21, I was near bankruptcy, although somehow I never quite got there. I defaulted on 3 or 4 different credit cards, and eventually had no credit and only lived off what I made each paycheck.
You'd think I would have learned from that, but it wasn't until 2-3 years ago that I finally changed my life. I found Quickenonline, and it saved me. The feature that let you put in recurring bills and estimate your bank account on any given day was all it took for me to stop overdrafting. I would estimate that over the course of 10 years, I paid at least $9,000 in overdraft fees. Not to mention all the other fees on credit cards for being over the limit and only paying minimum payments.
But my story doesn't end there, because eventually, those defaulted credit cards drop off your credit report. And what happens then? You can get more credit cards. And I did, and I wasn't smart the second time either. I never let the cards go over the limit, but I carried balances, for a long time. And I'm sure I've paid my fair share of interest these past few years. But then something changed, I got to claim a dependent on my taxes, and my return was HUGE! And I paid off my credit cards! And now I barely carry any balance from month to month, and pay off most of my cards each month.
This all goes to show that no matter how bad you are financially now, there's always hope. You just have to be willing to make changes. I could have fixed all my problems sooner, if I had only tried. All it took was being able to estimate my bills and see where all my money was going for me to realize how to fix it. If I had just started keeping a paper ledger so many years ago and actually kept on top of it, I would have been fine. But I was lazy, and didn't do it. But now I check my bank accounts every few days, watch my bills and make sure they're all paid on time, and you can too.
We were a very thrifty family. My mother had coupons for everything, she would trade with people through the mail even. We had filing cabinets full of UPCs saved in case there was a future rebate. I was taught at an early age the value of a dollar and how to stretch your money, but it never really sunk in.
At around 10 years old, my family moved down to Georgia. Things worked differently here, kids didn't have paper routes. It wasn't until I was 15 that I really started working again. I would go and help out at the local comic book store in exchange for credit I could use to buy comics with. It was good work, I loved the people and had a great time.
A little while later, when I got my own car, I had bills to pay, so I needed real money. After that I worked a few different jobs; I worked at a few fast food restaurants and even did a stint in retail. After high school, it was time for me to move out on my own, and like every other grown-up, I got credit!
That was a bad idea. Eventually, I was maxed out on all my credit cards and overdrafting my checking account all the time. In the end, at age 21, I was near bankruptcy, although somehow I never quite got there. I defaulted on 3 or 4 different credit cards, and eventually had no credit and only lived off what I made each paycheck.
You'd think I would have learned from that, but it wasn't until 2-3 years ago that I finally changed my life. I found Quickenonline, and it saved me. The feature that let you put in recurring bills and estimate your bank account on any given day was all it took for me to stop overdrafting. I would estimate that over the course of 10 years, I paid at least $9,000 in overdraft fees. Not to mention all the other fees on credit cards for being over the limit and only paying minimum payments.
But my story doesn't end there, because eventually, those defaulted credit cards drop off your credit report. And what happens then? You can get more credit cards. And I did, and I wasn't smart the second time either. I never let the cards go over the limit, but I carried balances, for a long time. And I'm sure I've paid my fair share of interest these past few years. But then something changed, I got to claim a dependent on my taxes, and my return was HUGE! And I paid off my credit cards! And now I barely carry any balance from month to month, and pay off most of my cards each month.
This all goes to show that no matter how bad you are financially now, there's always hope. You just have to be willing to make changes. I could have fixed all my problems sooner, if I had only tried. All it took was being able to estimate my bills and see where all my money was going for me to realize how to fix it. If I had just started keeping a paper ledger so many years ago and actually kept on top of it, I would have been fine. But I was lazy, and didn't do it. But now I check my bank accounts every few days, watch my bills and make sure they're all paid on time, and you can too.
Wednesday, January 25, 2012
The urge to spend is strong.
Saving money isn't just about not spending it. One mistake a lot of people make when trying to save money is to outlaw all frivolous spending. What that does is make the urge to spend even stronger. When creating a budget, it is important to not just leave a little wiggle room, but to also budget in money you can spend freely with no worry, Mad Money.
When you have money you don't have to account for, not a lot, but $5-$10 per week, it makes it easier to stay within budget. You're able to buy the small things you like, and more resistant to the urge to buy things you don't need. Of course, adding in an entertainment budget can help too. Setting aside a segment of your budget to do fun things, like go the movies, play mini-golf, or whatever, will help you feel less restricted, making you less likely to want to "fight back" against the restraints of your budget.
Of course, even with an money built into a budget for entertainment, and some extra mad money will still not keep the urge to spend down, and that's where my previous entry comes in, Saving more, spending less. It's important to be able to determine if a purchase really is worth the money in the long run.
What happens when you find one that doesn't fall in your budget that really is worthwhile? Change your budget, simple as that. Part of having a good budget is the ability to change it so that you can get what you want and what you need without resorting to bad decisions.
When you have money you don't have to account for, not a lot, but $5-$10 per week, it makes it easier to stay within budget. You're able to buy the small things you like, and more resistant to the urge to buy things you don't need. Of course, adding in an entertainment budget can help too. Setting aside a segment of your budget to do fun things, like go the movies, play mini-golf, or whatever, will help you feel less restricted, making you less likely to want to "fight back" against the restraints of your budget.
Of course, even with an money built into a budget for entertainment, and some extra mad money will still not keep the urge to spend down, and that's where my previous entry comes in, Saving more, spending less. It's important to be able to determine if a purchase really is worth the money in the long run.
What happens when you find one that doesn't fall in your budget that really is worthwhile? Change your budget, simple as that. Part of having a good budget is the ability to change it so that you can get what you want and what you need without resorting to bad decisions.
Friday, January 20, 2012
Saving more, spending less
Part of being financially responsible is not wasting money. Every day, you make choices on how to spend your money, and each choice will either benefit you or it won't. It is important to think about everything you buy and all the money you spend. Do you really need to get the name brand frozen pizza, or will the store brand be just as good?
Some decisions are easy, it's hard to really tell much difference between one brand of bleach and the next, but some are harder. I personally don't like macaroni and cheese unless it's Kraft. I've tried other brands, and none have lived up to the quality of the name brand.
Every time you spend money, you need to think before you buy. It's really important to stop buying on impulse. A great article on So Over Debt describes a great process of determining if a purchase will really be good for you in the long run. This process goes for purchases of every size, whether it's a new car or a pack of gum.
Another great way to save money is to use coupons. I'm sure you've all heard of those extreme couponers who are able to save like 90% on their purchases. I wouldn't expect people to go that far, but if you're gonna go and buy a new toothbrush, there are coupons easily accessible across the internet for that and many other things.
Also, a lot of stores have some sort of savings club. One example is Kroger Plus, with that card you can save money on everyday purchases, and they'll even mail you coupons from time to time, plus they allow you to load electronic coupons on your card for later use. The program is free, and easy to use.
Now I'd like to ask, what do you do to save money from day-to-day?
Some decisions are easy, it's hard to really tell much difference between one brand of bleach and the next, but some are harder. I personally don't like macaroni and cheese unless it's Kraft. I've tried other brands, and none have lived up to the quality of the name brand.
Every time you spend money, you need to think before you buy. It's really important to stop buying on impulse. A great article on So Over Debt describes a great process of determining if a purchase will really be good for you in the long run. This process goes for purchases of every size, whether it's a new car or a pack of gum.
Another great way to save money is to use coupons. I'm sure you've all heard of those extreme couponers who are able to save like 90% on their purchases. I wouldn't expect people to go that far, but if you're gonna go and buy a new toothbrush, there are coupons easily accessible across the internet for that and many other things.
Also, a lot of stores have some sort of savings club. One example is Kroger Plus, with that card you can save money on everyday purchases, and they'll even mail you coupons from time to time, plus they allow you to load electronic coupons on your card for later use. The program is free, and easy to use.
Now I'd like to ask, what do you do to save money from day-to-day?
Wednesday, January 18, 2012
Tax prep for 2012
So, I just filed my taxes yesterday, and already know what my estimated return is going to be. And now it's time to think about this year's taxes. Some people think it might be too early, but it all depends on how you look at taxes. Sure, it's nice to have this big check come to you once a year, it's like free money, right?
No, it's lost money. By getting money back from taxes, you are in essence giving the federal government a free loan. The money would do you more good if you reduce your withholdings and put that extra money into a savings account. As an example, if I were to pay the exact amount I owe in taxes every paycheck instead of the amount I have been, I would be getting at least $100 more per paycheck. If I then take that money and put it into my Roth IRA, I'd be nearly maxing it out each year. Or I could take that money and put it into a vacation fund, and have a few really nice getaways every year. Alternatively, you could take the money and put it into a savings account that you'll never touch except for emergencies, and then you'd be prepared for a lot of life's pitfalls.
Personally, I plan to adjust my withholdings, and max out my Roth IRA contributions. The amount of money I'll be getting from the change won't quite cover the contributions to my retirement fund, but the difference will be minimal and I'm certain I'll be able to handle it.
The one hurdle I have right now is making the actual change. I have to get in contact with human resources at my employer, and so far my luck with that isn't very good.
No, it's lost money. By getting money back from taxes, you are in essence giving the federal government a free loan. The money would do you more good if you reduce your withholdings and put that extra money into a savings account. As an example, if I were to pay the exact amount I owe in taxes every paycheck instead of the amount I have been, I would be getting at least $100 more per paycheck. If I then take that money and put it into my Roth IRA, I'd be nearly maxing it out each year. Or I could take that money and put it into a vacation fund, and have a few really nice getaways every year. Alternatively, you could take the money and put it into a savings account that you'll never touch except for emergencies, and then you'd be prepared for a lot of life's pitfalls.
Personally, I plan to adjust my withholdings, and max out my Roth IRA contributions. The amount of money I'll be getting from the change won't quite cover the contributions to my retirement fund, but the difference will be minimal and I'm certain I'll be able to handle it.
The one hurdle I have right now is making the actual change. I have to get in contact with human resources at my employer, and so far my luck with that isn't very good.
Friday, January 13, 2012
How do I save money?
Now, this topic could be read in a couple of different ways, so I'll try to cover savings, money you stash away for a rainy day or specific purposed. I'll cover ways to actually save money day-to-day in another topic.
So, how do you start saving? It's really hard to do when you live paycheck to paycheck. By the time you get your paycheck, almost every dime from the last one is gone. There doesn't seem to be any wiggle room, how can you save money you don't have? Well, the best way is to never have the money to begin with. Do you really think you'll notice a huge difference if you get $25 less from your paycheck? I doubt it, because I don't. So, when you get paid, set aside $25 in a savings account.
If you get your checks direct deposited, it's even easier, because all you have to do is tell your employer to deposit the $25 in one account and the rest in another, you never see or touch it. Personally, I have 4 different savings account, and I sock away $25-50 into each one of those accounts each paycheck.
The next problem is, how do you not spend the money? You have this ever-increasing balance in a checking account, and you might get the urge to spend it, but it's really easy to keep from doing that. Make sure your savings account is hard to access. Using an online account does just that. You can still get money out when you need it but it takes a few days and some planning, so you'll be less inclined to move the money around.
One great online-only bank I highly recommend is INGDirect. If you're interested, I would gladly send you a referral to them, which will net you an easy $25 just for starting an account, just drop me a line and I'll get you a link.
Please don't forget to check out the free online book linked to the right, "You Need a Budget (the book)" where you'll get even more ideas and ways to start saving money.
So, how do you start saving? It's really hard to do when you live paycheck to paycheck. By the time you get your paycheck, almost every dime from the last one is gone. There doesn't seem to be any wiggle room, how can you save money you don't have? Well, the best way is to never have the money to begin with. Do you really think you'll notice a huge difference if you get $25 less from your paycheck? I doubt it, because I don't. So, when you get paid, set aside $25 in a savings account.
If you get your checks direct deposited, it's even easier, because all you have to do is tell your employer to deposit the $25 in one account and the rest in another, you never see or touch it. Personally, I have 4 different savings account, and I sock away $25-50 into each one of those accounts each paycheck.
The next problem is, how do you not spend the money? You have this ever-increasing balance in a checking account, and you might get the urge to spend it, but it's really easy to keep from doing that. Make sure your savings account is hard to access. Using an online account does just that. You can still get money out when you need it but it takes a few days and some planning, so you'll be less inclined to move the money around.
One great online-only bank I highly recommend is INGDirect. If you're interested, I would gladly send you a referral to them, which will net you an easy $25 just for starting an account, just drop me a line and I'll get you a link.
Please don't forget to check out the free online book linked to the right, "You Need a Budget (the book)" where you'll get even more ideas and ways to start saving money.
Tuesday, January 10, 2012
You Need a Budget (the book) Review
Now, I'm not personally familiar with this program, but they have a book available to read free of charge online, and it is wonderful! I read the whole thing, and it basically describes the exact process I use for managing my money. I had already put a process in place, using Quicken Online (which is unfortunately no longer available) that basically follows the principals of the book to a T. For anyone who is in need of a budget, I highly recommend you start by reading the free book.
The software associated with the book does offer a free 34 day full-featured demo. The software integrates all the best things you would want from a budgeting standpoint, including tracking your spending and savings, and planning future expenses.
The software associated with the book does offer a free 34 day full-featured demo. The software integrates all the best things you would want from a budgeting standpoint, including tracking your spending and savings, and planning future expenses.
Mint Review
Mint.com has been a big name in online budgeting tools. Personally, I don't use it a lot, but when I do I am amazed at what I find. This is the very best tool to figure out where you spend your money. They take the data from your bank accounts and give you a wonderful visual indicator as to where you spend your money. You can break down expenses into any number of categories, and the site does a good job of figuring out what categories most expenses fall into automatically.
Mint also offers a smartphone app (Available for Android and iPhone) that will let you see where all your money is and where it is all going. I use the app all the time before spending money to make sure I have enough to cover expenses from the account I want to use.
Mint also offers a smartphone app (Available for Android and iPhone) that will let you see where all your money is and where it is all going. I use the app all the time before spending money to make sure I have enough to cover expenses from the account I want to use.
Yodlee Review
The name may sound funny, but the Yodlee is one of the biggest tools I have in managing my money. The site will allow you to enter your online banking credentials and download your transactions, showing you were your money is, and where it's going. That in an of itself is great, but what has really helped me is planning ahead. The site will allow you to add future transactions (recurring and one-time) and see how they will affect you. Some of you may be familiar with this concept if you ever used Quicken Online, but since the site shut down and Mint took its place (I'll review Mint separately), Yodlee became the best site for this kind of financial forecasting. Using current bills you can estimate what your future bills will be, and have a better understanding of how much money you actually have available. Before I started using a service like this, I would never know how much money I actually had free, and was constantly over-spending. Now, with the help of this tool I can keep track of all of my accounts in one place and plan for the future.
The Beginning
Hello, my name is Loren and I'm starting a new financial blog. Currently, I'm just beginning the process of buying a house. I'm at the very beginning stages, and I'm going to try to be as transparent about this process as I can. I'll also be going over other financial related stuff on this blog, along with helpful links and tips I come across.
I'll begin with an explanation of where I am as of now. I have not begun more than just trying to get my ducks in a row. I ran a credit report on all three bureaus just over a year ago, and all of them came back with good stuff. I did have one negative thing on a single report from a residence over 5 years ago. It is a debt that went to collections on cleanup costs for an apartment. I won't bore you with the details of why I owe the money or why I didn't pay (Unless you want to hear about it), but since then I've had nothing but on-time payments. I've increased my overall credit since the report was run, and I've kept my debt-to-credit ratio at a decent level.
Currently I am paying around $800 in rent to my parents, which is basically paying their mortgage payment on the house I'm living in. I did some research at BankRate.com and determined that I could hope for a rate around 4% and with that I could easily afford a $100,000 home with a 30 year mortgage.
I've also been watching my credit score using CreditSesame.com. The site will keep your credit score up to date, and it uses the same 300-850 scoring as the real FICO scoring system does, but I don't think what they give you is a true FICO score. Currently my score is 772, which has earned me their Excellent Credit Badge.
I'll begin with an explanation of where I am as of now. I have not begun more than just trying to get my ducks in a row. I ran a credit report on all three bureaus just over a year ago, and all of them came back with good stuff. I did have one negative thing on a single report from a residence over 5 years ago. It is a debt that went to collections on cleanup costs for an apartment. I won't bore you with the details of why I owe the money or why I didn't pay (Unless you want to hear about it), but since then I've had nothing but on-time payments. I've increased my overall credit since the report was run, and I've kept my debt-to-credit ratio at a decent level.
Currently I am paying around $800 in rent to my parents, which is basically paying their mortgage payment on the house I'm living in. I did some research at BankRate.com and determined that I could hope for a rate around 4% and with that I could easily afford a $100,000 home with a 30 year mortgage.
I've also been watching my credit score using CreditSesame.com. The site will keep your credit score up to date, and it uses the same 300-850 scoring as the real FICO scoring system does, but I don't think what they give you is a true FICO score. Currently my score is 772, which has earned me their Excellent Credit Badge.
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