Finally… Finances

Admittedly, my blog is 94% about health/weight loss, 5% motherhood and the other 1%?  Other stuff… like my finances.  In all honestly, they need as much attention as my widened ass, but alas, it takes me getting all my other “ducks in a row” before I can even wrap my head around going forward with a real financial plan.
So now I’m a few weeks into truly starting fresh with my weight loss and I’m finally getting to that point where day to day, meal to meal isn’t such a struggle, sticking to including exercise, and it just sort of… clicked.  I’m no longer frustrated and actually pleased with my results.
So now is the time to CONQUER THE WORLD… er… make a budget and stick to it!

A little history about me… I didn’t truly figure out how to budget until a couple years ago.  Yes I wrote everything down, yes I made spreadsheets and saw it all in black in white… BUT I did it back(ass)wards.
The month would pass by, I’d enter all the grocery and take-out recipes (our BIGGEST budget buster… always) and be like “whoa” when I saw what we spent.  “We need to do better” I’d say, but then that was it.
The next month finishes out and I’d do the same thing again.
Why isn’t this working?
A-duh.
So FINALLY I set a budget and made myself stick to it… BEFOREHAND.  I brought a calculator into the store with me knowing I could only spend $150 that trip, and every 10 items or so I’d subtotal and see what was remaining and with each item I truly asked “do we NEED this?”
I put back many items (or duplicates of items) many times, but I walked out of that store on budget and guess what?  At the end of the month I’d done it and we didn’t starve.
Honestly it was a lot of work and shopping took about 25% longer, but worth it for our bottom line.
I also learned I have food supply hoarder tendencies.  I always tend to buy multiple of items (not even on sale) “just to have” in my cabinets “in case” we run out of the other.  Items that would take us MONTHS to go through, so really the need wasn’t there and I multiply that by how many items I do that for, it saved me a bit of cash which made my new monthly budget doable.
I need to work on this tendency of mine.

There’s also other financial knowledge I’ve heard over the years and thought “that’s great” in theory but never actually put it to work on my own finances.
Now is different!
One of the best plans to paying off debt is the following:
Ignore the APR’s (that was hard for me) and list your debts in order from lowest to highest.  Start paying every extra cent you have to the smallest balance and only the minimum to the larger debts.  When that first one is paid off, take what you were paying and add that to the minimum you were already paying and put it towards the next larger debt and keep doing that until it is paid off and so on and so on.  Until finally, you’ve paid off all your debts.
The key to this:  do not use your credit cards
We weren’t the biggest credit card users, but when the tough times happen, you gotta buy groceries and fix the car somehow!
Over the last few years our savings account had kept a balance over 4 digits which was a FIRST in my adult life & I was so proud of it, however it wasn’t truly all of our own money.  The deposit our tenants had given us accounted for $900 of that and they could move at any point since we agreed to a month-to-month lease.
Well, they did decide to move and this past fall that meant returning about $500 of that (the rest was deducted for damages, but we had to spend that on new carpeting), a rental van to travel to our house (our cars are too small and old & can’t take the wear & tear of a 1700+ mile trip), gas & food for the trip, our house being vacant/no rent for 1.5 months, etc.  It was in total about a $3300 unexpected expenditure and it cleaned us out.
I’m not even including the $250 we’ve already paid towards a $500+ estimated bill from a landscaper/plumber/handy man or the expense of getting some electrical issues fixed which hasn’t been done yet.
And then we still managed the long trip north (another van rental) to visit the in-laws for Christmas.
We are SPENT.
And so, sadly there is nothing worthwhile in our savings account at the moment… the saddest it’s been in 3 years.
And frankly, I’m not cool with this.

So I did a fully detailed Excel spreadsheet of our 5 debts (4 credit cards & Bill Me Later) from lowest to highest and a month to month breakdown accounting for payment amount and applied APR charges/annual fees, etc. to figure out exactly where we stand if we started the debt paying plan.

What my debt payoff sheet looks like... from a distance. (Hey, my debts & APRs are my business)

What my debt payoff sheet looks like… from a distance. (Hey, my debts & APRs are my business)

It will take us a minimum of 34 months to be debt free (November 2016).  After that, an additional 12 months and our last student loan would be paid off.  After that?  We’d have about $500/month that we’d no longer owe to anyone and that sounds fabulous.  Or after the 34 months is over, we’d have $350 we no longer need to put towards credit cards and we could just keep making payments on the student loan (since the interest is basically non-existent).  That’s $4200 a year we could save for something else.
Yes, it’s a long road, but so is my weight loss.  Losing weight is day by day (sometimes hour by hour) and losing debt is month by month… you just can’t make it go any faster (well, unless there is a lottery win or something). 🙂

However it is unrealistic that we aren’t going to have to use our credit cards in the next few months if something big were to pop up since we have no savings anymore to draw from.
This is why for the real plan (per some dude’s book my sister is reading – he’s like a male Suzy Orman), you are supposed to scratch & scrape together $1000 minimum to be in your savings account BEFORE you start making those payments to the credit cards.
Me?  I’m taking a risk by not doing that.  I want to start NOW (ok, technically next month).  I just cross my fingers and hope nothing happens until after mid-February when we get our tax return (it isn’t that impressive as we count like 10 dependents during the year so we’ll have the use of the most money we can, but not risk owing come tax time).  It should be around $1000 and that will go directly into our savings, and then we’ll be good for a bit.  (Though again, it’s not really our money… our new tenants provided a full deposit of $1350 which we had to use to cover that month we had no tenants as the mortgages still needed to be paid, so sometime before their lease is up in December 2016, we need to have all $1350 set aside for them… plus interest), but in the meantime, we can pretend it’s our money and feel better having a back-up.

Besides a plan to pay off debts, the other issue is the monthly budget (which allows for said money to go towards the debt).  The bills are basically fixed, so if I don’t watch our food/non-food budget carefully, there won’t be enough money to go around.
Something that always plagued me and when my brain tried to process it I’d get frustrated and give up was truly trying to figure out the expenses that are NOT monthly… memberships, subscriptions, car taxes, quarterly bills, etc.  I can’t mentally look at my checking account and be like “ok, but really there is $80 in there that in 3 months will pay X bill…”   Nope, if it’s in my checking, it’s fair game THAT month.

So what I’d do is budget out all the fixed or predictable monthly expenses and just leave room for “extras”.  That was NEVER enough money as when you think about it, there are a LOT of “extras” that aren’t so extra.
So now I’m attacking it differently.  I have set up 3 different categories:
Non-food:  These are the items I’m also buying while at Walmart getting my food (or when at Sam’s Club):  shampoo, toothpaste, diapers, wipes, cotton swabs, toilet paper, paper towels, clothes, toys, cat food, cat litter, pool filters, duct tape, you get the picture…
Yearly bills:  Memberships (AAA, Xbox live), subscriptions (just 1 for my hubby:  GameInformer), Car taxes, Terminix (this is quarterly), etc
and finally:
Extras (that aren’t necessary yearly, quarterly, not as predictable as you’d think and I don’t/can’t buy them in Walmart/Sam’s Club):  stamps, Proactiv, bare minerals, car repairs, shoes, certain clothing items, gifts, movie rentals, appliances, furniture, etc.
I made columns for each (again, Excel) and added up the approximate yearly expense for each and then divided by 12.  This amount then went into the associated column on my monthly budget worksheet.  Somehow by doing this I can better wrap my brain around budgeting for these annoyingly ‘sometimes, but not all the time’ items.
So that encompasses my new budget/getting debt free plan which officially goes into action next month (though I’m making myself stick to a food budget this month while gathering further intel on what we spend on certain non-foods so I can even better budget in the future).

Wish me luck!

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About gwenacious

Always a person in progress. On a mission of self-improvement and exploring my artistic side.
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One Response to Finally… Finances

  1. Oh look, here it is… Nov 2016. Am I debt free? Hell no. I just redid a spreadsheet like that and it’s more like 2019. But things are super tight right now, so I foresee that being 2020.
    So what happened? WE BOUGHT A HOUSE! (Jun 2015) We needed to save up a bunch, so back to minimums only for awhile and also we had to open more lines of credit. We have 12 credit cards now (added a bunch of little ones… Discount Tire, Toys R Us, Home Depot), but the good news is that 3 are already paid off and 4 have balances under $500. We also had to take on a new car loan within a week of the house closing when my car died suddenly, so that cut into giving more than the minimum to the credit cards. But this past Spring/Summer I’ve been able to pay above the minimum & I’ve improved my FICO score by 33 points and 2 of my cards increased my limit without me asking for it! Although things are tight just this minute (lack of overtime), I’m way more hopeful for our financial future!

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