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Yep – I’m a Joiner!
June Budget Update
One of the main differences to the June budget update is that I’ve raised the allowable grocery spend to $500.
Mostly this is because summer is a time of fresh food. We will happily grab a loaf of crusty bread, slice up some cheese and tomatoes and have that as dinner. From non-lettuce based salads (lettuce is annoying – difficult to eat and you can get more nutrition from other leafy greens) to fruit salads to just having a cut-up honeydew…we are reveling in summer.
The garden should also produce some veggies in the next couple of months that may keep our grocery bill from hitting the higher mark we’ve set.
Sadly, the trees we planted in the backyard yesterday (apricot and peach) won’t actually start producing fruit until next year or the year after. But in a couple of years it will be nice to wander into the backyard for a breakfast peach.
Right now we are trying to decide if, now that our gas bill has dropped like a rock to under $50, we should do our own “budget plan” and send in more than we owe to create a buffer. I know the smart money is on putting that cash into an interest-bearing savings account and then using it when the large bills come again….but the sticker shock of winter gas bills is painful! Avoiding that sticker shock could be nice.
Or, we could do the smart thing and put that money into savings and then use it to pay things in chunks. Like car insurance. We pay a $7 “convenience fee” to make monthly payments on the auto. Plus I think you get a 10% discount off of your overall rate when you pay in full. I’m not 100% sure about that – I have to double check.
And I’d like to pay for the semesters of next year’s preschool all at once too. First semester is $997 per kid.
That means in August I’d need like $1000 to pay for the auto insurance in full (don’t tell me to shop around, I do, that rate is due to the husband’s former driving record – just a couple of “they braked for no reason in front of me” or “she whipped out in front of me and then slammed on the breaks” fender benders)
Then in September I’d need about $2000 to drop on preschool from September through January.
But how nice would it be to get rid of those monthly-payment rows on the spreadsheet?
I’d like to get rid of as many rows as possible for monthly payments. Then I wouldn’t care when checks came in during the month because it would be more like….whenever they come in pop them into savings until the money is needed for a larger expense….
Way less stressful.
We would also do this for my server hosting, if possible as well as any extra-curricular activities for the kids. Abby’s gymnastics class was paid-in-full for the term and it’s nice to not have to worry about a monthly payment…no matter how small it is. The $50/mo. for Sadie’s dance class has become annoying. I plan on paying for next term in full.
For months I was just so happy we had reduced our expenses and raised our income enough to pay the bills and add to savings that I didn’t think about tweaking a good thing. But now that I feel more secure, the initial glow and shine of a balanced budget is wearing off, and that means tweaks and improvements are in order.
Even at the current rate I don’t see us being debt-free for a million years (including the mortgage) but that does not discourage my desire to stash as much cash as possible into the savings account. To me, having a savings account is almost more amazing than paying off debt. I mean, it’s a savings account. Money that just sits there.
Next goal? To make that savings account a full month of expenses. I think we can do that by the end of June. If so, paying the car insurance in full for August will be absolutely possible.
While I’m Gone Enjoy My Kid
I’m in my childbirth class right now.
Wonder if I’m having a good time…
Here are a few pictures I took of my darling 4yo. who was obviously just. that. tired.
(Yes, she picked her own outfit – it’s not like it was a school day)
I’m thinking about cropping these and blowing them up to poster size, then storing them until prom night or some other completely inappropriate potentially embarrassing time in my lovely daughter’s life.
Because I’m that rock star mom.
Feeling Broke When You Aren’t
Sometimes it happens to all of us.
Even when there is money, if it’s in a place where we don’t think about it (usually because it’s a savings account) we don’t think about it – that means when the bank account shows $80 we start freaking out.
I think the main reason this happens is that we just haven’t not been broke all that long. There is still the lingering fear that this is all a dream and any moment it could change.
Well, honestly, it could all change in a moment. But with the excessive number of ways we bring money into this house, even if one thing were to go away the rest will probably stay in place. It’s more secure than a one income family (at least in my mind) because all of our eggs aren’t hanging out in one basket.
But broke is just that – a feeling. We didn’t really not have money. We had an emergency fund and were expecting checks any day now. One came in the mail today and solved the dilemma of paying for this weekend’s childbirthing class.
Of course the one I got is for work that was done after the last invoice I sent in…confusing, right? So there is still another (large) check coming that will rock it’s way directly into the savings account. Heck, I may use that check to open an Ally account (formerly GMAC) – the interest rate is better than ING Direct and since they got all that bailout money it’s not like they’re going to close. Of course, what I’d really like is to get my hands on that money market account they have in case I needed to write a check in case of emergency…but…after my experience with Charles Schwab (they don’t care about your debt to income ratio, they only care about your credit score…paying off your debts RUINS your credit score…at least for the short term…)
The thing is, we can’t make any more leaps and bounds with our debt until I have an extra $17,500 to hand over to the US Department of Education for my student loans. (We’re paying mine off first because it’s less than the husband’s.) Sure, I could make smaller payments, but that’s just not how I want to do it. I want that money in a savings account until there is enough.
I don’t need the psychological satisfaction of making extra payments – I need the psychological satisfaction that if everything I had disappeared tomorrow, I’d have a big ass savings account to pad my fall from glory.
That is where I differ from the financial experts. If I have money in a savings account I don’t spend it. We have access to a credit card, and we actually used it over the weekend to get a great deal on this:
Yes…it is something I thought I’d never see in my home….furniture no stranger’s butt has been on. Feast your eyes on the amazingness of a couch no one else’s kids have puked on. Plus it was on sale. I got this bad boy in my home for $300 including the accent pillows and delivery. Is it thrift store cheap? No. Is it brand new and more comfortable than *any other* piece of furniture in my house? YES!
But I’m also paying that off on Wednesday. So it’s not like we’re getting sucked into soem freaky wormhole of consumer debt and overspending. Maybe it was a justification to think it was okay to buy something on credit because I didn’t have the money at the time – but it would cost me another $100 to buy the same item three days later. I don’t know. I’m not judging myself too harshly because for SIX YEARS now I’ve been sitting on couches that have been older than dirt and broken down past all hope of being remotely comfortable. Couches that have had duct tape on the back to keep the protuding springs in – and away from my kids’ skin.
I will never be as frugal as a Duggar. I will never be any more extreme in my frugality than I am right now. I will lower my standards (I’m not a microfiber fan, and brown would not have been my first choice in couch colors) to get what I want, but I have my limits.
I want to pay off the rest of my debt so I can have money to put in savings with a little left over to buy things like chairs. I figure most people spend what I did on my couch eating out in a month (or less!) so I’m not doing too bad with my splurge.
I just have to remember I’m not broke. Sometimes it’s really difficult…but thankfully the Internet lets me access the emergency fund online (as well as the investment account…I could cash it out if I had to) so I can look and SEE I’m not broke.
The visual helps a lot.
Mutual Funds vs. Stocks
I know according to most financial advice people I should not, under any circumstances, invest in the stock market in any way until my debt is cleared up.
Screw that.
I don’t want to pass up clearance prices now to come back in five years when the market has stabalized. If that makes me reckless, so be it. It’ not like I’m financing a new car or something.
Here’s my question:
Why would I invest in a mutual fund?
If I choose five stocks (or 10 or 15) isn’t that (basically) the same thing as being in a mutual fund but without the fees?
I understand that a mutual fund has a manager that watches the stocks within the fund and makes changes as appropriate, but how is that different than day trading? (Other than the fact it’s someone else doing the day trading.)
It seems to me that a diversified portfolio of stocks is basically the same thing as a mutual fund. Ok, a diversified portfolio is more like a Blue Chip Mutual Fund or something…if I bought shares in a Technology Mutual Fund it would *not* be diversified except within that sector.
I hope this isn’t the dumbest investment question on the face of the earth, but it has had me confused for a while now. I guess I just feel more comfortable making my own decisions than handing my money over to some fund manager and hoping for the best.
Your thoughts? I’d love to know your answer to this!
Because Running Away Would Be Cowardly
My lovely little four year old.
So independent. So stubborn. So adorable.
She decided a few days ago that she wanted to live with the neighbors. Did she pack a little snack and try to sneak away? Oh hell no. She came right up to me and said, “I’m not sure I love you anymore and want to go live with the neighbors.”
Uh…..
So, thinking I’m a Smarty McFartyPants I say, “How will you live? You need to pay rent if you live there.”
She said, “I’ll go work at McDonalds.”
Crap.
I said, “The neighbors don’t want you to live with them, they have their own family.”
She said, “You’re having another baby, mom, so families can change.” (this was said in the most condescending tone of voice you could possibly imagine)
I realize I’ve lost a battle of wits with a four-year-old.
So I sent her to bed. It was close enough to bedtime that it was a logical move, hoping she’d forget.
The next morning? She did not forget. She got dressed and asked me when she could leave.
I distracted her most of the day and later that afternoon she came up to me and said, “I decided I love you again so I’m going to stay here.”
Lucky me.
I’m having flash-forwards about how this conversation looks when she’s 14.
It’s not going to be pretty.
100 First-Class Financial Blogs? Nominate One!
Sorry if it felt like a tease, but I don’t actually have said list.
While there are already a few lists out there, I like that this one is nominated by blog readers. It was also first brought to my attention by Amy Derby – the law firm blogger, which gives it a seal of approval right there.
Over on The Debtress there is a call for sumissions. She is looking for 100 awesome, top-notch financial blogs. Am I asking you to nominate me? Hell no. This is a pathetic excuse for a finance blog.
I think you should vote for No Credit Needed. Hands down. I’m going to.
If you’re feeling good and have a little extra time why not put in a second recommendation for Sense to Save?
If you don’t feel like emailing and nominating, that’s fine. But if you’re not reading those two blogs…you should be.
Go, nominate, and help others get hold of a great list that could change a life. Yes, it sounds hokey, but I’m completely serious. Getting a handle on your money will allow you and your spouse or partner or random friend to argue about things like whether or not you really like Cilantro – only to have him proven right when you chew on a leaf at the plant store and spend the next five minutes trying to spit it out.
Who doesn’t want that life?
Memorial Day Rememberance and Money Splurge
In our family, Memorial Day makes us think about my great-grandmother’s brother who died in WWII. It’s a touching story of how she woke up in the middle of the night, screamed, and knew her brother was dead. Cool in that creepy Time Life way.
We also talk about wars, people fighting (or who fought) in them, and try to come to some kind of understanding of how it all started and why it can’t stop. We haven’t gotten anywhere near an answer for years but we still feel it’s important to remember and since we’re a family of talkers, a moment of silence isn’t going to happen, we figure we’re doing our part to remember by trying to understand – that’s just our nature ’round here.
The topic ended up turning to money because wars and money are so closely intertwined and then went to the discussion of how we got through baby step #1 and are a good deal through baby step #2 on Dave Ramsey’s baby steps. I had a friend who didn’t know who Dave Ramsey was (a former stock daytrader, so I didn’t hold out much hope for understanding) and since the Town Hall for Hope was on – I recommend it, it had good stuff in there – I explained it. He didn’t try to smack down the logic … but I also got the impression that it wasn’t the decision for everyone.
But we realized we’d been gazelle intense around here for a while and had not splurged on anything. I’ve been wanting a new couch for about three years now, here’s the backstory:
Our first couch as a married couple came from my great-grandmother’s living room. I’d had it with me in many apartments and it came to our house. It fell apart shortly after the move. It was replaced with….
….a sleeper sofa from his grandmother’s basement – the couch was uncomfortable, narrow, and a sleeper. It also had springs that poked out the back that we kept under control using duct tape. Awesome, right?
When we saw the Memorial Day Sale at Value City (what, when I say splurge I don’t mean custom furniture lol) and a couch for $299 I thought, “Hey, that’s not too big a splurge and it doesn’t involve touching the emergency fund…I’m in!” The only drawback was that delivery was $100.
I told hubby if he could go into the store and come out with the $299 couch, two throw pillows (list price $29.99 ea) and $50 shipping I’d be happy. (I picked $50 for shippping because that’s about how much a U-Haul would cost for us to move it ourselves.) He left…came back….and almost got that. Shipping was $69.99 – $20 more than I wanted to spend, but less than if he had just gone and bought the couch without even trying to bring them down.
Our couch will be delivered on Friday and I’m thrilled.
Here is another post from Blogging Away Debt – she did not go the “buy a new couch route” – I especially love how in the comments someone got a raw deal on a used couch and shows the pricetag of getting that used couch.
Finance Update (finally, right?)
Whew. It’s been a while since I’ve talked about finances, right?
Our finances are solidly ok. We have our baby emergency fund (a la Dave Ramsey) and it will be greatly improved when I receive the check from my formerly-freelance-now-employee gig for the month of April.
A whole month’s check we expected around the 10th that still hasn’t come as of today, the 23rd. Really, both Randy and I are amazed that we haven’t needed it. We even paid out $450 to a writer this month…all on only part of the income we thought we were going to have coming in this month.
Which gave us an idea.
What if we just put the checks from the one gig straight into savings when we get them?
Sure, it would mean living on the lower-income gig, but why would that be so bad? Sure we could use it to make slightly higher mortgage payments and slightly higher student loan payments…but why not save that money and then, when there is enough, pay off one of the student loans entirely instead of using the snowball method?
I understand if we were spenders that this just wouldn’t work, but really, now that we have enough money and aren’t always freaking out and thinking when we have an extra $20 it might be the very last extra $20 we will ever have (and I’m not exaggerating, that’s really what it felt like) we’re way less likely to spend it on stuff we shouldn’t.
Really, once you have the feeling of having money in a savings account you just don’t touch, it becomes easier and easier not to spend the money. We are less likely to be lured in by sales at the store – knowing that if we really needed it we could shop around or wait until the next sale – because there will be money if we need it.
So, in just a couple years it seems we’ve gone from not being able to put 10% of our income into a savings account to deciding to put 50% of our income into a savings account.
We are officially living *way* below our means and it doesn’t feel like we’re giving up a thing.
Amazing.
Image Source: xymonau
