Really Easy Budgeting

When I was 10 years old, my parents gave me my first allowance, 3 boxes, and a deal. Each week I would receive an allowance worth my age in years (So at 10 I got $10 a week, at 11, $11. etc...). BUT I couldn't just take the money and put it all in my wallet.

Each box represented a bank account: checking, savings, and long-term savings. I would choose a fixed amount to go in each box each week and I couldn't transfer money unless it was absolutely necessary. It was a very simple method that taught me at an early age to save money and delay gratification (which we all know is not easy at any age).

Amanda Steinberg, CEO at Daily Worth, posted recently about a Budgeting Solution to Keep You Sane. that is a grown-up version (with a twist) of what I learned as a kid.

This is the author's method: Then, I came up with an ingenious solution: I took the old tactic of multiple savings accounts and twisted it—I opened multiple checking accounts. 

	First, I figured out my monthly nut (more-or-less fixed expenses like rent, car payment, child care, etc.). Now I keep that amount in my main checking account, at Bank of America. That’s my bills account.
	Next, I identified how much CASH I needed each month for variable expenses like groceries, diapers, Vanity Fair, gas, babysitters, and occasional cocktails with Ramit.

I now transfer $200 a week (automated) from my checking account into a separate ING Direct account* with its own debit card. That’s myspending account.

Why it works: Now I can call up the balance in my spending account on my iPhone, and I know exactly how much money I can spend. And I never “accidentally” spend the money that’s meant for bills.

For savings, I automatically transfer $50 from checking into three different savings accountseach pay period so that I don’t overspend on clothes, gifts or travel.

 

We keep multiple savings and multiple checkings but where the money goes is not so clearly defined. Everyone has their own budgeting techniques and their own style of banking but I think that this one is extremely useful! Try it out...or your version of it. 

Choosing What's Important: Wedding Style

Mike and I are not particularly traditional people, especially when it comes to our wedding. Luckily, being non-traditional has really helped us stretch the wedding money. 

I've written about how much it will cost us to have a small-ish wedding (50-some people) over here and how I really hoped it would cost less. We've made a lot of choices that have gotten us to our current price tag and I have to tell you, a lot of those choices were cutting out traditional stuff that would've cost an arm and a leg. 

Here are some examples: 

Flowers - I'm not having a bouquet, and I don't want one so that works for me. We chose a venue that doesn't really need help in the decoration department so all we're doing flower-wise are some center pieces. I bought my flowers from Blooms By The Box which is an on line wholesale flower business. They're the only company I saw that didn't have absolutely giant minimum purchase requirements. 

Outfits - I bought my dress on Etsy. Yup, I know it's scary but I just could NOT handle the thought of being in a bridal boutique surrounded by thousands of dollar dresses. No way!! The designer was wonderful and so communicative. She got me the dress ridiculously early and I've had time to get it altered and play dress up occasionally. Only once have I had mild dress regret and that was slapped away when I realized I paid a reasonable amount of money for a custom made, beautiful dress. Also I'm using gorgeous jewelry I already have and never have the opportunity to wear and I bought comfortable shoes online for less than $100. I know people say, it's your wedding, spend big, but I cannot justify $700 for a pair of shoes just because it's my wedding. It's also my life, and I have real expenses in my life that $700 could go towards and make me a lot happier for it. 

Rehearsal dinner - Now I think you don't have to have one at all because 1) they're expensive 2) they're not necessary. However, we have a lot of family coming from across the country and we wanted an opportunity to hang out with them before the wedding. One great piece of advice that my sister kept giving was, "Anna, it can look any way you want it to look". So our rehearsal dinner is at a local brewery and our caterer is doing a southern-bbq style meal. And, because we aren't being fancy shmancy about it, the price is totally reasonable. 

Favors - I don't believe favors that you pay for. It's just an added thing to think about/purchase/add to the list. And I have to tell you, it's likely your guests won't use them anyway! If we actually buckle down and finish our project, our favors are free, semi-useful, pertinent to our relationship, and oh yeah, free. 

Wedding cakes - These things are stupid expensive and I might buckle down and buy and/or make one but our venue is strict about this - if we bring one in, they still charge us money per plate to serve it to our guests. Welcome to the crazy world of weddings. 

We're not having a band (yay ipod dj!), we aren't serving liquor (just wine and beer), I'm not getting mani/pedi/makeup, I mean the list goes on for what we aren't doing. 

But what we are going to do is have an awesome time, on a reasonable(ish) budget and I promise we are NOT going to miss the slew of traditional things we are choosing not to buy into. 

To learn more about some of the evils of the Wedding Industrial Complex (WIC) please visit Apracticalwedding.com 

Frugal v. Miser: The Tale of the Phone Bill

I like to say I'm a frugal person. I don't go on shopping sprees, I'm pretty good at sticking to a budget, I find ways to save. I think that's different from being a miser....I know I can spend and the world won't collapse around me.

Unfortunately, I had a recent encounter with miser-me.

Last week Mike and I got an ugly surprise in the form of the phone bill. In the last month I had used my anytime minutes, a few hundred of my rollover minutes, and still gone over costing us roughly $100 extra on the phone bill. Ouch! I was in trouble.

I've never had this issue with the phone before but I think that's because I've been busier with school, internships, work, anything. Now, when people call, I pretty much answer at any time because let's face it, the life of an unemployed person can be a little lonely.

Mike suggested I increase my minutes and thus increase the phone bill. With the upcoming wedding, I felt I had to be pretty strict about it. "No", I said, "I can cut back, I can handle it". I felt committed to this line, until I talked to my sister and she said that when she's not willing to spend pennies, she knows it's being miserly v. frugal.

I decided to take a look at the plan and figure out what I could do. First things first, check out my usage so far this month. I was half way into my billing cycle and had used up 90% of my minutes. That was obviously not going to work for me. Doubling my anytime minutes only costs me $16 more per month. Since I know we can afford it, and we can't afford to lose my sanity, I went ahead and did it. At the same time, I saw that AT&T must have changed their texting plans (it used to be 200 texts, 1500 texts, 2000 texts, unlimited...or something). I knew there was no way 200 would work for me but 1500 is just too much. I was able to reduce my texting plan to 1000 which saves me $5/mth.

I came out only spending $11 more per month and with WAY more sanity.

Here's the lesson: Being frugal is good - saving is good! Being a miser -- no good. If you're really into saving and cutting down on bills take a look and make sure that you're not making yourself miserable in the process. I think my sanity is worth at least $11/month.

In Preparation for Spain

After the upcoming nuptials, Mike and I will be heading to Spain for two weeks.

Apparently, the only thing that rivals the expense of a wedding, is the honeymoon!

I have to say, I was not completely prepared for the sticker shock that came with planning this trip. I've always done past travels on a shoe string budget; it's pretty easy to be cheap in Ghana. However, as I plan this new trip with my hubby, I find myself completely unwilling to shack up in dorm-style hostels and eat granola bars for 2 out of 3 meals.

So, certain expenses come with those choices:

Airplane tickets for two -- This one was hefty but we bought them many months ago so it doesn't seem like a financial burden now.

Two weeks worth of hotels ranging from $50-$150 a night --Roughly $1,500

Meals -- Unclear as of yet. Probably a lot. Have I mentioned that we're foodies? We're budgeting $2,500.

Car rental -- It was important for us to take these two weeks to go on lots of adventures which means that we want to travel all over. That also means, realistically, a car rental. Roughly $500 for the 2 weeks.

We've got some money set aside for museum tickets etc. but our goals aren't really to see all the "guide book" sights. Mostly we'll be hiking, meandering, figuring out the agenda day-by-day.

In preparation - I needed good walking shoes ($70). I do mean "need". This wasn't just a good excuse to buy some new cutsie shoes. I also bought a cotton dress good for walking around and going out at night too (less of a need, but still, I categorize it as a honeymoon expense @ $50). Luckily Mike has had fewer needs!

During my "OH MY GOD I"M FREAKING OUT ABOUT MONEY" phases Mike is wonderful and says, "you know honey, we can cancel  the honeymoon if we need to"

N-O, NO! That is not an option. One, we'd regret it. Two, we've already sunk money into the plane tickets. Three, I want to go!

We haven't traveled abroad together before traveling is such a passion for both of us so I can't imagine a world in which we don't go on a honeymoon.

Obviously, all of those expenses add up - We aren't going into any debt to cover them (or the wedding) but we will come back with significantly less in our savings.

Paying Down Debt

Mango Grove did a brief series on Strategies to Pay Down Your Debt over the past month or so. I think a lot of the strategies they suggest are really helpful so I wanted to share them here:

1. Commit to Change
Step 1 is always the hardest right?

"Depending on what study you look at, anywhere from 70-77% of Americans are living paycheck-to-paycheck.  Many people commonly associate the paycheck-to-paycheck lifestyle as a problem only low-income households deal with, but nothing could be further than the truth.

According to a survey published by CareerBuilder.co, 21% of workers who earn at least $100,000 also claim to live paycheck-to-paycheck.   Americans, poor and rich alike, seem to be struggling to maintain their lifestyles, let alone put away any savings."

I think if more of those people could make a commitment to changing their spending habits, they'd have an easier time reducing their debt and increasing their savings.

2. Assess Your Current Situation
Once you've committed to change, you're going to need to know where to start. This part is pretty scary. Even as someone who isn't living paycheck to paycheck, it can be difficult to take an ACTUAL look at what you spend. One great resource that can help you track your spending and assess what you have and what you owe is Mint.com

3. Cut Your Expenses
Yes, cutting your expenses seems obvious and sometimes people don't know where they have any wiggle room to make cuts. There's almost always room. Are you limiting your spending on energy? Here are some tips. Are you making sure all of your "needs" are really needs? What about evaluating your cell phone plan (this is a current sore point with Mike and I since I just went over my minutes by a BUTT ton).

4. Pay off Your Debt
5. Start Saving
I think 4 and 5 should come together. Everyone handles this issue differently but for me, it's important to have a set of savings for the just-in-case moments. I wish I could remember where I saw it....but people on average have $2000 worth of unexpected expenses per year! (Don't quote me since I can't cite it). Even if you've got a lot of debt (like yours truly), try not to exhaust all of your savings in the process of paying down that debt.

6. Boost Your Income
Side jobs, Extra shifts, Raise, Promotion, etc....These are the most obvious solutions but these options aren't available for everyone. What are some other great ways to boost your income?

7. Avoid Lifestyle Inflation
I think this step is one of the hardest. Once you've got extra income, you're going to want to spend it! Remember step 1 and that commitment to change? Reaffirm that commitment NOW so that you don't slip into old habits with a bigger paycheck. Otherwise you might end up having to repeat the steps.

Philanthropy

I'm curious - do you give?

Which organizations get your money and why?

Do you have a system for determining how much to give?

At the moment, Mike and I are not at all philanthropic. I know the kind of organization I would give to but right now, I don't feel like it's in my budget. I'm sure a lot of other people feel that way too. But I also know there are plenty of people with tight budgets who still find ways to give.

Spending on Professional Development

I'm not willing to spend a ton of money on classes for professional development, especially as someone who isn't bringing a lot of coin to the family at the moment.

However, one opportunity arose recently that is literally 2 blocks away from my apartment. It's a two day seminar on advanced advocacy for $45. I bit the bullet and have decided to go, and more importantly, decided to spend the money. 

I think this is a tricky balance for people to figure out. How much can you budget for classes, development, connections? Do you think it's worth it? To what extent? 

I'm glad I have decided to go and really hoping to get something good out of it.

To find events, free or otherwise, I stay subscribed to my graduate school's listserve, and try to watch calendars at local universities or organizations I really like. 

Weddings ain't cheap

Because we haven't actually had our wedding yet, I don't feel comfortable giving all the figures. Instead I'll talk about our decision making process with some occasional figures dropped in.

Mike and I got engaged about a year ago. When we first started talking about what we wanted our wedding to look like it went something like this:

• Elopement 
• Small wedding
• Elopement
• Elopement abroad
• Small wedding abroad
• Small wedding in California
• Small wedding on the East Coast 

Bah!!! So many choices!!!!!!!

It basically came down to cost and how much work we were willing to take on.

Mike's family lives in California and that's where we met and got engaged. We love it there! The weather is perfect, everything is beautiful but go figure, that comes with a sizable price tag. On top of that, we would have had to plan it all from the East Coast - uh...no, not so likely.

Eloping was my idea and I fought for it until the bitter end. My belief was that all the money we were going to spend and our families were going to spend could just as easily and nicely go towards my massive student debt.  Mike however is 10 years my senior and was pretty clear that he wanted a wedding of some sort.

Fine! Okay, so obviously we're having one since I'm writing about it in this post.

Budgeting II: It's hard being a fashionista

I love my shoes, and fancy dresses, sparkly earrings, and lingerie.

I'm not crazy in love with these things. I've never gone into debt for clothing. I don't have any designer label anything but I search and search and search for fun shiny things online all the time. It takes up time. But you know what unemployed people have? Lots of time!!

I start my morning with the obligatory cup of coffee, job search, my blog roll and then slowly and steadily browsing the internet for sales. Mind you, I almost never actually buy anything from these sales but I browse anyway. I like to know what's out there and new and available so the moment I have that awesomely paying new job of wonder, I can get myself, my fiance, or our home something sparkly.

For me, making a purchase is a process. I want it to be beautiful but not too expensive. I want to know that the piece I'm getting is a quality one that I will have for years to come. Most of the pieces on this rack are at least 4 years old and I love them, wear them, still get compliments on them.

The way I budget fashion, home decorating pieces, and art is really just by being me.

If it's a "need", for example, walking shoes for the honeymoon, or a suit for interviews, I do my research, and buy it. If it's a want, it goes into the really large pile of wants. But you've got to prioritize. For example, my biggest want is eliminating my student debt. That trumps everything else. I don't consider myself a miser - If I need a winter coat, I get one.

But right now, a shopping spree at ModCloth is not in the cards.

A lot of my tight fistedness with the current "wants" budget also has to do with the fact that Mike and I are about to get married and that ain't cheap. The wedding is probably one of the biggest financial "wants" either of us will ever have. When you think about it that way, it makes it easier not to make random online purchases, no matter how much you want to.

We all browse online for fun - where do you browse? and how do you keep yourself from making purchases when they aren't "needs"?

Budgeting I: Food & Booze

Something I've already learned about starting a series on a blog -- don't announce on a Thurs. that round 1 will begin on Friday. I'll get it right next time!

But I'm sticking to it and talking about how we budget for food and booze. Or at least how I'd like for us to.

The wine is sacrosanct in our house - it's not one of those things we feel willing to cut out entirely, or even in half.

I've mentioned before that both of our families are entertaining families with savvy backgrounds in beer and wine. I will readily admit that since graduating from my Master's program, I drink A LOT less. Which is great for both my liver and our budget. However, now that we are entertaining regularly, we've started exploring with cocktails so our "bar" requires a bit more specific maintenance and upkeep.

When Mike and I met he was living in Sonoma County. I think it's perfectly reasonable that we belong to one wine club. This costs us close to $200 every six months. When we lived in DC, we could readily go to Trader Joe's to restock on wine for very little money. Since we drink less and TJs isn't as easy of an option, we buy a lot less wine. But it's summer and it's frickin' hot outside so beer is a bit more in right now! Excluding bar maintenance (hard liquor) we spend on average, $100 per month on beer and wine for the house.

Introducing a Brief Budgeting Series

Budgeting has become a pretty big part of my life recently for a couple of reasons:

1. I'm getting married soon - that means throwing a wedding with our money and our parents' money. Budgets are pretty important here.

2. I have a lot of time on my hands. And since I'm not bringing in the paychecks, I think it's pretty important to have a good grip on what we have, what we can spend and what we can put away into savings.

Therefore, I want to start a brief series on budgeting, starting tomorrow morning where I'll talk about what it is we budget for and how we decide what everything is worth.

I don't know that our way is the BEST way but so far, it's worked for us.

For more tips on budgeting check out GetRichSlowly.org

Also, I'm a big fan of Mint.com. They've got tons of useful tools to help with budgeting and following spending trends.

Staying Afloat

"…I am not unemployed, I'm on sabbatical."
"Hey, don't get religious on me, okay?"

Simply Blog had a good post about 8 Great Ways to Stay Afloat in Between Jobs .


Check out this video for tips during unemployment:

If you don't want to watch the video, here are the tips for you:

1. Tell everyone you know that you're unemployed.
I know this one might be really hard at first. I definitely wasn't very open in the first few months of unemployment. But to my surprise, I've met people, told them I was unemployed, and they've done everything they could to help. People have offered to get me in touch with their contacts, and even to try to create a position for me in their company. You never know what could happen.

2. Apply for unemployment benefits.
This is a sticky wicket for those recent grads. who have only had the opportunity to work part-time or do internships. You aren't eligible for unemployment unless you've worked at least 26 weeks full-time. While I understand the policy, what can struggling recent grads do? No really, I'm asking you.

3. Create a budget and stick to it!
I love staying on top of my financials. In my relationship with my fiance, I'm definitely the one who is most up-to-date on where we are and what we can do. One of my favorite tools is Mint. You can import your information from all of your banks, investments, and debts. Mint will make a budget for you or you can customize one for yourself. Get Rich Slowly has also helped me figure out how to create and stick to a budget that works for me.

4. Keep your mind open to all opportunities.
I think this is particularly difficult for recent masters level graduates who have had their heart set on one particular kind of job. It's difficult to apply for a job that's not exactly in your line of training or where your heart is set.

5. Pick up odd jobs to make extra cash.
In college I graduated with a degree in music. I always thought I would use my degree and training to teach piano lessons for extra cash but during my unemployment I hadn't really made any moves to make this happen. That changed yesterday though when I put an ad up on craigslist for my services. I've already gotten a response and I'm thrilled that I put myself out there. Why not?

6. Use this time to develop entrepreneurial talents.
*Ehem* Like blogging! Case in point.

7. Take care of yourself to avoid medical expenses.
All I have to say is, thank goodness I've been able to stay on my parents' insurance!

8. Consider applying for short-term health insurance.

There have been some negative comments, especially regarding the childishness of the video. I can see how those who have been unemployed for a long time and those who are older might not find these tips particularly useful or relevant BUT I can see how it applies to youth.