Tuesday, March 25, 2008

Money Talk Tuesday

Okay so last week I spent a lot of time figuring out our yearly expenses. Let's just say that process was eye opening... both in goods ways and bad. We had never really looked at our expenses in a "big picture" sort of way before and I don't really know how to describe it but to say that things look differently month to month... or feel different. I have to say I was a bit overwhelmed by the largeness of all the numbers and it took me a few days to absorb all that information and come to terms with it.

Now figuring out one year's worth of expenses does not a budget make. Last year saw the birth of Baby, and a huge weight loss for me, and a surgery for Kid... events that won't be happening this year. I have to buy a whole new wardrobe since I've shrunk out of all my previous clothing, and although I'm pretty cheap when it comes to my threads, buying all new everything requires a bit more cash than say a little seasonal spruce up. Every year has got its blips on the radar. Last year a new furnace and air conditioner... this year a new exterior paint job. It's going to take me a few years of tracking to pick up on a meaningful trend.

As I've said before we are not in a financial crisis. We have our bills and we are fortunate enough to be able to pay them. But I do not feel on top of things, or well informed, or secure. We are paying our bills, yes, but we are spending every dime we make to do so. So I want to change that. When I sat down and really added up how much we spend it seemed so obvious... I mean crystal clear... that we could in fact spend less. We just have to choose to do it. So I've set a new goal. My goal is to reduce our spending by $300 a month. Can I do it? I'm not sure... but what have I got to lose?

I am sure I can't just shave off that much all at once. I'm just going to see if I can plug one or two "leaks" and maybe add one or two more as we go along. By June I'd like to see us spending at least $300 less a month on mindless splurge purchases.

This is how I'm going to do it:

#1 I am only going to Target twice a month to make purchases and I'm going to shop with a list! (we have prescriptions and we have to go that often) I am also going to put back 3 items from my cart before check out to account for impulse buys. I will not get a mocha while I'm there!

#2 I am going to stick to my grocery list and can only keep ONE impulse buy per trip. Seriously. That will probably save me $300 month right there!

#3 Kid & Mr F must limit their date night dining choices to locations that can feed them for under $20.

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Got money on the brain? Head on over to Smoochiefrog's Money Monday post.

36 comments:

Andrea said...

Im in denial I dont even want to know what we spend over a year, I think i might become a penny pinching fanatic and Im already so bad at second guessing every dollar I spend.

emmyjw said...

We are in the same place, we are fine,paying all the bills etc... but I feel like we really need to have more of a plan and save more. It is a lot of work to track it all, we have done it before then had a computer crash and lost the data and gave up, it's time to suck it up and do it again though.

Cara said...

Sounds like a good plan.

In the last 9 months I have cut out lunch expenses. I went from eating out almost 5 days a week for lunch to eating out once a month or so. That has saved me a LOT!

I am working on more changes as well. I am looking forward to more ideas!

Mrs. Furious said...

Andrea,
Oh it was a scary scary place to go! Seriously... it really stressed me out for a couple of day... but I feel better about it now. I think (well for us) the number is significantly more than we thought so not only do you have to think about that but I wasn't prepared for the new reality aspect of it.


Emmy,
computer crash?!? That's why I write it all out in a notebook... I actually said to Mr F while I was doing it "get me an abacus!" ;)

Mrs. Furious said...

Cara,
My mom has one spending free month. Outside of groceries she doesn't do any other shopping. She says it saves a lot and helps offset her spending in other months. I couldn't just do that any old month but certain mid-season months I could like April & July... I usually have all the clothes we need and other seasonal stuff by that time.

Smoochiefrog said...

Here's an idea. How about if date night is reduced to once a month instead of every week. I know it's important for them, but it may be more special if it's a little more infrequent.

Or...

They go out twice a month but only eat out one of those times. The other time they could go to a park and play, walk through town together, or just go out for dessert at like Baskin Robbins.

If you alter their date nights, that will save some money right there. Just an idea. :)

P.S. Did you see I linked ya from yesterday's Money Monday post? :)

Mrs. Furious said...

Hey Smooch... I'll put in your link when I get back. Gotta get Kid to school and go grocery shopping!!

Randi said...

I don't think you're any different from anybody else, we all spend all our money no matter how much we make. Seriously, if we started to make less, we'd be just fine. It always JUST works out. So we started automatic withdrawls of $300 a month and now pay into a savings and investment account just like it's any other bill that we pay each month. We didn't even notice it's not there. It's crazy.

Daniela said...

Hmm... date night could mean dinner at home then a trip to the library to read oodles of kid books, which is free. Just cutting out that one weeknight meal and putting the $20/wk into a Roth IRA could mean $149K for retirement in 30 years (at an average return rate of 9.5%; which is actually about 0.5% below average.) That's a hundred and fifty thousand dollars! Especially since you're already getting takeout on Fridays.

I'm still highly recommending "All Your Worth" by Elizabeth Warren and Amelia Warren Tyagi. It's a lifetime money plan that is uber-easy to understand.

Liz said...

I like your idea of putting back 3 items from the cart and allowing 1 impulse purchase per trip. I am definitely going to try these. Maybe I'll post them on my habit blog.

Story: on a recent trip to Target I filled up my cart with a bunch of impulse "treats" for myself. Charlie (2 y o) had also grabbed up a plastic dinosaur when we were strolling through a toy aisle, and I felt it would be unfair to make him put it back since he had just seen me grab all these things for myself. (I also wanted to avoid the conflict, admittedly.) But at the end of our trip I looked at everything in the cart and said to Charlie, "Jeez, I have just got to put some of this back." So I put about 3 things back. Meanwhile Charlie had tossed the dino into the cart and was interested in something else. So I asked, "Could we put the dinosaur back too?" and he nodded and said, "Put it back! Put it back!" Then he got to toss it in the bin when we went back to the toy section. I am thinking this could be our new fun game to play when we go shopping.

Liz said...

PS - Have you thought about using mint.com or wesabe.com?

Mrs. Furious said...

Okay I think I need to just make this clear...
I am not asking for advice on how *I* can save on my budget. I am opening up our experiences to create a dialogue about how people spend/save/etc. I think that it is impossible for one person to look at another person's spending and offer advice without projecting their own values, circumstances, issues onto the other party. I am happy for people to share their own cost cutting ideas in hopes that it might help me or someone else. But I again I am not posting me info so that people can *help* me see where I am overspending. :)

Everyone's experience, quality of life, and goals are different. We eat out or do take out 2x a week... date night counts as one of those nights if they do it... that is a non-negotiable set up and is more than worth the few dollars saved (I'd still have to buy food that ate at home) for the quality bonding time they get.

Smoochiefrog said...

Totally wasn't Jonesing for anything, just wanted to make sure you saw I did it.

So whatcha think about the date night idea? :)

Have I said I'm impatient yet? :)

P.O.M. said...

That is an awesome plan. I, too am on "saving spree" because it makes my unstable life feel a little more secure. (I know - I'm a control freak). My living paycheck to paycheck without money in the bank was really scary - especially for a single gal with no saftey net.

Mrs. Furious said...

Randi,
I know! I'm planning to take $150 out of each of Mr F's paychecks and putting them right into a high yield savings account. Once we're doing that for a while I'll see if I can up it.


Daniela,
I'll have to check into that book... I'm going to go see if they've got it at the library.



Liz,
I started the impulse thing with groceries a little while back and it really opened my eyes to how many I sneak in there... so I'm just going to try and do that at Target. When I get my 10% off card I am going to allow myself to thoroughly comb the store though ;)


Smoochiefrog,
The date nights are not every week... they go while Baby & I are at an evening class that is of course timed at dinner. The $20 is a max figure they often do/can spend less. But it isn't something we are looking to cut out. It has had a tremendous effect on their relationship... and they need to eat during that time anyway... then they go to the library afterwards. I understand the less frequent =more special mentality but I don't actually always think that is true. One hour a week of undivided Dad time eating out at a restaurant that Mom won't step foot in, feeling united against the world, is worth $10-$20/week and she'll always remember it. Baby won't have this evening class forever... probably only one more session... and their date night will end anyway.

Mrs. Furious said...

P.O.M.,
control freak?!?
I wouldn't know anything about that! ;)
I think if I can do this and know I'm making an effort and that there is tangible proof I'll feel a lot more zen about it.

Mrs. Furious said...

Daniela,
I'm not sure how you are coming up with your figure. $20 week x 52 weeks = $1040
invested in a Roth IRA at 9.5% for 30 years = $13,900.00 NOT $149K!

they aren't going to go out to eat once a week for 30 years this is just the set up for this year with our schedule. She'll be married and out of the house long before 30 years is up (hopefully).

Mrs. Furious said...

Daniela,
was that unclear? it's not an annual expense so it wouldn't be an annual contribution. Although looking at 170K (the calculator I used) does spur me on to find more ways to save.

Smoochiefrog said...

I totally wasn't trying to step on toes. It was just an idea. M and Mr. Smoochiefrog go out about once a month. They do fun stuff like movies or playgrounds. M really enjoys it and is dying to do it again. They went and saw Enchanted on their last date. I had to keep telling her to zip it last night when we were watching it together. She's a walking spoiler!

Mrs. Furious said...

Smoochie,
No.. I know everyone means well... we just don't need to cut that much. And I'm not actually looking for input on our budget. Sure there are always things that could be cut but I think saving $300/month is a good starting in point and we can easily do that without the reducing date nights.

katieo said...

It's all about awareness. Once you know and control where your money goes, it's impossible to "go back." :)

katieo said...

ps
(Emmy, have you read the book?)

Mrs. Furious said...

Katieo,
there are so many parallels to diet & exercise. Once you know how many calories are in a Snickers Blizzard you never forget that either and sometimes you choose to have one anyway but you know what you are choosing.
Big surprise expense for us was travel. Not Disney... obviously that is budgeted... but we took 2 trips to visit East Coast family and BOY those trips added up to be MORE than Disney and those we're spur of the moment/guilt induced trips that were not budgeted for... in fact until I went through our credit card statements I had forgotten that we even went! I mean it is hard to say "I love ya but let's face it 3 days in CT/PA is really not worth a couple thousand dollars!" But we might actually have to say that this year.

Heather said...

I love the idea of telling people to um, try to keep in touch another way, especially when it comes to visits. My family (all on the east coast) wants me to constantly fly out (last year = 6 t6 times, but part of that was wedding planning). I mentioned that we might do Christmas on the East Coast, and now it might as well be written in stone. They're so unreasonable.

Sorry to hijack your money thread by bitching about my family. :)

I love the idea of taking $ and putting into a high-interest account. Now that I'm credit card free, I'm going to squirrel away what I was spending to pay it down, and put it into my ING account.

You can do it Mrs. F!

Marie said...

Congrats on your budget! Sounds like a good idea to me..$150 per paycheck is a GOOD hunk, and if you find you can live w/o it, and want to up it, then you can always do that!

For our budget, we try to cut back on impulse stuff, stick to a "budget" for groceries (I know how much I normally spend, so try to stay right at that amount), and limit our eating out to 1-2x/week. Other than that, we have slowly increased the amount we save by "paying" ourselves into our savings account. We started with $20/week, and once we didn't notice that anymore, increased it bit by bit. I think if you aim to cut back a TON, then your bound to go off track. Little bits and you don't notice.

And love love love that Mr. Furious and kid have date night. I would love to get dh and the girls into doing it so that they each have individual time with dad. REALLY got to work on that now that they are getting a little older and would really appreciate it!

Mrs. Furious said...

Marie,
" I think if you aim to cut back a TON, then your bound to go off track"
That's my thinking. It's like a diet if you go crazy crash diet before you know it you're driving through a Mc D's ;)

I will say the dates have had a profound effect. Kid was an only child for 4.5 years and although she is a great older sis she went from all the attention to 1/3rd of it overnight. And she was definitely taking it out on Mr F at night (he does her bedtime). Once we started the dates she went back to her old self again.

I had always envisioned (pre-kids) that we'd do something when they were both older that involved a switching off date night. One week I stay home with Baby & Mr F goes out with Kid then switch the next week etc. Everyone gets a little one on one with each parent. Although I think saving for the future is important so is living in the present. :)

Mrs. Furious said...

Heather,
I will tell you that once we had kids we made it clear that we would not travel for xmas. Period. We want our kids to enjoy the same Christmas traditions we had in their own freaking house! I think it is important to set that precedent early. Before the seizures I traveled a lot with Kid and was willing to do so w/o Mr F so we'd head East 3-4x a year. Now we can't drive (and with 2 kids I would rather shoot myself anyway!) so flying, car rentals, etc adds up and I think we are going to try and head out 1 time and do a full 10 days or so and drive from one house (PA) to the other (CT).

Deb said...

Can you order groceries online to be delivered? I've saved so much money by NOT going to the grocery store that it more than makes up for the $6 delivery fee. I have cut out all impulse purchases as a result of just not setting foot in a store. I do go to a separate butcher for meat, because I want to pick out my own meat, but it's rare that I buy impulse hamburger.

I admit I have to avoid Target altogether. Maybe there's a way to do that? Can you have prescription refills mailed to you from another pharmacy? I want to say that Walgreen's or one of the other big chains has a mail service.

You can do this!! There's nothing like seeing your savings account grow and grow.

Deb said...

Ooops... I am now committing to reading the comments before commenting. Sorry about the advice!!

Mrs. Furious said...

Deb,
that's okay :)
It seems like a natural forum for advice giving.

but to answer your questions:
nope...no grocery delivery here. Plus I'm neurotic about exactly what produce I get etc.

I enjoy shopping at Target and I'm not going to give it up. I don't go to malls or buy *real* clothes, I don't get hair cuts or manicures, we don't go on dates or go to movies... Target is my me thing and considering how much we make and what we buy there spending $4000 there in a year is not out of line.

Plus if I gave up grocery shopping and Target I'd never leave the house ;)

Mrs. Furious said...

There is more too our financial circumstance. I put up ONLY the info that I felt like putting up so as not to be too specific about our actual income/investments etc. We're doing fine people! I promise! We have investments(that lose money every freaking year due to the market). We have a financial advisor. We have Roth IRAs and 401Ks. We can afford Target & Kid's dates & Disney. I'm really talking about taking more ownership of our finances and spending more consciously than we have been in the last couple of years since having kids. It is only since having kids that we have started spending everything we earn. Yes we could spend less and save more. That is the plan.

Liz said...

Just wondering, do you do Disney every year?

Mrs. Furious said...

Liz,
Yes.
We started when Kid was 2.5 (free to us)
then took her back for her 3rd b'day (they are free until they are 3... so we fudged it a bit that trip)
then at 4
then as a surprise after her 1st surgery (really she didn't know until we were THERE) at 4.5 and then again at 5.

We love it and feel it is worth the expense for the enjoyment.

We plan to go annually until it isn't fun anymore.

Liz said...

I'm down with it! Maybe we'll take Charlie right before he turns 3.

Marie said...

Hey-we are all about the annual WDW trip! Dh is in LOVE with that place, and now the girls are too! Our first time with them was when Emily was 11mo old and I was 6months pregnant. Then again when Emily was 2 and Anna was 1. Then again this year when Emily was 3 and Anna was 2 and Abby was 8 months. And we are already planning on going again in Oct. 2009!!!

I love that mouse....

Mrs. Furious said...

I could do a whole post on Disney. Maybe I will.
#1 I don't find it to be crazy expensive. Mind you we don't exactly slum it when we go anywhere else either... when we're on vacation we are on vacation. But a full week for EVERYTHING staying at a deluxe resort, airfare, food, for 3 (Baby being free) and it is about 3K. Totally and completely worth it to me. And yes it can be done for less but that is how we do it... so that I don't freak out and want to divorce Mr F on the trip.
I love that you can be on a vacation and that every moment is so exciting and magical for your kids. Love it. I love that kids are welcome and expected every where so you never have that "shhh" moment at a restaurant, etc. It seems counterintuitive (and I NEVER thought I'd be a Disney person) but it is truly a relaxing trip for us because the kid stress element is removed.
We totally plan to go every year (also do the fall).
Seriously we practically spent that much going to CT for the weekend for crying out loud!
It helps that there are always cheap flights to Orlando from MI.

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