Smart consuming

Last week, our hair dryer died. It was a fairly inexpensive thing I’d bought 7 years ago, so I was fine with replacing it. I always thought it was kind of heavy, which made it annoying to use for the 10+ minutes it would take to dry my hair.

Instead of just stopping in at Target, I first went to Consumer Reports. My parents are long-time subscribers, and I can access the online database of reviews with the login my parents shared with us. I searched “hair dryer” and quickly came up with a listing of the top tested models. The first two were out of my price range ($70+) but the third item on the list was a Revlon model for $20! It was rated highly, and I clicked over to to confirm that they had it at my nearby store. They did, and it was in my hot little hands later that night.

I love the thing. It dries my hair in 5 minutes, and it’s got an ionic drying feature that makes for hair that is dry but not too fluffy/staticky. It’s like my hair air-dried, except better.

I recently subscribed to Consumer Reports newest magazine, ShopSmart. I’ve only received a couple issues so far, but I’m liking that it does comparisons of brand name vs. generic products, and highlights rip-offs. Part of living in a society that places such an emphasis on consuming makes it difficult to resist the urge to fill that Target cart with $100 of stuff every time I’m there. But I’m learning that checking into products before buying can often mean I get a better product for less money. That’s just smart.

Ode to overtime

Okay, it’s not really an ode, but one thing that makes budgeting challenging for us is that my husband was hired to work 30 hours per week but nearly always works more than that. Sometimes it’s 32 hours one week and 38 the next, but the only thing that’s guaranteed is that it won’t be consistent from one week (or pay period) to the next. And some weeks, he even gets overtime. I love that overtime pay!

This means that our budget looks kind of funny at the beginning of the month, like this*:

Her income: $2000
His income: $1000 (???)

A day before his paycheck is deposited, the total amount is updated on his employer’s system (Pay Entry — love it!) and then I go and update the budget, like this:

His income $1000 (1st paycheck: $556.34)

Then, after he’s been paid for the month, I adjust and put that money into the budget lines where we want it. Right now, any ‘extra’ money that we get that isn’t in the budget goes to one of two places: toward our debt, or into emergency savings or retirement. Because we aren’t counting on those dollars, it’s nice to adjust the budget up nearly every month.

Another story is estimating our taxes… will report on that come W-2 season.

*not our actual income

“The New Frugality”

I started reading Marketplace Money Editor Chris Farrell’s book “The New Frugality” this weekend. I know, I’m a barrel of laughs, aren’t I? In my defense, I also watched a bunch of “30 Rock” and “Castle” with my husband, so I’m not entirely focused on finances all the time.

The book delves into the idea that a new trend of being frugal will rise out of our recent Great Recession, and that frugality is helpful in a lot of ways–soft on our bank accounts, and soft on the environment. I get this. It’s one reason I want a small house. I don’t want to pay high heating bills in those cold Minnesota winters, but I also don’t need to heat a huge house for two people (and a dog!) and use fuel unnecessarily.

So far, I also like the little asides in the book that appear in bold. They offer a lot of common sense advice in an accessible tone. I’ll give a more in-depth review of the book once I’m done.

Getting on the same page… how?

One of the toughest and most rewarding aspects of marriage and finance is being on the same page, meaning having the same goals and agreeing on a plan to work toward them. This is not my area of expertise at all. I am very independent-minded and, even though I’m not an only child, have trouble sharing what I consider ‘my stuff.’ That all changes with marriage.

When we first got married, we kept our separate checking accounts. Neither of us had much money, and we’d just split bills or take turns with bills depending on who had more in their account. It was a roommate financial style that worked for us at that time. Later, as we obtained better-paying jobs and the ability to save money, it seemed a combined account might work better, so I added my husband to my main checking account. Later, he added me to his main account, and all of our savings accounts are shared.

Yes, merging accounts takes trust, and it also takes communication. One person can’t spend $1,000 on a new television while the other spends $500 on a new wardrobe when there’s only $2,000 in the account and bills need to be paid.

We’re still working on this aspect of our finances. Since we aren’t living paycheck-to-paycheck we have some flexibility with our checking account balance. However, in reading Dave Ramsey’s “More Than Enough,” I am learning that working even more closely on financial goals is important and will result in an even more blissfully happy marriage.

One obvious goal is tackling debt. Another is saving for a down payment on a home, and yet another is a comfortable retirement. But what about those goals that seem more like wishes than actual goals–things like endowing a scholarship or spending a summer in Japan? Someone who lives in our apartment really wants to own a convertible someday (not naming names to protect the innocent), and another person would love to open a cool cafĂ© & coffee shop in the local college neighborhood. How can we make those dreams a reality?

Planning, planning, and–you guessed it–more planning. It doesn’t sound fun but when you think of the end product, it can be the most fun around.

Need vs. want

This is one of those lessons we learn as small children: what a need is, and what a want is. We need food, clothing, shelter. We want pizza, video games, and a nice couch. Right now, I feel like I’m struggling with this, just like a child would who really, really wants that puppy in the window.

I really, really want that puppy in the window.

Back story: my sister lives in another state while she attends graduate school, and when I visited her last Thanksgiving, I got to meet her roommate’s pet dachshund. I loved him. I knew I wanted a dog at some point, but meeting that little guy just made my desire more real. I researched dachshund breeders in my state and found a few great options. Flash forward to the end of July this year, and my sister got a dog. What did she get? A dachshund. Oh, the jealousy.

Realistically, we cannot have a dog right now because we live in an apartment that doesn’t allow pets. Plus we always said that we wanted to live in a house before getting a dog. Thus, with our lease up for renewal soon, we’ve been looking around for other options. It seems as though nothing meets our requirements of 1) cheap, 2) allows dogs, 3) house/duplex, 4) garage/laundry. We’ve found places but they’ve either been far too sketchy for our taste, not in the area of town we like, or perfect but much too expensive.

I spent some time with my trusty financial spreadsheets and compared our current debt free plan with what it would cost us to move into a more expensive place. I didn’t like the numbers I saw. The dog is definitely a want, and while being debt free is also a want in some ways, I’ll be able to someday get a dog without worry that something will happen and a trip to the emergency vet is needed, setting me back $1,000 or more.

Net worth

As I’ve mentioned before, I really like the online budgeting tool for a variety of reasons. One of which is their ‘net worth’ calculation, which takes into account all savings/investments, checking account totals, and debt.

I’ve been watching our net worth slowly go from negative in the last year (quite a bit negative) toward positive. I think this month it will turn positive and, with good planning, never be negative again. Wahoo!

This doesn’t mean we’re out of debt, it just means that all of our assets will outweigh our debts. One thing that Mint cannot connect to is my pension at work, which grows very slowly but safely. Yes, I’m a 20-something with a pension plan. I did also manually add a few big-ticket assets to Mint, mainly our vehicles. If worse really came to worst, we could sell a car since we live within walking distance of our jobs.

I am hoping that our net worth reaches $1 million sooner rather than later, and not even really just hoping, but planning and then planning some more.