2015 summary

In terms of finances, 2015 was a pretty great year. We were able to travel to the Netherlands in May. My husband was able to quit his job in late August in order to begin his graduate school internship. We paid the last tuition bill for graduate school in December, without loans of any kind. And we received word that my husband got a very helpful fellowship, which will see him through his last semester of graduate school and into the job market in 2016.

I’m already gathering tax documents for 2015, as well. I adjusted my withholding in late 2015 in order to have a bit more in my checks to see us through that last tuition payment; this worked out well, even if we owe some taxes in April, we’ll have our savings built back up by then.

One thing that’s totally up in the air at the moment is a future job for my husband. We are, obviously, hoping and praying that he finds something wonderful very quickly after graduation, but we have planned for a period of unemployment.

Some of our major savings efforts slowed in 2015, mainly due to paying tuition and living on one income, but we did manage to save a significant amount nonetheless, close to 30% of our income. That percentage will likely drop in 2016, as we will have one income for more of the year, but we have accounted for that in our planning.

We are both looking forward to a trip to Indianapolis later in the year, as part of the fellowship award. We are hoping that I can go on the trip and and find fun things to do while my husband has training during the day. Indianapolis isn’t exactly Amsterdam, but it is the current city of author/vlogbrother John Green, so we may run into him and become best friends.

Here’s to a happy and healthy 2016!


Weekly paychecks

My sister recently got a contract position in a school, which introduced both of us to a whole different kind of budgeting. Since she’s contracted, she won’t get paid on all of those lovely days off that the students have (3 days at Thanksgiving, 10 days at Christmas, etc.) nor will she be paid in the summer. So she asked for my help in figuring out how much she needs to save out of each check in order to have enough money during those breaks.

And then she told me she gets paid every week.

I used to get weekly paychecks when I worked retail, and it was pretty handy, since I could really only spend what I made in the last week. If I had a bigger surplus at the end of the month, I would transfer that to savings. It was easy, even though I wasn’t making much.

I sat down with my trusty Google Docs spreadsheets and figured out the breakdown. First, I had to figure out exactly how much she would make (net/take home) for the entire year. I used one of those handy paycheck calculators to get a close estimate, then rounded down to be safe. Then I took that and divided it by 9 months and then 12 months. The difference is what she needs to save in order to live comfortably the other 3 months she’s not working (she could get a summer contract position, but we’re assuming she won’t, but if she did, then the savings can go toward debt/a replacement vehicle). Then, I figured out her budget. She decided on five very simple categories which she mainly keeps track of mentally:

-rent (includes all utilities)
-debt (student loan payment)
-savings (for breaks/summer)
-mom (who pays for car insurance and cell phone family plan)
-everything else (food/gas/fun stuff)

So I figured out how much she can put toward each of those categories each week, which makes it really easy for her to know if she’s on track. As soon as the deposit hits her account, she can transfer some to savings, some to her student loan, and mentally set aside a bit for rent and mom, and the rest is her grocery, gas, clothes, and eating out budget for the week.

This was actually a pretty interesting exercise, and I hope that it gets her excited about having a real income again (she worked through college) and about paying off debt. She already wants to pay extra on her loans, since I’ve talked up Dave Ramsey so much, and she could save a bundle in interest even paying an extra $20/month toward her loans.

I was pretty proud when she graduated, but I think I’m almost more proud of her for wanting a budget and to pay off debt.

Ideal budget vs. reality

One reason people hate budgets and following them is that they create an ‘ideal budget’ instead of a reality budget. An ideal budget would be a fantasy budget, a budget where nobody ever overspends a category, and categories like ‘restaurants’ and ‘amusement’ are tiny compared to money spent on necessities.

This is not the kind of budget I have, which is why I think it’s more fun and easier to ‘follow’ my plan each month.

My budget follows the money, instead of me following the budget. This won’t work for everyone, but if you have wiggle room each month but don’t want to feel guilty about spending some money on frivolous things, I think this is the way to go. Tracking expenses for a few months helps you see where your money goes, and then you create a budget based on that.

For example, if I see that my husband and I spent $75 on gas last month, and $70 the month before, and $80 the month before that, then I can easily set our gas budget at $80 or $90 and know we aren’t likely to overspend that. I’ve noted similar patterns with our eating out and fun money categories, so I’ve made each month of the budget match our actual spending habits. Then I can see what will really and truly be ‘left over’ and can be used for the debt snowball, savings, etc.

It’s this type of budget that lets me know we can pay off our debt by our goal date or even earlier. This also lets us absorb a car repair or larger medical bill without too much fuss and bother. It’s also easy to see if one category is out of proportion with another, and make me stop an analyze spending habits and change them.

Emotion vs. head knowledge and monthly spending

One thing that I’ve started to do in order to psych myself out–emotion, not head knowledge–of thinking I have a lot of money to spend is to subtract all our regular recurring bills from the checkbook at the beginning of each month. This renders the account ‘balance’ pretty low on paper, so that when I go to buy groceries, stop at Target, or go out to eat, I’m aware that I really don’t have all that much to spend. I do not add paychecks before they come in–those get added as they are deposited–because that’s not the point of this exercise.

I think this could work for others even if it resulted in a negative balance at the beginning of the month, because then you’d be aware of the hole that you’re in and need to climb out of. Seeing -$800 or whatever would be tough, and that would be a good strong reminder.

I’ll admit it kind of wreaks havoc with knowing the actual balance of your checking account if you don’t regularly check your account online, but I’ve found that the benefits far outweigh the inaccuracy. And, it will be accurate as the month goes on and the bills are paid. Another benefit is knowing how much you can shuffle to savings or debt, and it could also prevent overdrafts when bills come due.

Even if you’re not good at budgeting, or don’t want to budget (i.e. put a limit on categories of spending like groceries, entertainment, etc), at least knowing what bills come in regularly would be helpful.

Know of any other tricks to curb spending? Please comment!

Christmas in August

Since beginning this whole “spending plan” business, I’ve come to realize that there’s one thing that always breaks the plan, and that’s gifts. It happened back in May with Mother’s Day, and so I made up a plan for all the rest of the gift occasions for the rest of the year, and started in with shopping slowly and well in advance of the ‘gift needed date.’

This means I started Christmas shopping in June. I also pared back who exactly will receive a gift from us, because, quite frankly, while we can afford it now, with uncertain job outlooks, we might not be able to come January 2011. So, it’s pretty much immediate family and everyone else will get a lovely holiday card from us.

I actually highly recommend sitting down and making a list of all the major gift-giving holidays, who you give to, and then thinking about what to give that person. Having many months to plan means the gift can be both more meaningful AND more economical. I also have some random ‘just in case’ presents stashed if I forgot anything/anyone. Let me tell you, Anthropologie has some awesome stuff on their sale tables that any of my female friends would love/cherish, usually for under $20.

Happy Christmas… in August!


I am cursed with a love for the finer things in life. Don’t ask me why, but even as a child, when the Christmas catalogs started rolling in, I always managed to want the most expensive thing in the entire catalog. On every page of the catalog, too, for that matter.

I still love more expensive things, including, but not limited to, jewelry, electronics, craft beer, and the PRECOR AMT 100i machine at my gym. Okay, so the beer and the machine don’t cost a lot, but added up, it’s much like someone else’s costly daily Starbucks run. Also, buying my own 100i machine would run about $8K, which makes the $45/month gym fee seem like small potatoes. The cost of the machine is roughly 14 years of membership fees, so I’m calling it good.

[And I know that if I skipped the craft beer entirely, the whole gym thing would be less necessary, but that’s another issue that has nothing to do with finances.]

All of this to say that I’m going to try a new way of handling my desire for nice things. I opened a few more ING savings accounts (easy with ING!) and labeled them with my savings goals. So now I’ve got a gym membership fund, a travel fund, and a bling fund. I don’t think I’ll be able to add to the latter two accounts every month, but if I don’t spend my portion of fun money each month, I’ll put it into savings instead, and have my husband also add any of his leftover fun money to the travel account, too.

I’m also going to add the gym fee, which we paid up front last year, to our monthly budget and just save that amount each month to go toward the renewal come this fall. I also think seeing that dollar amount in the budget will goad me into going more often, since right now mentally it seems ‘free’ since all I do is show my card at the front desk and I’m in. Not so. I already manage to get there 2-3 times a week, but I’d like to make it more like 4-5, since it pays dividends in the form of stress busting and caloric burn… and I want awesome muscles, which doesn’t come easily or cheaply.

Budgeting (a.k.a. spending plan)

Living on a budget is probably one of the most boring sounding things in the universe. But it can actually be fun, and, ironically, rather freeing. Instead of fearing the bills coming in throughout the month, we can enjoy knowing that we have enough to cover the bills and have some money for fun things, too. Instead of calling it a “budget,” I like to call it a monthly spending plan (a la Dave Ramsey). Basically, this means allocating all your money toward a category before it’s even deposited into the bank, including money toward savings. Something like this:

This is just a sample [note: not my real income or budget]. I liked trying out Dave Ramsey’s Gazelle Budget Lite calculator to see approximately how much we should be spending in each category; I love a good financial calculator like this one. Amounts will vary based on income and general cost of living based on location, but it’s helpful to see when a number is either far lower than a recommended percentage, or far higher.

Also, categories will vary depending on the household. This spending plan is based on a 2-income family with no children or pets, and no car payments. Medical insurance and other costs are not factored in since all of those needs are covered with pre-tax dollars (like an HRA, HSA, or FSA) taken out of the paycheck before it’s even deposited. Retirement savings is also not included, since those are also taken pre-tax (401k, 457b, etc.). A larger than average amount is allocated for new clothing, based on two young professionals building a needed wardrobe. Using a spreadsheet to play around with numbers to see what’s comfortable works well; sharing a Google Doc with the plan makes it easy for either spouse to check and adjust.

One thing we’re trying is to use cash on those things that are not necessities: eating out, clothes, and entertainment. Once the cash is gone, the spending in that category is done for the month. Will report on how well this works for us!

First things first

My partner and I make an average amount of money. He works for a non-profit with troubled youth, and I work for a county (government, sort of) entity in an administrative position. I never thought we’d be rich doing these jobs, but we get to help a lot of people and ‘make a difference’–which means, to most people, sacrifice wealth for the good of others.

However, one of the things I learned (from Dave Ramsey, one of my heroes, as you’ll learn from my writings here) is that the best wealth building tool we have is our incomes. Dave Ramsey basically says to do what you love, do it well, and you’ll make money from it. You may not make the most money of your friends, but that’s not the point. The point is to be the best steward of your money that you can possibly be, and live well below your income. This is tough in our society, always wanting the new toy or the new outfit that will supposedly make us happier and better human beings. But we also know that’s not really true. My husband’s grandmother was a child of the depression, and my husband grew up knowing to save aluminum foil upon penalty of death. It is possible to make do with less than we’re told we should have.

In order to do this, you may have to become a bit obsessive. I use Mint.com for this purpose. It lets me see every account we have (bank accounts, IRAs, credit cards, student loans, etc.) on one screen. It’s so simple, it’s stupid. And it should be! Once I could see how much we were spending in certain categories, it made it easier to try something else. Who wants to spend 1/3 of their income on eating out? Not me! This month, I’m attempting the “cash only” envelope system for eating out, amusement, and clothes. When the money’s gone, it might hurt to say no to hanging out at the bar with friends, or maybe I’ll be able to leave $10 for the last weekend in May for that very reason.