Week Vacation
This will be my last post until December! I’m heading out of town for a week to visit the bf’s family in the midwest for Thanksgiving. Tickets were already paid for 2 months ago, so don’t have to budget for that.
I will be bringing some minor hostess gifts (lovely Fran’s Chocolates, best chocolates in town!), and a bunch of munchies for the 29 hour train ride, and some bottles of wine for Thanksgiving (I’ve been told if I want to drink anything decent to bring it myself). I have my cache of library books. Don’t expect to spend much, but I’ll be taking $300 cash for discretionary spending and so that I don’t have to worry about not having access to my computerized budget and going over.
May you all be well and spend time with famiily and friends! See you in December!
Dinner: no grocery spending!
Came across a fun challenge on beingfrugal.net:
This coincides nicely with my dinner from yesterday! We’re going away for a week for the Thanksgiving holiday and I was thinking how we didn’t really have anything ready for food to make (no fresh meat in the fridge), and I got home late from work, and didn’t want to have to go drive to the store and start dinner 1 1/2 hours later. So I put together what I call “Everything but the Kitchen Sink Soup” – all the veggies in the fridge, plus a handful of split peas, a lot more of lentils, leftover pasta bits (angel hair broken up makes nice vermicelli), some opened canned tomatoes (they go in everything). Voila, soup that’s good for 5-6 meals.
The challenge from beingfrugal is a great concept: go through your cupboards and get rid of all the wierd packages of food items you don’t use regularly. The trick is to not go buy *more* specialty items to complete the meal. For example, we have a bunch of asian noodles. I didn’t buy them, but unless we go buy coconut milk and curries and other items, I can’t think what to do with them!
So don’t give in and get take-out or go eat out when there’s “nothing in the fridge.” Be imaginative and whip up something you already have!
Research & Budget Update
I’ve been reading up on lots of PF blogs lately – as I find good ones, I’ll add them to my blogroll. I know my current debts, I’m paying close attention to my statements, I’m making sure I don’t run out of money in my checking account and then have to resort to my credit cards or have transfer or overdraft fees. I’ve prepared a beginning budget. I’ve applied for a 0% interest rate card and gotten a 5K limit approval.
I’ve decided since starting this blog (all of 8 days ago) that I should have an emergency fund after all instead of expecting to use my credit cards for unexpected large expenses. I went and got a copy of my credit report to look at – it looks pretty good, nothing unexpected. I didn’t actually pay for my credit score; I don’t really care at the moment and I’ve been told that “it’s quite good.” I know I have a lot of debt, but I’ve always paid what I owe and I’m not usually late on payments. I don’t expect to purchase anything large for several years, so I don’t need to repair anything, just pay off those darn debts!
I’ve made an estimated stab at my debt-free goal of 6 years, but it’s not all that scientific; I’ll adjust it as I continue the journey. I have begun to live much more frugally, and I’ve updated a bunch of widgets on the side of my blog (showing the charts of percentage paid on my various debts). The visuals were fun and I think will be really useful to chart my progress (I know it’s the first thing I look for on other blogs!).
Now I’m anxious to start paying them off! I have had a few setbacks this month. I have been horribly sick and missed 4 days of work. That caused me to lose a lot of hours (I usually have 1-3 hours of overtime every day). It’s also a really short month on both paychecks – 10 days in each (payperiods are on the 15th and end of month). I expect I’ll be $3-400 short from previous months. Next payperiod is also short (10 days) and I’ll be on vacation for the entire weekof thanksgiving, that looses me about 7 hours of overtime, so next month’s first paycheck will also be significantly less than what I’ve come to expect as “normal.” Previously this would have been a disaster on my finances, but I’ll make do and be ok, just be paying less on debt.
Still, I’m looking forward to paying my first payments on my personal loan and paying off my credit card completely! I’ve also learned that my budget will need some tweaking! I think I’ve allotted too much money to food, entertainment, and restaurants. I also realize that I’ll have fluctuating amounts of spending in photography, but I’ll save that category for another post. I’ve also decided that the next budget update (to be done at the end of every month) will have to be in a table-based format.
Here’s to all my co-PF bloggers out there, and thanks for the wonderful motivation and help!
What is budgeting?
To get out of debt you’ll need to be on a budget. That is clearly one of the main tenets of the debt dissolution religion, from what I’ve been reading on other personal finance blogs. But what exactly does that mean?
The very start of this whole process started with seeing a debt lawyer. Bankruptcy is what she was espousing. I didn’t really want to (I’m not one looking for the easy way out, nor was it an attractive proposition – I would have had to do Chapter 13 since due to my recent raise and mega-overtime, I’m now just over the maximum of the Chapter 7 income cap). I’ll save the details for another post sometime, but the deciding factor was my income, and the idea that I would be put on a set budget. For 5 full years. The paperwork to qualify for the debt required that I look closely at my spending habits. Over the next week that’s what I did, as I looked at whether or not I should do bankruptcy.
I looked at my bank statements and credit card purchases for the last 4 months and compiled them into the following categories. Over several months it became obvious that my restaurant spending was out of hand, and also what average and regular payments I needed to make. Here is what I’ve budgetted for:
Food ($400)
Restaurants ($100)
Gas ($110, which lets me do a roadtrip if I want to)
Bills ($1190, includes rent, garbage, electric, gas)
Credit Payments ($355 on personal and SBA loans)
Pets ($100)
Coffee ($25, down from $60, and I’m trying to be under)
Liquor ($35, down from $60)
Entertainment ($50, down from $70, but realistically I’m trying for $0)
Photo (I do fine art photography, $40 for film and processing and printing)
clothes ($50)
fees/subscriptions ($30 average per month – this will cover my web hosting plus other misc. expenses)
home ($30)
car ($125 – I estimated I’d need to spend about $1500/year on maintenance & tabs)
cash (which I couldn’t track, but had and spent – $0 now, I like tracking everything on statements, so no cash spending for me), Medical ($500/year is what I have in my flexible spending account, so I hope to have none out of pocket).
Total: $2640. My income is $3000-$3300/month. That leaves me $360 – $650 for debt payment beyond the minimum payments. If I go under budget on anything, I could include that extra in my payments, but I think I will put it in savings for big emergency spending that sometimes occur and for deberred payments like semi-annual car maintenace. I can pay both loans with bank transfers instantly, and transfer unused money into my savings account, so I don’t need to write checks or anything.
I don’t carry cash in an envelope for each category and then when it’s done, oh well. I just keep track in my head or on paper and spend intelligently. I buy food when I need it at the grocery store, but I try to be under whenever possible, and I always shop with at list now. I have an entertainment budget but haven’t been to a movie in like 6 months, and stopped buying books to read (my achilles heel) by borrowing them from the library (their online system is an amazing thing).
For me, a budget is an educated knowledge and application of my spending habits. It’s not being rigid, but living responsibily, within my means, and trying to do better. I hope it works; the coming months will see!
Oh, and I think when I do my end of month budget I’ll have everything in a table format for easier reading.
The State of the Economy & Credit Rates
I mentioned in a recent post that my personal line of credit went up 1.25% last month (Wells Fargo Bank). I could “opt out” by closing the account and paying it off immediately. I can’t do that, since I don’t have $14K+ on hand lying around.
My one and only credit card, Citibank, just sent me a notice that they are raising lots of fees: default rate, cash advances, and foreign transactions. I could opt out, but then they’ll cancel the card and I have to pay it off completely by the end of the year or the card’s expiration date, whichever is later. It’s a shame, I’ve had this card for more than a dozen years and this is how they reward me. I decided to opt out on principal. I probalby would have kept the card except for a deceitful charge on my most recent statement.
I have heard before that banks and credit cards charge you for things in the hopes that you won’t notice or read your statement. Since starting this whole debt repayment process, I’ve been vigilant about keeping up on my balances and statements. Last month I finally paid off my balance in full. I did have some large charges due to car expenses that I charged before I decided to stop using this credit card, but I figured, no big deal, I’ll just pay it off and I won’t have any interest charges. WRONG! They put a finance charge of $21+ on my balance of $550, and it was all new! When I called to complain, they said it was a “bank error.” Scammers, the lot of them. Yes, credit cards are evil, and after I got the fee raising notice I was done with this card. They suck.
Don’t you love it? 700 billion for a bailout of financial institutions, and then they turn around and raise rates across the board indiscriminately.
Why didn’t I start this journey sooner?????
Costco: only cheaper sometimes!
Do you shop at Costco or any other warehouse club? Some interesting reading:
I joined a few months ago after someone in my building kept touting their salmon burgers and a few other items. They have a location less than a half-mile from my apartment, so it would be easy to go to. I bit the bullet and joined, splitting the annual fee with J. I’ve gotten really familiar with what they offer, and what I like, and what I need, so I feel like I do it justice being a member.
I try and limit myself to my written shopping list. It’s now one of the 4 markets I go to regularly to pick up specific items. Here’s what I do buy:
- 1 lb clamshell mixed salad greens $3.99 (at least 1-2 dollars off anywhere else)
- 4 lb clamshells strawberries $6.99
- 2 lbs organic butter
- 10 lbs white sugar (see previous post on baking and cooking more)
- cheese: gruyere, p’tit basque ($8/lb cheaper than in a supermarket), parm-reggiano
- Pacific organic chicken stock ($9.99/6-pack)
- grey poupon mustard 2-packs (mmmm, mustard chicken over quinoa!)
- instant oatmeal (thought I’d try the 55 package for $12 – makes great breakfasts at work)
- 3 lb packages of salmon burgers ($11.99 or 12.99, a GREAT deal for wild salmon)
- 4 lb frozen small scallops – a great idea for salads, pasta, you name it. ($8-9)
- packages of raw nuts – great for baking, and way cheaper than bulk at the co-op
- gas – but only if I don’t find cheaper elsewhere!
However, be advised that just like the artical above says, it’s not guaranteed to be a good deal just because you are there (and again, beware of getting things you just can’t use or can’t fit!).
I’ve been burned at Costco at the very beginning, but I’ve learned my lesson, mostly. I do occasionally spring for something new, like the 2 lbs of battered Halibut. At $20, it’s still VERY expensive, but I like halibut over cod (even though it’s 50% higher in price) and it’s cheaper here than anywhere else in town. I don’t buy perishable things that I have doubts I won’t finish (like a whole tray of one kind of fruit).
Interesting reading. Remember to shop smart!
Credit Card Spending Habits
How do you spend your money? I decided last month when I began the debt repayment process to NOT use cash (since I would probably spend more, or potentially lose it), but my debit card exclusively (so that I can look up my spending and enter it into my budget). However, there are certain expenses that I will ONLY put on my credit cards.
This brings up internet spending. I refuse to use my debit card on the internet. There are less safeguards if the card number is stolen; a real credit card has a $50 cap on the liability you face if someone mis-uses your card and spends money that you do not. I don’t want to take that chance with my bank account. So there are a few expenses that I have every month that are credit based:
Netflix – my one and only remaining entertainment expense. At $15 (give or take), that’s a bargain. I couldn’t survive without it. I don’t have TV, I don’t rent videos, I don’t go to the movies.
Clearwire – the only interenet I could get. However, I recently completely my year contract and decided to give it up. That’s $35/month I’m no longer spending. But if I still had it, it would go on the credit card.
Internet hosting fees – I have 3 domains (not this free blog) that I maintain, and they are beyond the basic HTML. They charge me yearly $246, and again, since it’s “on file” I’ve given them this card. I get dinged once a year in July.
I think there are a few other yearly “on file” fees I pay that I use my citibank credit card for. I think as long as I don’t do my normal daily disposal income spending on the credit card I’ll be fine.
The only other time I would use it would be for emergencies when my bank account is empty (and right before I get my next paycheck). But if I do that, I have to promise myself to pay it back 100% on the next billing period. After thinking it through I’m thinking it more and more necessary to have an emergency savings fund for those big last minute purchases so that I don’t end up using the credit card… Yes, that’s what I’ll do! More on how much I’ll make it and how I’ll build it up later.
New Credit Card!
Well, I’ve gone and done it. Last night I went and applied for a second credit card! I’ve only had one for the last 10 years or so, and as of October, it doesn’t have any accrued balance. But as you’ll note from my debt listings, what I do have are 2 loans, one of which just got raised to 10% and that I’m going to transfer to my new 0% for 12 months Discover card. I only received at 5K limit – I have to call in today and speak with someone to see if they will raise the limit. There is a 3% interest transfer fee, but with no annual charge and no interest, it is definitely in my best interest to get it.
Once I find out my limit (in case I can talk them higher), and I receive the card and activate it within 1-2 weeks, I will transfer the full amount to my card from my personal line of credit (making sure to leave enough room for the transfer fee!). So I’ll transfer at least 5K which will leave 10K in the loan. I will then apply all extra money for debt repayment straight to my personal loan, which will be the highest rate debt that I have.
It’s strange to be excited to get a credit card!
Requesting better credit card rates
I’ve been reading a lot lately on Blogging away Debt (in my blogroll). I’ve been waiting to see a post about whether or not to go out of my way to get a 0% rate credit card to transfer some of my higher-rate debt onto. I’ve only got 1 card with a $500 balance on it (all new purchases; I had a bad car month and had to get major brake/rotor work done). My personal line of credit through my bank just went up to 10%. I think the economic crisis has made them up the loan amount. It went up 1.25% – and they mailed out a form to me, which means they did it across the board.
So I’ve been looking at the offers coming in and the Discover Card looks really good. I am going to call tonight after I get home from work and see if they will let me have one to transfer a bank loan, and if I can get a little or no transfer fee (I think they start at 3% fee). I doubt I’ll get the full amount of credit limit as my loan is just shy of $15K, but anything will help.
As a first step, I called my bank to see if I could negotiate a lower % rate on my personal loan and did an application and was denied (the reason to be mailed to me in 4 weeks). I did call my Citibank credit card to see if they would give me a low to no % interest rate for transfers, but they don’t have any offers out right now. However, they did review my account, and after I mentioned several times I would close the card and get a new one (very nicely), they dropped my 18.99% rate (which is from an old default rate when I was late on payments), back to 8.99%. Hey, can’t hurt! I don’t plan on having finance charges anymore, but it never hurts to ask!
Wish me luck getting a discover card tonight! I’ll post the results tomorrow.
Saving Money Costs More
One of the biggest ways I’m trying to trim the budget is by cooking more at home and eating out less. I have to say it’s been working, at least in the 1 month that I’ve starting budgeting. I think I’ve eaten out once a week, and usually for lunch on the weekend, which is usually pretty cheap. It generally costs $10-15 each time. I initially had budgeted $100 for restaurants and $400 for groceries per month and I think I’ve been more than meeting that (at least for the restaurant part).
So to cook more at home you have to buy more foodstuffs. This means lots of bulk foods, and cooking from recipes. I’m finding there are certain kitchen goods I’ve been doing without that I’m starting to really need! Measuring cups, a good 9″ square bake pan, and a good seasoned cast-iron skillet. Glassware to store extras in, freeze, and/or take to work. I did without previously but now that we’re cooking and baking at least every other night, it’s become a necessity. J even started canning, and he had to buy a bunch of mason jars and racks for boiling. I had to buy a bunch of mason jars for bulk goods. I bought the jars at the thrift store, but still have to go buy the new lids.
These are short-term purchases, so I’ll need to be spending some money in the home goods budget category – I think I’ll portion one of these per month until I’ve gotten them all.
DebtMaven 