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Budgeting
Last week, I mentioned that I would talk about the dreaded B word this week. It was supposed to be yesterday's lesson, but life sort of got in the way this week, and I didn't get it written up, and posted, so I will touch on it briefly today, and next week write some more on the topic.
My husband dreads the whole discussion. The minute I mention anything even remotely related to our finances, his eyes glaze over, and he suddenly loses his hearing. That, coupled with my lack of restraint when it comes to a good sale, has gotten us into a lot of financial trouble over the years, lol.
The fact is, you can't be wealthy, if you can't control your finances. It's hard when you live paycheck to paycheck, and even harder once you realize all the ways your money leaks from you wallet. It's easy to get bogged down in what you don't have, and how broke you are, so that you don't look for ways to get out of that rut.
About a year and a half ago, I decided that we just couldn't do it anymore. I needed a plan. It finally dawned on me that I didn't just need a plan, I needed a three part plan. I had three issues to work with. I wanted to cut costs without giving up anything, I wanted to reduce my debt, and I wanted more income coming in. First, I needed to know what I had coming in and going out. That's where the cash flow statement and net worth statements from last week's lesson came in. Once I got that accomplished, I needed to cut unnecessary costs. One of my bigger unnecessary costs were late fees. I was paying a bundle in late fees for various bills and in overdraft charges because I never kept up with my checkbook and debit card charges, plus my husband also has a debit card that draws from the same joint account.
It's a lot to get a handle on all at once, so I divided everything into steps. First, I bought a dry erase calendar, and hung it on the wall in a place where I had to look at it several times a day. The one I bought has the calendar to the left, and a space for memos to the right, with a cork board along the bottom. I listed each bill and the amount in the memo section, and totaled them at the bottom, and then wrote them in on the day they were due at the bottom. I tacked the actual paper bill if I had one with the envelope to the cork board, and kept my stamps tacked there too. I wrote them all in red Dry erase marker, and put pay days in green. As I paid off a bill, it was marked through on the memo side, and erased from the calender. Keeping track of the bills eliminated all the over draft fees for all the things that come out of the checking account automatically that I would forget about.
Now, to tackle the rest of the overdraft fees, caused by forgetting to write down debit cart transactions, or forgotten checks, I began using my financial software. I started out by using Microsoft Money, but when my laptop got stolen last year, I switched to Ace Money Lite. It's free, upgrades are free, it does all the things Money does, and did I mention it's free? It doesn't have all the flashy graphics that money does, but it will do pie charts, graphs, automatic bill payments etc. The free version only allows you to use it for one account, but they have a paid version that will let you keep track of more than one. You can download your bank statements right into it, using money or quicken files. So daily, I download my statement into the program, and add in anything that hasn't gone through the bank yet.
To tackle the problem with my husband, I didn't really explain the system too much. I just told him, "hey, I'm getting our act together for us. This is what I need from you. " He has to tell me when he uses his card. He can't just use it and forget anymore. If the purchase is for more than $20, then he has to call and ask first if it's possible. I don't tell him he can't spend the money, but I will tell him if he needs to wait until I rearrange some things. He's not a shopper, he doesn't spend money on things we don't need or go out and buy stuff for no reason (I think that's my department, lol), but occasionally he will need something. He still couldn't tell me how much the bills are unless I tell him, and he has no clue as to when any of them are due, but atleast now he is aware that they need to be paid, and we need the money in the account to pay them.
All of this also made me more aware of what was going out for unnecessary spending, so that it is easier to cut those things out.
Next week, I will discuss ways to save money without really giving up anything you don't want to give up. Until then, search for budgeting ideas online, if you don't already have a plan, and if you do have a budgeting plan, tell us what works for you!
My husband dreads the whole discussion. The minute I mention anything even remotely related to our finances, his eyes glaze over, and he suddenly loses his hearing. That, coupled with my lack of restraint when it comes to a good sale, has gotten us into a lot of financial trouble over the years, lol.
The fact is, you can't be wealthy, if you can't control your finances. It's hard when you live paycheck to paycheck, and even harder once you realize all the ways your money leaks from you wallet. It's easy to get bogged down in what you don't have, and how broke you are, so that you don't look for ways to get out of that rut.
About a year and a half ago, I decided that we just couldn't do it anymore. I needed a plan. It finally dawned on me that I didn't just need a plan, I needed a three part plan. I had three issues to work with. I wanted to cut costs without giving up anything, I wanted to reduce my debt, and I wanted more income coming in. First, I needed to know what I had coming in and going out. That's where the cash flow statement and net worth statements from last week's lesson came in. Once I got that accomplished, I needed to cut unnecessary costs. One of my bigger unnecessary costs were late fees. I was paying a bundle in late fees for various bills and in overdraft charges because I never kept up with my checkbook and debit card charges, plus my husband also has a debit card that draws from the same joint account.
It's a lot to get a handle on all at once, so I divided everything into steps. First, I bought a dry erase calendar, and hung it on the wall in a place where I had to look at it several times a day. The one I bought has the calendar to the left, and a space for memos to the right, with a cork board along the bottom. I listed each bill and the amount in the memo section, and totaled them at the bottom, and then wrote them in on the day they were due at the bottom. I tacked the actual paper bill if I had one with the envelope to the cork board, and kept my stamps tacked there too. I wrote them all in red Dry erase marker, and put pay days in green. As I paid off a bill, it was marked through on the memo side, and erased from the calender. Keeping track of the bills eliminated all the over draft fees for all the things that come out of the checking account automatically that I would forget about.
Now, to tackle the rest of the overdraft fees, caused by forgetting to write down debit cart transactions, or forgotten checks, I began using my financial software. I started out by using Microsoft Money, but when my laptop got stolen last year, I switched to Ace Money Lite. It's free, upgrades are free, it does all the things Money does, and did I mention it's free? It doesn't have all the flashy graphics that money does, but it will do pie charts, graphs, automatic bill payments etc. The free version only allows you to use it for one account, but they have a paid version that will let you keep track of more than one. You can download your bank statements right into it, using money or quicken files. So daily, I download my statement into the program, and add in anything that hasn't gone through the bank yet.
To tackle the problem with my husband, I didn't really explain the system too much. I just told him, "hey, I'm getting our act together for us. This is what I need from you. " He has to tell me when he uses his card. He can't just use it and forget anymore. If the purchase is for more than $20, then he has to call and ask first if it's possible. I don't tell him he can't spend the money, but I will tell him if he needs to wait until I rearrange some things. He's not a shopper, he doesn't spend money on things we don't need or go out and buy stuff for no reason (I think that's my department, lol), but occasionally he will need something. He still couldn't tell me how much the bills are unless I tell him, and he has no clue as to when any of them are due, but atleast now he is aware that they need to be paid, and we need the money in the account to pay them.
All of this also made me more aware of what was going out for unnecessary spending, so that it is easier to cut those things out.
Next week, I will discuss ways to save money without really giving up anything you don't want to give up. Until then, search for budgeting ideas online, if you don't already have a plan, and if you do have a budgeting plan, tell us what works for you!
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Comment by Sonya Smith on October 4, 2008 at 10:01am - I'm sorry to hear that. I've recently had to rearrange our budget. I had just about dropped waiting tables entirely, was down to just a few nights a week, and then we ran in to some issues with my husband's truck, and two hurricanes back to back one of which I didn't get to work at all, but it cost our area so much business, people were scared to come down for labor day, our last busy weekend of the year. I started picking up an extra shift, because the money I was making the few nights I worked was cut in half. I've got a good bit coming in per month, and it's increasing all the time, but until it completely replaces what I was making, plus some, I'm stuck. And with two upcoming kid's birthdays, Christmas, and all the expenditures for school, soccer, etc. I can tell you, I get up in the morning feeling like a truck ran over me, lol.
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Comment by Kathy Adams on October 4, 2008 at 9:13am - I think your husband and my husband must be twins. I see that same glazed eye stare all the time - and I'm always hearing "you didn't tell me......." Selective memory. I'm in the process of doing the same thing as you - getting things in order. His last 2 paychecks were not very good. He was stranded in TX for almost a week, first waiting on a load, then his truck broke down. I told him "cheap meals" for a couple of weeks and OMG!!! He listened!!!!! I'm trying to do things besides my candle biz to get more money coming in. Working outside the home really isn't an option for me anymore. I had thought about even McDonalds but couldn't handle all the "on my feet time". It's going to be hard, but we'll make it.
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