Well dear readers, week 2 of the Uber Frugal Month Challenge went off the rails a little bit. We had a busy week with sick kids and another family member was ill so I have not done the last 4 or 5 daily tasks from […]
Tag: frugal living
Usually this time of year I start looking over our finances for the year, project our income a year ahead and start setting some goals for the year. I don’t do New Year’s Resolutions because I am not great at following through with them but I am good at setting some goals for our finances for the next year and achieving a reasonable number of them. This year however everything is up in the air. I am attempting to go back to work in the next couple of months and I am not sure of what my final salary will be. Since I am a pretty precise planner and a little suspicious of counting on future income that may not exist I am hesitant to put numbers down for some of the goals I have in mind. My job search has been pretty wide and I have time so I am making sure that I find something I will love and is a good fit.
That being said, everyone should review their “numbers” at the end of the year and formulate a rough outline of where you want your finances to head in the next year.
I can’t emphasis this enough. One of the best things I did for our finances was to start looking ahead towards the end of the year (and beyond) and plan out roughly where our money would go for the year. Originally most of our goals were about paying down our debt but now that most of that has been paid off and we have moved into a bigger house needing constant work I focus on planning out our house/garden projects, how much we will put into savings and how we are going to pay off our remaining debt.
Last year when I sat down and looked things over our goals consisted of paying off our car (check), paying off our credit cards (check, sort of), and putting a bunch of money into savings (not so great). We also planned on several smaller house projects and the gigantic one of putting up a fence so that dogs and kids could roam free.
Our gigantic fence project was completely derailed by the cutting down of more trees that were extra expensive and by the water pipe that burst in our front yard in the early fall. We did however redo our pantry, replace our entire chimney cap, update the main bathroom, paint some walls/windowsills that badly needed it, replace light fixtures for ones that use less energy, buy a fridge for the garage, purchase garden supplies to grow our own food and paint our son’s closet. Whew. It looks like a lot when I write that all out! Most of our projects were very small and done on the cheap over a weekend or two. We had two of the 5 trees taken down that needed to be removed for safety. We chose the two worst ones and I am really glad we took care of it. One of them was very close to falling and would have hit our house directly in the center causing a large amount of damage. The three remaining trees are so close together that they have to be taken out all at once since their branches are intertwined.
Our expenses for next year will change dramatically when I get a job and with school costs for all three kids (independent of the job). I am still not quite sure what the final numbers will be. Needless to say, I am a little more hesitant to set firm goals this year with so many changes looming.
I am a firm believer in setting some goals you know you can achieve by following your plan, some goals that are just enough out of reach that you have to consciously work at them and some goals that are a challenge and require regular sacrifice and ingenuity to achieve.
For next year our tentative goals are:
1. Pay off the remaining balance on our student loan.
This goal is one of our easy ones, as long as we stick to the plan! I set up our payments at the beginning of 2017 so that our student loan will be paid off by December of 2018 so as long as we continue our automatic payments we should achieve this one! My stretch goal is to pay off our student loan by the end of April with our tax return but it isn’t set in stone yet.
2. Pay off our credit cards.
We met our goal of paying off our credit cards and keeping them paid every month for most of 2017 but we ended up choosing to put the water pipe on our credit card since it came up unexpectedly and we had already used our yearly home improvement funds for other projects. Yes, we could have used our emergency fund for it but with so many uncertainties coming up at the start of the year we decided to take on the debt. We should meet this goal for sure by mid-year or sooner if we apply ourselves and put all of my excess salary towards it.
3. Bulk up our emergency fund.
Sadly our emergency fund is a little lighter than we would like at the end 2017. We had a lot of large expenses and focused on paying down debt versus saving so we did not put as much in there as I would have liked. Our goal is to save up at least one more month’s worth of money in our general emergency fund next year. Ideally we would save up two months worth but with everything else that would be our stretch goal for sure!
4. Invest as much as possible!
Yes, this is a very vague goal! There are so many what ifs that I have no idea how much we will be able to put into our newly opened Vanguard account. I have it set up to put a small amount in there every month but I am hoping for more!
5. Continue to work on the house.
Yay, another vague goal! We do have plans to cut down the remaining three trees that need cutting in the back and building some sort of woodshed for all of the wood we will be cutting. We also need to replace our hot water heater, fix the master bathroom faucet (already have most of the parts), and add/replace fans to the bathrooms and laundry room. Everything else will have to depend on if we have enough in the budget for it and time to get it done. We need to finish painting window trim (should already have the paint), do touch up paint on a couple of random areas, paint our daughter’s closet, and continue to replace outlets as we have time. All of those projects are small and can be done as needed. There is also the possibility of repainting the living room but that will be very time consuming and expensive and it might take us at least one more year to get around to it. The trees, fans and hot water heater are our priority for next year for sure!
I have way more ideas and what if goals in my head but for now these five goals will have to do! I am excited for next year. We met a lot of our goals last year and have been working hard at reducing our spending, being mindful of what we buy and trying reduce our food waste. I will be growing another garden in 2018 and my mother-in-law gave me a bunch of seeds for Christmas so I won’t have to buy many this year.
What are your goals for next year?
When my oldest daughter turned one many years ago she was inundated with so many gifts they filled a small kiddie pool. She was the first grand kid on my side and her dad has a large family plus being the first child of our […]
I was given the opportunity this week to check out a new retirement planning tool by AceYourRetirement.org and although I was not paid for this article it does contain promotional material. I would never post about something I have not tried myself and I always […]
Hello and welcome to the third installment of our A New Beginning in Budgeting Series! Our first installment was “A New Beginning in Budgeting Part 1: Using Quicken to Build a Buffer” and our second was “A New Beginning in Budgeting Part 2: Adjusting our Grocery Spending“.
For part three of our budgeting series I wanted to talk about our clothing habits. This is a topic I have been thinking about quite a bit over the last year. We have been trying to reduce our monthly spending outflow and our ecological footprint and as I was looking at our numbers I realized we spend a lot of money on clothes. It got me thinking. Back in the day people did not have a lot of outfits to choose from and clothes were bought based on durability. Now it seems as if my kids have enough clothes to last a long time without having to do laundry and a lot of the time the clothes will break before my kids outgrow them. You know it is a problem when you finally get around to doing laundry and their clothes physically do not fit in their dresser drawers.
When we started having more kids we started receiving many more clothes for them then we will ever need. One relative in particular is known for hitting up sales at Babies R Us and bringing over gigantic bags full of clothes in either the wrong size or season after being told the kids do not need anything at all and to contribute to their college savings instead. This same relative is pretty offended if I return said clothing and put the money into college savings myself and loves to see the clothes on the children when they randomly come over. It is maddening to say the least. I have been getting more forceful in my insistence that the kids do not need clothes, especially random outfits that may or may not fit and the clothes buying has been greatly reduced but I think that has more to do with the break in holidays over the summer rather than a conscious effort. Birthday/Christmas season is upon us so we will see how well my efforts have worked.
One day last fall I reached an epiphany. I was sorting items for the upcoming consignment sale and I was looking at all of the clothes people had bought when our younger daughter was born. I had a whole gigantic box of just summer stuff from her first and second summer, most of it barely worn. None of my friends had wanted any of it because they apparently suffer from the same overabundance of clothing as I do and most of it was too girly to pass on to my son. I asked myself why did we have so many clothes in the first place? Why are the kids not re-wearing clothes more often? Why are we buying new clothing instead of used? Why are we buying clothing in the first place when everyone has an abundance and can easily pass between families?
So I decided to take the plunge and join our local Buy Nothing group. Let me tell you, it was eye opening. Everyone in the group was sharing household items, especially kids clothes! Aha! Now I had a way to pass on clothes and receive some as well. I started commenting on threads for clothes in my kids size ranges and was able to score some great items including all of my son’s fleece pjs for last year (that still fit him so far this fall) and most of my daughter’s summer clothes.
So far getting our clothes from Buy Nothing has saved us hundreds of dollars. We can’t get everything from there but I search the local thrift stores and consignment sales to find what I can’t get at buy nothing and if I still can’t find what I need I will go to a regular store during a huge sale (Labor Day etc). The key is to be looking a size ahead and having enough room to store items for a little bit. I have a re-purposed laundry basket in my daughter’s room and a large tote for my son full of clothes in the next couple of sizes up. When my kids grow into the size I have stored I sort through them, have my kids try items on (just like if I was buying them at the store) and re-gift items that don’t work out. Some of my kids’ favorite clothing items have come from our Buy Nothing group.
We have had less luck finding adult clothes through our Buy Nothing group but that doesn’t mean that your particular group won’t have a good variety of clothes being passed around! I found some great Eddie Baur shirts through my group and gave away my maternity clothes as well so the possibility is out there. Our group in particular seems to be mostly kid clothes. Thrift stores can have some great finds as well as shopping the end of season sales for higher end retailers. My husband and I tend to wear our clothes for a really long time so buying quality items is key to making them last. We love shopping the Nordstrom Rack sales and have found some super stellar bargains on shirts, pants and sweaters.
Overall being much more conscious of what we actually need clothing wise and getting as much used as possible has drastically cut down on our clothing spending. I am also trying to get the kids to wear their clothes multiple times if they are not dirty with mixed success. My husband and I are pretty good at this but the kids throw stuff in the laundry basket at the drop of a hat! So far we have been able to get them to wear their pajamas 2 or 3 times in a row and sometimes we can get them to wear a shirt the next day if they only wore it for a little bit but it is still a work in progress. We have always reused our towels for a few washes but that is something you can try out in your house to reduce your laundry as well. Luckily our house has the heating vents right under the towel racks in the bathrooms so our towels are nice and dry after a few hours of the furnace being on but in the past I would place them on top of the dryer while it was running to get them to dry quicker during our PNW wet winters. I am also experimenting with hanging our clothes to dry in the laundry room but our house has high humidity so things are not drying as quickly as they should be to prevent mildew on our clothes. I am hoping that with the cooler temperatures and our furnace being on more it will heat up our laundry room pretty well and we will be able to dry at least our lighter weight shirts and pants this winter on the clothesline. So far we have cut out at least two loads of laundry a week which is a total win in my book! We are still doing a lot of laundry but I am not forced to do laundry every day like before and can just focus on it a couple of days out of the week. Yay!
How are you looking at your clothing choices to reduce spending and waste?
One of the easiest, cheapest and healthiest snacks I make my kids is dried banana chips. My son absolutely loves them! We buy a couple of bunches of bananas at Costco for $1.39, slice them up and put them into the dehydrator and at the […]
A little while ago I wrote about how we have been working on our budget and how I use Quicken to track our finances. I love the Savings Goals category and it has helped us tremendously the last few months to keep track of how […]
To say we’ve had a lot of change over the past two years is an understatement. We bought a house, added a child, added a new driver, got a puppy, discovered our older dachshund has some chronic health issues (lots of vet bills), have one child starting college this fall and two starting different preschools and to top it off my husband just started a new job with a completely different type of pay schedule. Needless to say our budget has undergone so many changes over the past couple of years I am having a hard time reaching a new normal. As soon as I get everything calculated and rearranged something new pops up and I have to do it all over again and it is getting a more than a little frustrating. I am determined this time, with the new pay schedule to figure things out once and for all (or at least until another major change ha ha!). My goal is to find a system that works for us and has lots of flexibility for those months when everything seems to happen at once.
I started doing my research on a new way of budgeting a few months ago. I looked at several websites, talked with my posse of like minded budget gurus, read some of my favorite budget books and a few new ones, and browsed Pinterest boards to see what was trending because just like diet fads, budgeting methods seem to follow trends too. What spoke to me the most was adopting a more frugal lifestyle and building up our “buffer” for those months that seem to have every expense on earth scheduled. I have used Quicken to track my expenses for over a decade and it has been the best resource I have tried. This year the “Savings Goals” tool has become my absolute favorite. It has really helped me stash away money for big expenses in my regular checking account without having to stash it in several different accounts for each category as many budgeting gurus suggest. Keeping track of multiple accounts can get challenging and simplifying budgeting makes it way easier to stay on track!
The way the savings goals work is you “move” the money into a separate account so it is not available in your checking/savings account. It is a great way to keep track of how much money you have available in your account for any given expense. In the past I would try to accomplish this in a spreadsheet but that got complicated with trying to remember which amounts I had moved around. For example lets say you have some money set aside for home improvements. Let’s say you have $2000.00 total and you have some minor home improvements you want to complete that will cost about $1000.00 but will take you a few months to complete. You would transfer the $2000.00 into the Home Improvement savings goal in Quicken so it would not show up in your checking account register but if you look at your balance at your bank online it will still be there. Let’s say the first weekend you tackle the pantry needing to be fixed (here’s our pantry story) but you only have time to buy paint and that costs $60. The next weekend you go out and buy shelves, bins and the accompanying hardware and that costs another $150. So your total for the pantry project is $210. You could either “move” the money from your Home Improvement savings goal to your checking account after each transaction or after the next time you balance your checkbook. There is no need to worry about being short in your checking account or remembering to transfer money from savings to cover it because the money is already there. Once you move the money your balance in your Home Improvement account would be $2000.00 – 210.00 for a total of $1790.00.
Let me tell you, it is amazing! I am a total budget to the penny kind of girl and I don’t like leaving unnecessary money in the checking account in case I forget which money that particular amount is to be used for (believe me with the craziness going on in our house it is bound to happen every once in a while) but now I have it separated out without having to transfer anything in my actual bank account. I don’t really have to think about it beyond I have about X amount saved for projects around the house. I have set up several different categories this way including a buffer, money for our twice yearly car insurance payments, home improvements and for vet bills. And the major bonus is that if something unexpected comes up like an emergency vet visit when you have exhausted your “vet bills” account you can avoid the worry of paying for the visit and shuffle money between the categories to cover it.
The best way to use this tool is to automatically transfer money into your categories at regular intervals. I put money in the buffer every pay check and the rest of the categories monthly after our second pay check of the month. This will make saving the money for your categories a habit and after a couple of months you won’t even notice that you are “missing” the money from your checking account. It is really important that if you use this method to focus on the balance in your checking account register in Quicken and not what your bank says you have otherwise you will be tempted to over spend.
The absolutely most important part of this method is that it eliminates the need for you to put anything on a credit card that you don’t immediately pay off.
Let me repeat that. If you have enough money in your checking account to cover both expected and unexpected expenses you will never need to put money on your credit cards that you are not able to pay off immediately. The best uses of credit cards are to rack up points/miles for a discount on services you already use, for an extended warranty, fraud protection (although some debit cards offer something like this) and to build up your cashback bonuses. Any interest you pay on credit cards will immediately void the value of any rewards you receive from the credit cards. 1% cashback is way less than paying 10% in interest and the credit card companies come out on top any time you are paying interest.
I have been really happy with our new budget so far! Automatically transferring the money has really saved a lot of the guesswork out of the budget and now it takes me about half the time to balance everything every couple of weeks or so. Stay tuned for my next installment where I cover some of the methods we have used to be more frugal around the house!
Happy budgeting everyone!