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Archive for February, 2009

The Winter Savings Effect

February 19th, 2009 at 10:03 pm

Has anyone else noticed that it is MUCH easier to save in the winter than in the other seasons? I think it is because cocooning is so darn cheap. I know with my wife and kids, if they are out somewhere, they are spending money. So the only time I ever come close to catching up is January through April - unfortunately a very short season.

So what is the Ideal Budget?

February 17th, 2009 at 12:20 am

Does it look like this, the top Google hit?

http://7million7years.com/2008/08/29/ideal-budget-allocation/

In lieu of anything else, it looks pretty close to me. I'd like to post my actual numbers next to it for a critique from you people, hopefully I'll have that ready in a few days. What I do know is mine is far from that! Oh, housing is dead on, but debt service is a TAD higher. Arghh.

So the numbers in descending order are :
Housing 30%
Transportation 14%
Food 12%
Entertainment/Recreation 7%
Clothing 6%
Misc. 6%
Debt 5%
Savings 5%
Investments 5%
Insurance 5%
Medical/Dental 5%
Total 100%

Some difficulties with quicken online are slowing me down, but luckily I found the help forums, and a fix for the problem I am having is due in February. In the meantime I'll probably just resort to Excel.

Man, budgeting is a bear!

February 15th, 2009 at 05:02 pm

The good news is that Quickenonline FINALLY co-operated in accepting the CC data from my CU. I re-entered the login data and it finally started working, so now I have four months of CC data to work with. So it will pick up things like periodic charges for bridge tolls (it stinks having to commute over a toll bridge!) and anything else that goes on the CC and needs to be budgeted.

I guess it isn't telling me anything that I didn't already know, that our excess spending is manifested in a rising CC balance over the last six months or so. The trick I guess is annualizing things like auto maintenance and Christmas expenses.

And I have basically stopped using the CC, converting to cash for the occasional dining out so that I feel the pain, and it works! But my wife has not slowed down as much as I had thought. Arggghhh!!

Oh well, back at it.

Better to go Cold Turkey When Cutting Spending?

February 14th, 2009 at 07:56 pm

A quote that really stuck with me from the TV series that I just discovered called "Maxed Out" was a woman saying it was easier to just stop spending money than to try to just cut back. This was in reference to eating out. Makes sense, sort of like alcoholism, you have to stop, not just slow down!

But realistically, severely scaling back can be a great feeling. Then it feels just wonderful to splurge once in a great while on very small things. It seems more special when it is unusual. The habit of eating out all the time drives me bonkers - what a waste of money!

We've still got a long way to go, and it is very hard for me because it's indirect, in that I'm trying to control my family's spending, although I still take challenge in making my frugal ways even more frugal. What I've realized is that my accounting sucks. It's not a be all and end all to know where the money is flying away, but it is a necessary first step to getting control and setting a realistic budget. It gives me a common language to use with them, like "we did very well on eating out last month, so we can go out once this month, etc." If it all just gets sucked up into the big black hole of debt, it's much harder to visualize. I think that is what most of America has lost with Credit Cards, that necessity of give and take to balance things out. It's like a cultural collective madness - I'm sure most people just follow the crowd, most of who can't afford to go out all the time either. That's why I've always appreciated the viewpoint of depression era people - they know the deal.

Who here watches Maxed Out on Style Network?

February 13th, 2009 at 07:51 pm

And yes, I realize that sounds silly and hypocritical coming from someone who shouldn't even have cable. I've made many a tarry in that battle over many years and I've always been forced back. Just one more example of how my preferred monkish lifestyle is at odds with a family. I have to rationalize it (for now) by remembering that we spend VERY little else on entertainment.

ANYWAY, I've been sick lately and I ran across the Maxed Out series on Lifestyle network on daytime TV. I only saw the one yesterday about two 30ish single women who made the smart choice to share a condo, but they were each in deep debt due mainly to maintaining a single urban lifestyle, with WAY too much eating out. So besides slashing expenses, the counseler lady insisted that they sell or refinance their condo - they went for a refi. This was a little surprising since you usually hear not to do that, to pay off consumer debt with home equity. So I think I am in a similar situation. So far I THINK I can make the payments without doing that, but it is getting way too close for comfort.

So I will concentrate on analyzing expenses - both women were SHOCKED that they were grossly overspending. I'm not quite in that much denial, but there is some fog as to exactly how much we are overspending, so that is job two, right after stopping the bleeding from excess interest charges.

Anyway, it's a good show, and it just emphasizes to me what a constant battle it is to keep debt from encroaching if you don't make a serious and concerted effort to prevent that from happening. I think it is a little worse these days when costs are rising much faster than income, but it has always been a battle. I remember when I grew up, eating out was just not done, we just couldn't afford it. And now it is WAY too routine.