Budget Archives - Page 10 of 11 - The Happy Homeowner

What is Your Financial Routine?

Posted on September 15, 2011 by Jen

A self-professed “fly by the seat of my pants” kind of gal, I often shun routines in my everyday life. Except for two things: breakfast and finances. I love me some tasty oatmeal w/ blueberries and a cup of Sweet Dreams tea (yep, I drink “sleepy” tea to wake up in the morning–I’ve never had coffee in my life!!). But I love my Excel spreadsheets even more.

It’s obvious that a lot has been written on budgets, tracking spending, getting out of debt, etc. What I’ve personally found lacking is information on how people really do these things.

Of course you can do a quick Google search that will yield a plethora of ‘I got out of debt by doing X, Y, and Z” links, but how many of those links actually tell you what the person has done in detail? I know to cut my expenses, track my spending, bring in more income, etc, etc, etc.

But HOW do you do that?

My answer is to have a routine. Merriam Webster defines routine as “habitual or mechanical performance of an established procedure.” There aren’t many areas in life other than finances where I’d insist that performing an established procedure must be habitual. Simply stated, if you don’t consistently manage your money, are you really in control of it?

My routine is simple, yet has many steps:

Each month, I set monthly goals and a budget based on previous spending patterns, anticipated income, and life events (ie. do I have a wedding to attend or a vacation coming up?)
I track every penny I spend and these totals are entered into my Excel spreadsheet’s various tabs: a separate budget tab for each month and miscellaneous spending tabs for every two months so I get a better sense of spending trends over time
My miscellaneous spending is broken up into categories such as restaurants, groceries, gas, pet expenses, condo reno expenses, etc. and the sheet is auto-formatted to keep running totals and tell me how much I have left to spend (like what Mint.com does–I also love me some formulas and macros)
I keep all receipts and on Mondays and Fridays, I match them to my credit card statement to make sure I was charged correctly, then I enter the totals in my spreadsheets & throw away any receipts I don’t need to save for warranties, etc.
If I pay with cash, I write those expenditures down on a small notepad–if I take $40 out of my account, I don’t just record $40; I continue to track each individual expense so I still know how I’m spending my money
On the 25th of each month, I calculate my Net Worth, update my mortgage tabs (keeps track of balances, payment amounts and equity), update my savings tabs (EF, LT savings, Roth IRA, 403b), and update my student loan debt tab (it lists each loan balance, interest rate, and the date of each payment)

I’ll be the first one to admit that this may seem a bit overwhelming and tedious. But as a reformed spendaholic, I know myself well enough to know that I need to keep tabs (pun intended!) on myself in order to maintain the financial stability I’ve fought so hard to establish.

The best part of doing this for the past 5 years is that it’s automatic and now something I look forward to doing. My Monday/Friday updates take about 10 minutes and my 25th of the month showdowns a mere 25. To me, those 45 minutes each week are completely worth it.

An added advantage of my routine is that in establishing and keeping up with it, I’ve developed some pretty sweet financial habits. My routine has effectively set the stage for a healthy financial awareness as well as an increased desire to pay off debt, bring in extra income, enjoy my money, and save for my future. Not bad for 45 minutes a week, eh?

Do you have a financial routine? If so, what is it?

Learning to Say No, Slow Down, and Stop Buying

Posted on September 13, 2011 by Jen

Last week, my Balance Journey story was featured on Blonde & Balanced. As a segway back into my Confessions of PF Blogger series, I’m posting it in it’s entirety here because it’s a fantastic synopsis of my on-going journey to financial freedom. Enjoy!

Balance has not come easy for me. In fact, it is still something I consider to be a work in progress as my goals and interests are constantly evolving. Much like Amber, I have been on a personal improvement journey for many years, so I was instantly drawn to the opportunity to share some of my experiences.

I’ve been writing a series on my blog about my story of getting out of debt, and the process has allowed me to quickly surmise that I have achieved balance in three very large ways:

I’ve learned the power of “No”.
Material objects don’t determine my self-worth, credibility, or reputation.
I’ve made a concerted effort to Just… Slow… Down….

The Power of “No”

Saying ‘no’ had always been difficult for me:

You want me to do your share of this project? Sure! You want me to spend money I don’t have at a fancy restaurant? Of course! A fancy vacation when I have over $10K in accumulated credit card debt? Yes!

In a nutshell, I lived most of my early adult life as other people’s doormat. I never quite understood the power of the word ‘no’, nor did I realize that using it would not immediately cast me off to some deserted island, forever lost in my poor decision to actually tell someone ‘no’. I was a people-pleaser and I was proud of it.

Or so I thought.

It took years before I finally managed to squeak out a real ‘no’. Boy, did that experience change my life! Now I consistently, respectfully, and happily tell people ‘no’ when I cannot do something or do not agree with a suggestion. Guess what? It didn’t cause me to lose my job, fight with relatives, or lose any friends.

Material Objects Don’t Determine Self-Worth, Credibility, or Reputation

I once had over $14,000 in credit card debt. I charged my way into oblivion by buying clothes, vacations, concert tickets, and other frivolous items. If I had a bad day, I shopped. If I saw something I liked but couldn’t afford it, I charged it. I foolishly believed that if only I had that shirt or went on that vacation, people would like me more.

My epiphany came one day while on a shopping spree and charging yet another needless item. Why was I buying these things? I had NO IDEA! I didn’t need them, and, quite frankly, I didn’t really even want them. So I politely explained to the sales associate that I had changed my mind, left the store, and never looked back.

I paid off every penny of that debt in one year. I replaced the need to buy with the satisfaction of friendships and relationships built on mutual interests such as running and conversations that focused on goals and dreams. I felt alive for the first time in my life and I didn’t have to rely on my credit cards to provide that genuine happiness.

Just… Slow… Down…

At one point in my debt-payoff frenzy, I was working six jobs. Yes, six! I was the little (crazy) train that could—I could work all of these jobs, go to grad school, have a social life, run marathons, and so on.

Riiiiiiiight.

While I kept up a frenetic pace for about a year and a half, I finally had a breakthrough (breakdown?) when I realized I had scheduled myself to work 28 days straight, with finals week thrown in the mix.

Hello, Superman called and he wants his cape back!

I quickly realized that if I kept this pace of life, my life would, in fact, pass me by. I promptly re-assessed my goals, re-adjusted my timelines, and slowly began eliminating my random jobs and side gigs. A few years later, I purchased my first home and since have fallen in love with a more “domestic” lifestyle.

Now I make sure to tame my workload and I don’t take on anything that won’t enhance my life in more ways than one. I seek out entire days where I can simply just be and revel in the small joys in life. After all, if we’re not truly enjoying our life, are we really living?

So there you have it—my balance journey! If you should find yourself over-committed, debt-ridden, or down-trodden, just take a moment to breathe, re-adjust, and chart a new course. You are the owner of your balance journey, your happiness, your destiny. Life really is what you make of it and I’m in the camp of making it the best f’in life possible.

New Job = Big Changes?

Posted on May 24, 2011 by Jen

A few changes are on the horizon in my world, and most coincide with my current job search. While I’m still taking grad classes and working 2 part-time jobs on the side, I need to figure out a game plan for full-time work post-graduation.

As any good PF blogger would do, I’m targeting my search to enable a somewhat seamless transition between school and the new position (ahh, perfect world!).

With a few very promising interviews recently, I’m feeling more confident that I will indeed be able to sort out the details of a job change without any major impact on my finances. That said, until I have an official offer in my hands, I am changing gears in terms of my short-term financial goals.

As I mentioned in my post highlighting my side hustles, cash is King, baby! While I will still work on paying down my monstrous student loan totals and I will continue to work multiple jobs, I will have a heavy focus on stashing away as much $$ as possible in my E-fund. With the initial goal of $20K currently in reach, I don’t think I’m going to stop there until I have a new full-time job.

Additionally, I will continue with my plans to reduce my spending and stick to what I refer to as my adult allowance. These items will constitute my immediate short-term financial goals, and I look forward to providing consistent updates as this process unfolds!

Adult “Allowances:” How to Make One Work for You

Posted on March 31, 2011 by Jen

Ahh…an allowance. Most people can think back to a time when they were young and had to do chores, etc. to earn one.When I think back to my allowance days, I somewhat remember the drudgery of completing my chores, but I mostly remember the feeling of receiving my weekly allowance.Unknown to me at the time, this was my first foray into the world of personal finance: I did my chores, I earned the $$, and I alone decided how to spend or save said money (the latter changed from ice cream cones to clothes to savings accounts for cars, college tuition, and trips).

Each week, I’d happily accept each crisp $5 bill, and I’d quickly feed it to whatever piggy bank I had at the time. Fast-forward a good 20 years or so, and I’m still working with the same spend/save mentality, but I’d like to take steps towards changing my miscellaneous spending habits.

Enter the realm of the adult allowance.

While the $5 bills have been replaced with multiple paychecks and the spending/saving decisions now involve mortgage payments and Roth contributions, the same idea can still apply: I have a set amount of $$ and that’s all I can spend. What a novel idea! Here’s how I (and you) can effectively utilize the concept of an adult allowance to meet your financial goals:

Set your budget

Ugh, snore, sigh, etc.– despite your love or hate of them, setting your budget is the first step in any process of achieving financial security/freedom. What goes in usually comes/goes out, so it’s imperative to know WHERE and HOW it’s going. Include all fixed expenses that are paid out on a monthly basis.

Account for savings/investing

After you budget for your fixed expenses, the $$ left should be divided between savings and variable expenses. Remember to pay yourself first! Decide on your set savings totals and automate, automate, automate. It doesn’t matter if it’s $25 or $2,500–send some amount of $$ to another account (and leave it there).

Estimate variable expenses

There are many ways to do this: spending journals, various tracking methods, mint.com/financial software, etc. Make sure to include things like food, gas, entertainment, etc. Most importantly, be honest with yourself. If you’re a 5-a-week latte person, that must be included!

Decide how you’ll establish your “allowance” and what it will include

If yours will include going out to eat but not groceries, so be it. Choose your amount and give it to yourself–in CASH. There’s something about having that cold, hard cash in your wallet as a visual reminder that once it’s gone, it’s gone. Numerous studies have also confirmed that fact that we tend to make better spending decisions when buying with cash.

Stick to it!

To reiterate, once it’s gone, it’s gone.

Give yourself a cushion

The beauty of a budget is that it’s constantly changing & evolving. It may take some time and trial & error to figure out exactly what works for you. Be patient, be proactive, and be diligent: the hard work will pay off!

Some final tips to remember:

While we’re hard-wired to adapt to change as human beings, that doesn’t mean it’s easy to do. In fact, it can be hard as hell. Stick to your guns and roll with the punches. Eventually those little kinks/aggravations will work themselves out.
Remember that it will get easier!!!
Re-evaluate when necessary–don’t be afraid to change something that’s not working.
Look at the glass as half full. While it’s never fun to spend less, it’s always fun to see a savings account balance grow or to obtain/maintain financial security/freedom.
Celebrate the milestones no matter how small or large–revel in the fact that your hard work and good choices are paving the way for success.

The Happy Homeowner

Living a Healthy, Balanced Life One Cent at a Time…

Category Archives: Budget