Wednesday, January 28, 2015

January recap

I’ve been taking January off from some of my usual habits. I’ve said “no” to a lot of family/ friend get-togethers, put very little effort into promoting my etsy businesses, and have done zero craiglisting/ ebaying or other methods of selling off our outgrown kids stuff and other junk. In turn, I’ve made zero dollars from my side businesses/ selling stuff off. I was worried that without the extra bit of income we would be in a really tight place this month. However, I discovered that my time was more valuable spent in the home reducing how much we spend, particularly in the food department.

The biggest reduction in our food expenses came from a food prep day at the beginning of the month when I put together 16 slow-cooker freezer recipes from the 5-dollar dinner mom Costco Plan. It didn’t go as smoothly as I had envisioned, I’ll write another post about the experience, but it was awesome having half of the months dinners already assembled. Also, the recipes were each for 4 portions and since the boys are still small enough to share a portion, there was always a leftover serving for me to take to work.

I also started batch assembling breakfast sandwiches and freezing them so I could have easy breakfast on the go as I run out the door each morning. By doing the food prepping I essentially eliminated the need to get take-out this month which has always been a part of our budget that I knew was excessive.

Aside from freeing up my time to allow more for food prepping, I found that I was a lot less stressed out and in general made more thoughtful choices on where/ how much to spend. I had more time to think about where and when purchases needed to be made. I also found that with more time spent doing things that benefitted me, like sewing my own projects instead of things for other people, I felt less inclined to make splurge purchases with the “I deserve this” mentality.

Bottom line, I think I’m going to carry the attitude forward into February. I need to spend some serious thought exploring how much of my valuable time gets spent on my side businesses, this blog, and all the other things I heap on my to-do list. Hopefully another month of being a homebody and doing some inward focusing well offer some clarity on the rest of the stuff I try to tackle.

Monday, January 26, 2015

Tax return dilemma

I have been working on our taxes this week and am expecting a sizeable return mostly due to the major move expenses last year. I had been mentally reserving the tax return to pay for some upcoming medical expenses we are going to incur next month when one of our boys has a procedure. I know we can expect at least the $1000 deductible and possibly another $1000 in co-insurance. The bills will start coming in towards the end of March and we can reasonably put them off for another couple months before we have to either pay in full or set up a payment plan. So let’s say they are due at the beginning of June which gives plenty of time for all the tax returns to have been paid out.
June is also when the remainder of our credit card debt (currently $4,300) goes from 0% interest to 8.99% interest. I’m highly motivated to pay the credit card off this year and particularly motivated to pay off as much as possible before it starts accruing interest. Putting the tax return money towards could knock out a significant portion of the debt in addition to the minimum payments and whatever extra we can squeeze out of our budget each month.

So do we pay off medical expenses or do we pay down the credit card debt?

Pros for paying off medical expenses

No new debts. If we didn’t pay off the medical expenses we would be adding a new debt to the list which would be damaging to the mental game of crossing off the debts.

No increase in minimum payments each month. Our budget is really, really tight each month. An increase in the minimum amounts we owe on debt would be a hardship and would make it more difficult to come up with “extra” payments to continue to chip away at the remaining credit card debt.

Pros for paying down credit card debt

Paying off the credit card will be a huge accomplishment for me as I’ve been juggling credit card debt for my entire adult life. Using the returns to pay it down will help us get it done as fast as possible and give me a boost to keep at all the other debts.

Credit card debt is going to start accruing interest, the medical debt will not.

Medical expenses are not on the credit report while the credit card debt is a negative mark on the report. We’re not planning on taking out any additional loans at this point so this may be a neutral point but it’s still nice to have better credit in case the need arises.

Both options offer positives and negatives. I’ve got some time to decide, especially since I still have to complete the taxes before I can expect the returns to start coming in. I’m keeping my fingers crossed that the returns exceed my expectations and the medical bills are under what I am expecting, that way I could pay off the bills and still have some leftover for the credit card debt!

Friday, January 16, 2015

Stockpile gone wild

A couple days ago S came home from a run to the grocery store with a new bottle of lotion among the other food needs. Normally I try to keep my crazy a little better in check for him and the boys but for whatever reason that bottle of lotion threw me into a tizzy. Here’s the overriding issue: I loathe stockpiling. There are so many reasons I am against stockpiling. The biggest is that in my adult life I have moved, on average, a smidge over once a year. Some of the moves have been across town but several have been cross country. Especially on the bigger moves, having to pack and then having to possibly upsize the truck to hold stuff that we were just stockpiling annoys me. Inevitably, I end up giving away a bunch of stuff that I should never have purchased in the first place. Money wasted.

Another reason I don’t like stockpiling is that I really don’t like clutter nor do I want to pay for extra square footage just so I can have my own personal storeroom. Having to mentally keep track of what I have and how much and where it’s stored is just a layer of mental clutter that I also don’t want. Lastly, I don’t like spending money on something that’s just going to sit around. I’d prefer to have my limited amounts of money go towards paying off debt and reducing the amount I throw away on interest every month.

With that said there are a couple caveats. Things that we go through super-fast like diapers or toilet paper I don’t mind having a little extra stashed at the house. Especially if I find a fantastic bargain on diapers, having a stockpile is ok. For everything else, I feel we can wait until we are getting pretty low before I start looking for good deals to get a back-up to stick in the closet.

So back to the lotion. We have many, many, MANY other bottles of lotion lying around that he could have used up before we needed a new bottle. We have little tiny bottles we snag from hotels as well as some that were from my maternity room when I was on hospital bed rest. We have several fancy lotions that I received during pregnancy, post-partum, and for other random gifts. We have at least three, half used bottles of baby specific lotions. We have hand-creams, face creams with sunscreen, face cream without sunscreen, face cream specifically marketed for men, balms, and healing ointment tins and the list goes on and on. The thing is: our rate of lotion acquisition far exceeds our lotion use! And I can’t throw perfectly good things away.  

After going through all the lotion we had (to prove to S why we didn’t need another bottle) I started collecting all the other toiletries that have been accumulating. More gifts of fancy soaps and shaving creams. Body wash (I accidentally did a BOGO when we already had an extra, oops), various shampoo and conditioner including hotel bottles, and a whole array of little toothpastes and flosses from the dentist samples. All of this I arranged on our vanity and made S come and look (he humored me by looking astounded at how much stuff we had accumulated, or maybe he was just astounded at my level of craziness). I declared that we wouldn’t need to buy another toiletry item for at least a year.

I made the declaration in the midst of my mania but now I really am wondering if we could get by a whole year without buying another toiletry. So here it is, mid-January, and we’ve purchased one bottle of (unneeded) lotion. Let’s see just how long our current stockpile will last us!

Monday, January 12, 2015

2015 Planning: Income Goals

I received a great raise at the end of 2014 which came into effect for my January 1st paycheck. However, I had to adjust my federal withholding for 2015 which led to an increase in taxes taken out. Also, the company has added disability insurance in the benefits package which I elected to enroll in so that reduces my take home pay as well. I end up with a net loss of $13 a paycheck or $26 a month which makes me so grateful for the raise because I was expecting a $200 a month loss.

Looking back on last year I feel like I spent a LOT of time trying to hustle extra money through my side etsy businesses, yard sales, consignment sales, craigslist sales, etc. Sure, all the extra work brought in a little extra money but I know that it led to some increased spending too. Being super busy all the time led to a lot more prepackaged food/ eating out, buying needed items at a higher price either because I didn’t have time to research a better price or because I didn’t have time to go to multiple stores, and just general “too tired to fight my inner battle and say no to things I want but don’t need” purchases.

In retrospect, my time might have been more valuable had I spent it on diligently reducing how much we spend across the budget instead of bringing in more. I’m not saying I won’t do anything in 2015 to bring in a little extra, especially when it comes to getting rid of unused kids stuff. I am saying that I need to place a higher priority on reducing expenditures particularly in the food categories.

Income Goals:

Spend more time stretching existing dollars and less time making extra dollars. I’ll write more when I look at budgeting goals.

Compress selling into two months, ie one month in spring and one month in fall do all craigslisting, ebaying, yard selling, consigning, etc instead of dragging it out all year which got really tiring.

Be a better employee. I feel extremely fortunate to have landed in such a great company. There are several areas that I’d like to focus on for my own professional growth but it will also translate into being more valuable to the company and perhaps more bonus/ raises in the future.

Friday, January 9, 2015

2015 Planning: Budget Goals

Last year was a major transition for us, going from two incomes to one and putting money towards starting a new business. There was a lot of scrambling to adjust and to make ends meet each month. There was a lot of money shuffling and juggling to get bills paid and deal with some of the unforeseen events. Add in all the extra hours spent at my “real” job, my side jobs, and hustling money and it led to a lot less tracking of actual expenses than I would have liked and a whole lot more spending than we should have done.

For 2015, I intend to do a better job of tracking exactly where all the dollars are going. Hopefully, I can uncover some ways to reduce expenditures by taking a closer look at how and on what we are spending our hard earned money on. I would have thought by three years into the budget/ debt reduction mission things would have been set, instead I have learned over the years that there is a constant need to track, assess, reallocate, and reduce as possible.

Budget Goals:

Track actual expenditures across our budget categories for each month and make adjustments/ goals for each coming month.

Do a thorough review off all budget line items for reductions. Focus on bulk meal planning, reducing grocery costs, eliminating food wastes (it drives me crazy having to toss things that have gone bad sitting in our fridge), and cutting back eating out.

Cut spending on wants. Slowly but surely some of my old habits of giving into my wants has crept back into my lifestyle. Time to buckle down and keep my eye on the debt elimination prize.

Tuesday, January 6, 2015

2015 Planning: Savings Goals

We were able to get our emergency savings back up to $1000. We also started using a “partitioned” savings account to set money aside for the bigger one-time items that occur. The online account has a reserved list that allow us to set up a reserve item such as “tires” and then fund that item which partitions the money out of the general pot. In the past I was allocating funds in our savings towards various items in an excel spreadsheet but so far the online version has been a lot better, somehow I feel more accountable to the reserve list plus it’s a lot easier to manage.

We’ve also started funding certain monthly expenses in advance to reduce the fees associated with them or to take advantage of great bargains as they are available (like diapers).  For instance, our car insurance has a reduced monthly cost if six months are paid at a time. At first we had to pay each month because we couldn’t afford the full six month payment but slowly over the year we’ve been able to transition to paying the full six months at a time. Now we put the reduced monthly expense amount in the partitioned account each month so it is ready and waiting when the six month payment is due.

Savings Goals

Maintain 1k emergency fund

Increase use of portioned account to fund upcoming one-time expenses out of budget and with any extra money earned.

Re-asses savings quarterly. Don’t want too much money sitting in savings that should be going towards debt.

Saturday, January 3, 2015

2015 Planning: Debt Goals

2014 was not a great year for our mission to get out of debt.  I am resolved to get back on track and see some major debt reduction again. I’ve set my sights on CC #3. It’s not our smallest debt but the medical debt has no interest and is not on our credit reports so I don’t feel it’s the highest priority. It’s also not our highest interest debt, the consolidation loan currently has the highest interest. However, on CC#3 the promotional 0% interest rate will expire this summer and it will become the highest interest debt. The amount of $4,730 is small enough that it could be paid off in one year if we work really hard at it. It will be a challenge to get it paid off over the next twelve months and rests on some assumptions that we’ll have a relatively calm year in terms of emergency fund usage but I getting this paid off would be a major milestone for us.

Debt Goals

Pay off CC #3 balance of $4,730

Continue to pay minimums on all other debt for a total of $11,300 in debt reduction (including CC#3).