Sunday, December 16, 2007

Our Annual Budget for 2008

Here is an overview of our anticipated Income and Expenses for 2008. So long as we save the excess from the high income months to cover the low income months, we should be fine as well as be able to pay almost another $10,000 additional toward debts (assuming no visits from Murphy!). :)

  • Total Income /Total Expenses
  • Jan $12,576/$6,877
  • Feb $6,576/$6,592
  • Mar $12,576/$7,051
  • Apr $6,576/$6,935
  • May $6,576/$6,582
  • Jun $6,576/$7,067
  • Jul $6,576/$5,729
  • Aug $6,576/$6,302
  • Sep $6,576/$6,763
  • Oct $6,576/$5,813
  • Nov $6,576/$7,142
  • Dec $6,576/$6,128
  • Total $88,912/$78,981

To view the complete detailed spreadsheet of our 2008 Annual Budget, click here. Comments and suggestions are welcome.

Thanks For Your Support

I want to thank everyone for their support this year. Without the support of the blogging community I'm sure we wouldn't have been able to achieve the progress we have this year.

Special thanks to:

Kris at Simply Us
Nine Circles at Nine Circles of Debt
No More Spending at Diary of a Reformed Spendaholic
JW at Need To Be Debt Free

Our Christmas Budget

We try to keep the budget down for Christmas, but we both have large families and grew up with a tradition of lots of gifts. We were also able to keep some of the gift amounts lower than usual (like our parents) because we have $250 in gift cards to put towards some of the gifts.

In my husband's family we buy for all the kids but do a "grab" and draw names for the adults, so we need 2 grab gifts, one for the name hubby draws and one for the name I draw. And the grab is for a $30 gift.

Here's how our Christmas budget looks:

Me - $20
Hubby - $20
Daughter #1 - $200
Daughter #2 - $200
Daughter #3 - $200

Mom - $20
Dad - $20
Sister #1 - $20
Sister #2 - $20
Sister #3 - $20
Brother in Law - $15
Sister's Boyfriend - $15
Niece #1 - $15
Niece #2 - $15
Nephew #1 - $15

Mom - $20
Brother #1 - $20
Grab #1 - $30
Grab #2 - $30
Nephew #1 - $15
Nephew #2 - $15
Nephew #3 - $15
Nephew #4 - $15
Nephew #5 - $15
Niece #1 - $15

#1 - $5
#2 - $5
#3 - $5
#4 - $5
#5 - $5
#6 - $5
#7 - $5

TOTAL: $1,000

Daily Progress Report

Couldn't work at the Church Nursery today because of a big snow storm. Hate to lose the money but it was nice not to have to go out in the chill.

Spent the day reading blogs, updating my blog, and listening to the Dave Ramsey show.

I feel inspired. :)

Updated Blog

Today I updated the side bar of the blog. All figures are now up to date. And I cleaned up my post labels to be more concise.

November 2007 Earnings

November 2007 Earnings:

Ad Revenue: $5.16
Associated Content: $2.31
Cash Crate: $2.34
Church Nursery: $81.00
Interest: $18.38

Total: $110.19

October 2007 Earnings

October 2007 Earnings:

Ad Revenue: $105.61
Associated Content: $4.19
Cash Crate: $11.38
Church Nursery: $84.00
Citi Bank Rewards: $150
Craig's List: $35.00
Jewelry: $10.00
Mystery Shopping: $10.00
Rebates: $7.00
Returns: $65.00
Interest: $20.01

Total: $502.26

Catching Flies With Honey

As I have mentioned, we recently got hit by our bank with 3 insufficient funds fees of $25 each, for a total of $75!!! Talk about stupid tax! All because we weren't paying attention.

So, my husband told me I should call the bank and see about getting these charges reversed. Well, I am a big chicken who avoids confrontation whenever possible. So, I asserted that he should be the one to call.

When it comes to our finances my husband and I each have our own individual strengths. I am good at shopping at discount stores, using coupons, getting price adjustments, and returning unwanted items. My husband finds most of these activities tedious and embarrassing. My husband is good at negotiating the best deals on purchases and services. I am horrible at these kinds of activities. In the end I convinced my husband that we were more likely to have a positive outcome if he made the call.

So, my husband made the call. And like the saying "you catch more flies with honey than vinegar", he was very nice and polite. He explained that we have been a customer of the bank for over 20 years and do not have a history of insufficient funds errors. He very nicely requested that the charges be reversed. Our hope was to get at least one of the charges taken away, but to our surprise the bank agreed to reverse all 3 charges! $75 put back into our account!

Now that was a phone call worth making!

Saturday, December 15, 2007

The Top 5 Reasons You Blow Your Budget

Well, we have not been doing that well with this months budget. It got me thinking about what it is that makes people, us included, overspend. So, I came up with this list of The Top 5 Reasons You Blow Your Budget:

5. Overly Aggressive (unrealistic) Budgeting
You are so determined to pay off all your debts as soon as possible that you set unrealistic expectations that are almost impossible to achieve. At the beginning of the month you are sure you can limit your grocery budget to $200 for the whole month, but once you are in the store you are unable to stick to the unrealistic figures you set for yourself.

The reason this one can be such a problem is that there is a fine line between being aggressive, which is good, and being unrealistic, which is not good. We hear Dave Ramsey tell us "beans and rice and rice and beans" and we get so excited that we cut our grocery budget to a small percentage of the usual figure. If a category was over inflated to begin with, you might be able to reach your goal. But if your usual amount was reasonable, you might be setting yourself up for failure.

The solution: is to set realistic budget goals. One way to do this is to try reducing the amount of a category by a small percentage each month. If you are successful in reducing a category by 10% one month, try going another 10% the next month. This will work much better than going for a 30% reduction immediately. You'll eventually find what is a realistic figure for each category of your budget.

4. Failure To Plan Ahead
Not planning ahead is a sure fire budget buster. You do the initial planning when you write out the actual budget, but many people stop planning after this. Big mistake! You need constant planning in order to successfully stick to a budget.

If you are out for a long day of doing errands with the kids and you haven't budgeted any money for lunch or snacks, you'll be tempted to go through the drive-thru and blow your budget if you don't plan ahead and pack some food from home to to bring with you.

The solution: is to spend some time every morning planning out your day. With a little forethought you'll find it much easier to stick to the budget.

3. Not Getting "Budget Buy In" From Your Spouse
If your spouse is not on board with your financial plan, it will be almost impossible to stick to your budget. Your left hand might be undoing all the good that your right hand is doing. Any purchases that have not been agreed upon in advance will ruin your budget.

The solution: is to have a budget meeting with your spouse. If he (or she) is reluctant, let him know that this is a very important issue to you. (If he is still reluctant, you have more than a budget problem, you have a marriage problem.) Before the meeting, prepare a simple hand written budget (no elaborate spreadsheets!) for him to review. Let him know that you want and need his input. Let him know that you will revise any category that he wants but that after the meeting all spending must be in accordance with the budget unless you both mutually agree to make a budget change.

2. Failure to Track Expenses
In order to have any chance at staying within your budget, you must track your expenses during the month. Not paying attention is a sure fire way to blow the budget. You may think you haven't spent much dining out this month and decide to go to a restaurant again, only to later find that you reached your dining out budget cap two weeks ago.

The solution: is to track all of your expenses. It doesn't matter if you do this in Quicken or on a little notebook that you carry in your pocket, but it is absolutely necessary to track your expenses during the month to ensure that you stay under the limits you set. Another good way to do this is to use the cash envelope system. Put cash in an envelope and label it with one of your budget categoris (like "dining out"). When there is no more cash in the envelope, you know that you have reached your limit for that category.

1. Failure To Delay Gratification
The number one reason that people blow their budget is that they give in to the desire for instant gratification. Becoming debt free or having a comfortable retirement are great goals, but they take time to achieve. We want what we want and we want it now. It is hard to wait. We work hard. We deserve to have fun now. These are the thoughts we have when we rationalize overspending. Delaying gratification is hard. Giving in to what we want now is easy.

The solution: is to remind yourself that you are a grown up! Instant gratification is a childlike behavior.

Try to avoid advertising whenever possible. Marketing executives work very hard to make you want their products! Try to shop with a list and stick to it!

Practice delayed gratification (sticking to your budget) and it will get easier! (At least that's what I keep telling myself!)

Goals For 2008

Jan - Return unwanted holiday gifts, Photograph jewelry for catalog/website
Feb - Update jewelry website
Mar - Write copy for jewelry newsletter, Photograph bracelets for ebay
Apr - Send Jewelry newsletter (Mother's Day, graduation), List mother's bracelets on ebay
May - Write copy for jewelry catalog
Jun - Print jewelry catalog
Jul - Photograph clothes for ebay
Aug - List kid's clothes on ebay, Research Craft fairs
Sep - List Halloween costumes on ebay, Sign up for Craft fairs
Oct - Write copy for jewelry newsletter, Photograph toys for ebay
Nov - Send Jewelry Holiday newsletter, List toys on ebay, Mail jewelry catalog, Attend Craft fairs
Dec - Attend Craft fairs

Our Annual Budget for 2008

Here is our Annual Budget for 2008. I tried to do a link to my Excel Spreadsheet but couldn't make it work, so it is very difficult to read here. (If anyone knows how to link to a spreadsheet, please let me know! :) )

A few notes about our budget:
The Jan commission should be around $8,000 instead of the $6,000, I just didn't update that yet.
The vacation category is higher than I would like but my sister just got engaged and is planning a destination wedding in the Caribbean in the summer of '08, so I need to start saving now.
Our gifts budget is based on the actual birthdays and events that we need to buy for each month (as well as a shower and wedding gift for my sister). Our average birthday/holiday gift price is $20.
The Parties budget is for my 3 daughter's birthdays and our annual Halloween party.
The Blow money category has been increased to give my husband $50 per week. This was necessary to keep my husband on board. (He feels cheap when he can't go to lunch with his coworkers.) My blow money will remain at $20 per week.
The Commission category is a rough estimate and will be tweaked as the months get closer.

2008 Budget

EXPENSES Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
CASH - Clothing
$0 $0 $0 $300 $0 $0 $100 $100 $100 $0 $150 $0
CASH - Gifts
$50 $160 $0 $50 $210 $160 $60 $260 $20 $125 $1,285 $45
CASH - Food
$400 $400 $500 $400 $400 $500 $400 $400 $500 $400 $400 $500
CASH - Parties
$0 $0 $0 $0 $0 $0 $0 $0 $100 $50 $0 $50
CASH - Pizza
$ $80 $100 $80 $80 $100 $80 $80 $100 $80 $100 $80 $80
CASH - School Fees
$5 $5 $5 $5 $5 $0 $0 $0 $5 $5 $5 $5
CASH - School Lunch
$36 $36 $36 $36 $36 $0 $0 $0 $36 $36 $36 $36
CASH - Blow
$280 $280 $350 $280 $280 $350 $280 $280 $350 $280 $280 $350
DEBT - Chase Visa
$900 $900 $900 $900 $900 $0 $0 $0 $0 $0 $0 $0
$200$200$200$200$200$1,100$1,100$1,100 $1,100 $1,100 $1,100 $1,100
HOME - Cbl/Ph
$181 $181 $181 $181 $181 $181 $181 $181 $181 $181 $181 $181
HOME - Elec
$220 $220 $187 $162 $160 $220 $220 $220 $190 $190 $190 $190
HOME - Maintenance
$25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25
HOME - Mortg
HOME - Oil
$350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350
HOME - Trash
$0 $0 $65 $0 $0 $65 $0 $0 $65 $0 $0 $65
AUTO - Gas
$400 $400 $500 $400 $400 $500 $400 $400 $500 $400 $400 $500
AUTO - Insurance
$138 $138 $138 $138 $138 $138 $0 $0 $238 $138 $138 $138
AUTO - Maintenance
$25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $75
PERSONAL - Contacts
$0 $99 $0 $0 $99 $0 $0 $99 $0 $0 $99 $0
PERSONAL - Life Ins.
$0 $0 $256 $0 $0 $0 $0 $0 $0 $0 $0 $0
PERSONAL - Newspap
$8 $8 $8 $8 $8 $8 $8 $8 $8 $8 $8 $8
$20 $0 $0 $20 $0 $0 $20 $0 $0 $20 $0 $0
PERSONAL - Rx Prilosec
$0 $10 $0 $0 $10 $0 $0 $10 $0 $0 $10 $0
$0 $0 $50 $0 $0 $50 $0 $0 $50 $0 $0 $50
PERSONAL - Vacation
$500 $500 $500 $500 $500 $500 $100 $100 $0 $0 $0 $0
KIDS - Basketball
$240 $0 $0 $220 $0 $0 $0 $0 $335 $0 $0 $0
KIDS - Piano
$264 $0 $0 $0 $0 $0 $0 $264 $0 $0 $0 $0
KIDS - Preschool
$175 $175 $175 $175 $175 $175 $0 $0 $0 $0 $0 $0
KIDS - Misc. Fees
$0 $0 $40 $100 $0 $0 $0 $0 $125 $0 $0 $0
KIDS - Camp
$0 $0 $100 $0 $0 $260 $0 $0 $0 $0 $0 $0
$25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25

INCOME Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1st Check -
$2,276$2,276$2,276$2,276$2,276$2,276$2,276$2,276$2,276$2,276$2,276 $2,276
15th Check
Other - $0 $0 $6,000 $0 $0 $0 $0 $0 $0 $0 $0 $0
Church Check - $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Other - $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total -
$10,576$6,576$12,576$6,576$6,576$6,576$6,576$6,576$6,576$6,576$6,576 $6,576

CASH FLOW Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Begin Balance -
$0$3,699$3,683$9,208$8,849$8,843$8,352$9,199$9,473$9,286$10,049 $9,483
+ Income -
$10,576$6,576$12,576$6,576$6,576$6,576$6,576$6,576$6,576$6,576$6,576 $6,576
$10,576$10,275$16,259$15,784$15,425$15,419$14,928$15,775$16,049$15,862$16,625$16,059 - Expens -
$6,877$6,592$7,051$6,935$6,582$7,067$5,729$6,302$6,763$5,813$7,142 $6,128
$3,699$3,683$9,208$8,849$8,843$8,352$9,199$9,473 $9,286 $10,049 $9,483 $9,931
Save -
$3,699$3,683$9,208$8,849$8,843$8,352$9,199$9,473$9,286 $10,049 $9,483 $9,931
Ending Balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Thursday, December 13, 2007

At A Standstill

Not too much to report. We did run out of money in our checking account and did resort to using a credit card to take care of Christmas. We will be able to pay it off in full when the bill comes but it is still upsetting to have to use credit.

On Jan. 1 we will get my husband's big commission and this will put us back in the better position of having money set aside for the low commission months.

What actually got us into trouble this month was a problem with my husband's commission this month. He had forecasted a commission of $2,500, but it came in at only $150. Of course this happened in the first month that we had no "cushion" money left in savings except for our $1,000 emergency fund. The problem with the commission was a combination of a mistake with his company's payroll, and too high of an estimate from my husband.

And could there be a worse month for all this to happen in?

On the 15th things will look up when my husband gets his next check, and everything should be fine on Jan. 1st.

And once the holidays are over I will hopefully dedicate the proper attention to finances once again! (New Year's resolution anyone?) :)

Sunday, December 9, 2007

This is Difficult!

Well, earlier this month we overdrew our checking account and got hit with a $25 service charge. Then this weekend I was making a purchase and tried to use my debit card (because I still hadn't managed to get to the bank to withdraw cash) and my card was declined.

What did I do? Did I put my purchase back like Dame Ramsey would advise? No. I didn't. I used my credit card. Yup. The ugly c word.

When I got home I checked our account to find we had a balance of $5.00.

I ran off to the bank to deposit a couple of checks I had been carrying in my purse but hadn't gotten around to depositing yet.

So, not paying attention to the finances for a couple of weeks has cost us.

Hoping to get back on track but this may require more than just hope.

Thursday, December 6, 2007

11/06/07 - Daily Progress Report

Well, I forgot to report on the Craft Fair I went to on Saturday. I ended up making about $127.00. Of course I had to pay $25 for the table, and I did spend a bit on supplies I needed, but I can use them for future events too. So, not great earnings but not a total waste of time either.

I really need to plan and research a little better next year. This fair was at a church and was their first year holding it, so there wasn't much traffic.

I did get a jewelry order from an ad I have in a local newsletter, and that will bring in $45 so I'm pleased with that.

Tuesday, December 4, 2007

12/04/07 - Daily?? Progress Report

Okay. My Progress Reports have been anything but "daily" lately!

We haven't exactly been off plan, but with life so busy lately, we have been just sort of cruising along. The biggest problem with this is that I haven't been to the bank to withdraw our monthly cash (we pay cash for all monthly expenses except bills and things like that) - so, the debit card has been in use. Yes, it's a lot better than the credit card, but it is so hard to keep track of what we are spending with the debit card. Seems I have really come to like the cash system.

We were supposed to withdraw $560 at the beginning of the month to cover groceries ($360), spending ($200), pizza ($80), and school lunch ($27). My task for tonight will be to figure out how much of this "cash" we spent via debit already so I can determine the right amount of cash to withdraw from the bank tomorrow. Once I have the cash I think we'll be in pretty good shape for this month.

As for the very low commission my husband got this month, he says that next month will make up for it with a very high one. (We should be able to save several thousand from next month's commission to save for future possible low commission months.) So, I'm feeling much better about that.

I do still need to check on the Christmas spending and see how in line we are to the budget. That will be quite a project.

I did manage to complete a full budget for next year for all twelve months. With my husband's raise and the big commission expected for next month, next year's budget looks really good. I have the debt snowball payments set at $1,100 still, but we may be able to up that quite a bit ($2,100?) and get out of debt that much sooner. (Can't wait for that!)

So, lots to do. And I hope to get back into regular daily posting. It definitely helps to keep me on track.

Thanks for the kind comments and encouragement from everyone!