Yet Another Attempt At Tracking Expenses?

Yes, I have already made two attempts to track actual spending during the past year, and I have failed miserably both times.

Why then, have I decided to give it another shot?

Tracking expenses is an important aspect of personal finance. At least I believe it to be. And I am in good company.

Tracking expenses is an important step in Joe Dominguez's financial plan outlined in his book Your Money Or Your Life. Those who have been reading my blog will know that I started following this plan at the beginning of the year. (Read about the steps I have completed here.) I have had much trouble trying to track all money that comes into and goes out of my life.

Well, the money that comes into my life I have been able to track. It is the money that goes out that I have had trouble with. I guess that so much money goes out of my life that this is quite a daunting task! But as I feel it is an important step I am going to try again starting March 1st. The difference this time is that I will be tracking only one category, the one that I believes the most attention in my family - food.

Now, I am a bargain grocery shopper. I clip coupons, scan the sale flyers, shop a variety of stores, and stock up on good bargains. But groceries are not the problem area. Dining out/take out and "coffee breaks/snacks" I feel should be more closely monitored. So, March first another attempt at monitoring will begin.

My plan is to keep an envelope in my purse for all food receipts. Each week or at the end of the month, I'll go through the receipts and categorize the food spending. Then I can continue along with the step of Your Money Or Your Life, which will include evaluating weather or not I received sufficient value for these "food" expenses, in relation to the amount of life energy my family traded for it.

I'll keep you posted!




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Read more on this topic in Your Money or Your Life (Part 1), The Daily Tracking of Expenses Experiment is Over, and Trouble With Tracking.

March 2008 Budget

Expenses:

CASH Clothes	$0
CASH - Gifts	$0
CASH - Groc	$500
CASH - Parti	$0
CASH - Pizza	$80
CASH - Sc Lnc	$36
CASH - Spend	$350
CASH - Other	$0
DEBT - Chase	$900
DEBT - HEL	$200
HOME CblPh	$181
HOME - Elec	$187
HOME - Mnt	$25
HOME - Mrtg	$2,355
HOME - Oil	$350
HOME Trash	$0
AUTO - Gas	$500
AUTO - Insu	$138
AUTO - Maint	$25
PERS Contcts	$0
PERS - Lf Ins	$256
PERS - Newsp	$8
PERS - Rx	$0
PERS - Rx	$0
PERS - Cell	$0
PERS - Sports	$0
PERS- Braces	$3,000
KIDS - Bball	$0
KIDS - Piano	$0
KIDS - Prschl	$175
KIDS - Misc.	$0
KIDS - Camp	$100
SAV - Fut Exp	$0
SAV - Vaca	$0
SAV-Heat Sys	$0
MISC-Sch Fee	$5
MISCELL	$0
TOTAL $9,371 Income: 1 pay - $2,337 15pay- $2,337 15cmis- $500 Bbysit - $200 Church - $100 Sav - $4,000 Total - $9,474

Braces

Well, despite the fact that my husband and I both have very straight teeth and have never had braces, looks like both of my older daughters will need braces.

Daughter Number 1 needs them asap. The work begins in March. Luckily we have dental insurance that is going to pay $2,000 toward the braces, leaving us with $2,300 to pay out of pocket.

They set it up so that you pay $100 a month for 2 years. I asked if there was a discount for paying in full up front and she said it would only be a 5% discount.

I have budgeted for this but - next month we are very tight with the budget. We would need to take everything out of savings except for our $1,000 Emergency Fund in order to prepay for the braces. We would most likely be able to replenish the savings (for vacation/sister's destination wedding, and to replace our furnace this summer) in the next few months (large commissions expected as well as large tax return expected). This is how I have planned our budget but now I'm starting to wonder if this is really the best thing to do. Even if next month wasn't tight, is paying for the braces up front the best thing to do? Would we be better off putting more money to our debts? 5% is a pretty small discount, we would earn almost as much by putting the money in savings.

Not sure what to do . . .

Daily Progress Report

Haven't had much time to post this week. The kids are on school vacation this week, so we've been busy.

I was able to earn a little money babysitting this week. Originally I was going to babysit for three whole days, at $10 an hour I would have made $240, but it didn't work out like that unfortunately.

First the three whole days turned into two full days and one half day. Then they ended up not needing me the two whole days and only needed me the one half day. I was very disappointed because I was really looking forward to the extra money and I had planned our vacation week around those obligations. So, today I babysat for a half day, but they ended up paying me for a full day since they had canceled out on me at the last minute.

Anyway, in the end I earned $80, so not too bad.

I am planning on taking two of my daughter's skiing one day this week though, and skiing is so expensive! They have been wanting to go for the past two years and we haven't managed to take them yet, so I'm going to bite the bullet and just take them. I did plan for it in our budget for this month, but we do have a very tight budget this month. So, I'll need to be very careful with the rest of our spending this month.

What's worse is that I just found out from my husband that he won't get his commission in March with his first check on the 1st, but will have to wait until the check he gets on the 15th. This is going to make March a very very tight month. I might have to transfer some funds from savings.

At least we found out in advance and have a little time to plan for this bump in the road.

Women And Money, by Suze Orman

Today is your chance to download a free copy of Suze Orman's book Women And Money.

Suze Orman was a guest on Oprah yesterday and just for today anyone can download a free copy of her book! Just go to Oprah's website and check it out!

Save Money With Small Changes

It isn't easy to find money for savings. Most budgets are stretched already. The rising cost of food and fuel make it that much more difficult to find any extra funds in your budget. But if you want to save more money or to add to your debt snowball a review of any frequent small expenses can be a good place to start.

Small expenses that are repeated frequently can add up to a lot of money. The "latte factor" is a well known example where giving up your daily latte can save you a significant amount of money over time. But maybe you're not a coffee drinker so you ignored this advice. But maybe there is another small item that you repeatedly pay for that you haven't evaluated yet? Do you pay a daily toll that you could avoid by driving an extra 5 minutes? Do you treat yourself to a daily candy bar as an afternoon pick me up? For me, my daily small expense is Diet Coke. A lot of Diet Coke. This is an area where I could definitely save money.

I go through about five 12 packs of Diet Coke a week. (Waaay too much!) Although I do try to buy it on sale, I spend, on average, $15 a week on this expense, or roughly $60+ per month. If I were to instead put that $60 a month into a mutual fund earning 12% interest (a supposition that is often asserted as possible by Dave Ramsey), after 25 years I would have $112,863.99! Now I really like Diet Coke, but not to the tune of over a hundred thousand dollars!

Now just because giving up a frequent small expense will save you money, doesn't necessarily mean that you should feel compelled to give it up. You should evaluate your small recurring expenses in terms of value.

The first question you should ask yourself is "Is this spending in line with my values?".

For me, drinking Diet Coke is not in line with my values. It has no nutritional value and has been linked with medical problems (including possibly cancer). Your small expense might be perfectly in line with your values and wouldn't necessarily be on the chopping block for this reason.

But, next you should ask yourself "Do I derive sufficient value for this expense in terms of how much life energy I am trading for it?".

This is an important question raised by Joe Dominguez in his amazing book, Your Money Or Your Life. The book points out that we all have a limited amount of time here on earth and asserts that money is something we trade our life energy for. Therefore, you should evaluate your spending to be sure that you feel you are getting sufficient value for the amount of time (life energy) that you are trading for it.

To get a realistic assessment you need to calculate your real hourly wage. This involves figuring out how much time you give to your job (including commuting time, decompressing time, etc.) and how much you earn (subtracting taxes, money spent commuting, money spent on work related expenses, work lunches, convenience foods, etc.). For my family, our real hourly wage figures out to $23.50 per hour. My spending on Diet Coke costs my family more than 2 1/2 hours of life energy a month. Not horrible, but we wouldn't mind getting back an additional 2 1/2 hours from work time.

In the end, only you can evaluate if your spending is in alignment with your values and if it is providing you with sufficient value. What will pass the tests for one person would be considered ridiculous by another. Personal finance is personal, after all.

The important thing is to take the time to evaluate your spending. Small changes can save significant money.




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Read more on this topic in Your Money or Your Life (Part 1), The Daily Tracking of Expenses Experiment is Over, and Trouble With Tracking.

Daily Progress Report

Did a bit of shopping today. Bought some spring/summer clothes for my girls as well as some winter clearance items for them for next year.

Also got 2 Glade Scented Oil Candles - for free! I had a coupon to buy 1 of them and get another one free, and I had a rebate to buy one and have the full purchase price reimbursed. So, net result - 2 free candles! I will save these in my gift closet.

I love free stuff! :)

The Daily Tracking of Expenses Experiment Is Over (Yes, Already)

February 1st I began my second attempt at tracking all money spent every single day. And today, February 11th, I have given up!

It's not that I don't think that tracking expenses is valuable, I do. But I find that daily tracking is far too difficult and time consuming. And more importantly, I think that trying to do this has taken my attention away from earning extra income and cutting current expenses. Instead of going through my receipts trying to remember everything I spent for the day as well as checking our on line account, I think my time is better spent going through the flyers looking for good deals and cutting coupons, or going through my house finding items that I could return or sell on ebay.

Another reason that I think I can avoid the daily tracking of expenses, is that I use the cash envelope system for all our monthly expenses (except bills we pay online, gas for our cars which we pay at the pump by debit, and preschool tuition we pay by check). At the beginning of the month I withdraw all the cash we will need for the month (for groceries, for gifts, for spending money, for school lunches, for Friday night pizza, etc.). By doing this, I have in effect, already tracked my spending. I have a limited amount of cash and I don't spend more. If I needed to spend more, then I would need to track that.

So, my new plan is to track my actual spending monthly.

I am going to take the time at the end of each month to compare our actual spending to our budget for that month. This should take a lot less time and will hopefully be just as valuable.

How do you track your actual spending?




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Read more on this topic in Trouble With Tracking and Your Money or Your Life (Part 1).

Good Deals This Month

Here are a few good deals (free!) that I am taking advantage this month. I am stocking up on these items to give as gifts (or little "add-ons" to gifts) or as stocking stuffers or extras in the Easter basket.

Staples:
- Package of 8 Staedtler Colored Permanent Markers - $12.99 (free after rebate)
Purchase at Staples between 2/3/08 and 2/9/08 then submit rebate on line. (Whoops, just realized that it's too late to take advantage of this now. I purchased on 2/9.)

Walgreens:
- Fructis Shampoo, Conditioner, or Masque - up to $4.29 (free after rebate)
- Softsoap Spa Radiant Body Wash - up to $4.49 (free after rebate)
- Mennen Speed Stick Deodoarant - up to $3.99 (free after rebate)
Purchase items at Walgreens between 1/25/08 and 2/23/08. Residents of Alabama, Arizona, Georgia, Hawaii, Massachusetts, Minnesota and Tennessee can submit rebates on line at www.walgreens.com. Residents of other states must complete rebate form from the EasySaver cataglog available at Walgreens. Choose to get your rebate in the form of a Walgreens gift card and get a 10% bonus!)



I figure that every little bit helps and you can't beat free! Earlier this month I already got some Garnier Nutritioniste facial cleanser, Garnier Nutritioniste moisturizer, Fructis shampoo, and now Fructis conditioner, all for free (after rebate). Then I got a free sample of some Lacoste Pink perfume in the mail. I am adding all these items that I got for free to the birthday gift I'm giving to my sister (a sweater). She will enjoy these items and it will make my small sweater gift into a whole bag of fun stuff for her!

Net Worth Update - Feb 2008

I've decided to add a section in my side bar to track our net worth from month to month. Hopefully this will inspire us.

ASSETS:
Home - $440,000
Personal Property - $10,000
Savings - $5,020
401K - $190,000
Roth IRA - $7,000
Total: $662,020

LIABILITIES:
Mortgage - $240,000
HELOQ - $27,000
Credit Card - $3,575
Total: $270,575

NET WORTH:
$381,445

Could We Be Debt Free in 3 Months?

With mortgage interest rates going down, we have been considering refinancing. We currently owe $240,000 on our house. We are 5 years into a 20 year mortgage with an interest rate of 5.25%.

We are thinking about refinancing to a 15 year mortgage. Currently we could get a rate of 4.99%. This would not extend the term of our mortgage and would save us money every month.

What I hadn't thought about until last night is this - I think we need to "pay off" our HELOQ before we can refinance. Since we don't have $27,000 (amount of the HELOQ) sitting around, we would need to include this amount in our refinance. So instead of refinancing for $240,000, we would need to refinance for $267,000.

I ran the numbers and it seems that we would still save a significant amount of money each month:

"If you refinance your current 5.25% mortgage and your current 8.25% mortgage into a single 4.99% mortgage, your monthly payment will decrease by $279.97 and you will save $51,688.20 in interest charges over the life of the mortgage."

(Am I figuring this right?)

And I can't help but get excited about the fact that this would have us completing Baby Step 2 in the next 3 months! I know that this isn't really paying off the HELOQ, but just rolling that debt into our mortgage and extending the payments over 15 years. But it seems like this option will save us a good amount of money. And I would be soooooo happy to move on to the next step of saving our Fully Funded Emergency Fund. And then on to saving for college (which I have been worrying about since DD1 will start in just 7 years and nothing saved yet!).

Any comments on why this approach may or may not be good would be much appreciated!

(Somehow it seems too good to be true - and that makes me suspicious!)

Update On Debts

Well, we have been plugging along for just about one year now since we found Dave Ramsey and began our journey in February of 2007.

When we started we had $44,000 in debt, not including our home mortgage.

Currently our total debt is $29,992, not including our home mortgage. So, a little over $14,000 paid off in one year. Even though if you include the interest we paid it was more than $14,000 - it still seems like we should have been able to pay more (since my husband is lucky enough to earn a six figure salary). I listen to the Dave Ramsey radio show and some of the stories from the callers are just amazing. People with significantly smaller salaries have been able to pay off significantly more money in one year. I think we need to get more "gazelle"!

Our last two debts are:
Credit Card: $3,575
HELOQ: $26,417

The credit card should be paid off by May. Then we'll just have the HELOQ to worry about.

If we continue with our current snowball amount of $1,100 it will take us until August 2010 to pay off the HELOQ. We should really be able to do it much faster.

If we could raise our snowball amount to $2,100 (which is what I had originally planned when my husband got a big raise a few months ago) we could have it paid off by March 2009.

The problem is that we have some expenses that will need to be dealt with along the way, and it seems these are in effect lowering the snowball amount from the $2,100 back down to $1,100. Here are the upcoming expenses:

- Braces for DD1, estimate: $3,000+ (out of pocket)
- Sister possibly having a destination (Caribbean) wedding this year, estimate: $3,500+
- New furnace/heating system to buy this summer, estimate: $4,200+

We need to complete our tax return and see how much we'll be getting back. And I guess we'll be getting the tax stimulus money, so these things could help.

I would really like to be debt free within the next year. And I think we can do it if we really put our minds to it!

One other possibility is that we might refinance our home mortgage. We currently have 15 years left on our 20 year mortgage. If we refinance we'll go with a 15 year mortgage so the term will be the same. We'll see what interest rate do over the next few weeks.

Oh, just thought of this - if we refinance the mortgage I think we'll need to pay off the HELOQ or roll that debt into the refinanced mortgage. Even though this is really just transferring the debt and spreading the payments out over 15 years, this might be a way that we could move forward to saving up our Fully Funded Emergency Fund of six months of living expenses. This is very appealing to me as I definitely feel a lack of security in not having significant savings. And we need to get started seriously saving for the girls for college. The oldest will start in just 7 years!

Refinancing is sounding better and better. Am I looking at this the right way?

Trouble with Tracking

Ugh! Tracking all expenses is difficult! I can't keep up! Guess I'm spending too often if it's too hard to keep up with tracking!

It seems like such a simple thing to do, but it's not. I'm always checking our on line account to monitor our expenses. You'd think this would make it easy to check the day's spending, but it seems to just complicate things. Usually I'll record the days spending as I remember it and check on line to make sure I didn't miss anything, or check to see if my husband spent anything or paid any bills, etc. Sometimes a transaction (debit) doesn't appear until a couple of days after. Then I can't tell if it is something I already recorded or not.

Then there's the problem of tracking things like when I earn or spend CVS extrabucks. Do I count it as earnings when I get the extrabucks and then count as spending when I spend them? That seems logical but for some reason it can get confusing.

Then the thought of trying to reconcile all the daily totals into monthly totals seems like it will be a lot of work.

I need to figure out a better way to do this. Maybe a spreadsheet in Excel.

I used Quicken for a short time in the past but couldn't keep it up.

I think this could be a very valuable process if I can learn to get it right. I like the idea from Your Money Or Your Life, when you total your spending in each category for the month and then EVALUATE how you feel about the spending for each category. Like you're fine with it, would rather increase that spending, or would rather decrease that spending (did you receive value in proportion to life energy spent for each category).

I really want to get to that evaluation step, so need to figure out the daily tracking part.



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Read more on this topic in Your Money or Your Life (Part 1).

Ebay

Sold 3 nice photo/scrapbooking albums that I'm no longer using - earned $91 not including shipping! :)

I am very motivated now to keep on listing every week!

And ebay is helping - they have lowered insertion fees and got rid of the fee for a gallery photo. This is really great! Now it is very reasonable to just go ahead and list just about everything!

If you haven't tried selling on ebay yet, now is a great time to give it a try!

Today's Income & Spending (Catching Up)

SUNDAY
Income:$125 (3 gift cards/birthday gifts)
Spending:$21.17 (clothes purchase)

MONDAY
Income: $150 (reimbursement check from Sony for tv repair)
Spending: $29.33 (dh auto gas)

TUESDAY
Income: $135 (health insurance reimbursement)
Spending: $402.18 (debt/cc payment)

WEDNESDAY
Income: $0
Spending: $47 ($3.20 lunch from Burger King, $44 groceries)

Today's Income & Spending

It's still morning, so I'll have to update later.

Go Patriots! :)

Yesterday's Income/Spending

SPENDING:

$??? - Fancy Dinner Out for my 40th birthday(my husband earned a reward dinner at work, so he will be able to expense our dinner! Good thing too as the bill came to $219!! which did include a ridiculously priced $69 bottle of wine. We did have a drink at the bar and tipped the valet which won't be reimbursed. So I'll have to find out the exact amount of all this. And now that I think about it, I guess I have to count the entire meal cost as spending and when we get reimbursed it will count as income.)
$40 - Babysitter for evening out
$4 - Tip for valet

INCOME:
None today (though I do have 3 items on ebay and 2 currently have bids for a total of $44.50 so far, but I guess I can't count these earnings until the auction ends and I actually get the money.)

I'm 40 Today

I turned 40 today. It's a very strange feeling.

Financially I think we should be in better shape at this age. (And I could certainly be in better shape physically too! lol!) But overall, I am very happy with my life at this point.

I guess I'm about half way through my journey in life. I'm looking forward to being wiser in the second half than I was in the first half.

Thanks to everyone for all of your support! :)

February 2008 Detailed Budget

CASH - Groc $400 CASH - Gifts $45 CASH - Parties
CASH - Pizza $		$100
CASH - Sc Lnch		$36
CASH - Spend $		$280
CASH - Bday/Ski		$400
DEBT - Chase		$500
DEBT - Equity		$200
DEBT - Citi		$400
HOME - Cable/Ph		$181
HOME - Electric		$220
HOME - Mainten		$0
HOME - Mortgage		$2,355
HOME - Oil		$360
HOME - Trash		$0
AUTO - Gas		$400
AUTO - Insurance		$138
AUTO - Maint		$0
PERSNL - Contact		$99
PERSONAL - Insu		$0
PERSNL - Newsp		$7
PERSONAL - Rx		$0
PERSONAL - Rx		$10
PERSONAL - Cell		$0
PERSNL - Sports		$0
PERSNL- Braces		$0
KIDS - Basketball		$0
KIDS - Piano		$264
KIDS - Preschool		$175
KIDS - Misc. Fees		$0
KIDS - Camp		$0
SAVNGS - Fut Exp		$0
SAVNGS - Vacat		$500
SAVINGS-Heat Sy		$0
MISC - School Fee		$17
MISCELLANEOUS		$0
TOTAL		$ 7,087
INCOME		Feb
1st Check (31st)		$2,337
Commission		$729
15th Check		$2,337
Other		$160
Church Check		$25
from Savings		$1,500
Other		$0
Total		$7,088
CASH FLOW		Feb
Beginning Balance		$0
+ Income		$7,088
Subtotal		$7,088
- Expenses		$7,087
Subtotal		$1
Save For Next Month		$1
Ending Balance		$0

Great Deals at CVS This Week!

I went to CVS today and took advantage of the great deals they are having this week. Here's what I got and what I paid:

(10) packages of Lay's Potato Chips/Doritos Chips @ $2 each = $20.00
earned $10 in Extrabucks = $10 final cost ($1 per bag!)

(1) package Stayfree maxipads @ $3.29
earned $3.29 in Extrabucks = $0 final cost (free!)

(2) Garnier Nutritionist facial products @ $5.99 each = $11.98
minus (2) $2 off coupons on display near product = $7.98
earned $7 in Extrabucks = $ .98 final cost for 2 ($ .49 each!)

(1) package of Arm & Hammer toothpaste @ $1.99
minus $1 off coupon from flyers = $ .99
earned $1 in Extrabucks = $0 final cost (I actually earned $ .01!)

(2) 4 packs of Energizer Rechargable batteries @ $8 each = $16
minus $1 off coupon from flyers = $15
earned $6 in Extrabucks = $9.00 final cost ($4.50 each)

Today's Income & Spending

Today's Income:
$1,000.00 - Transferred from Savings Account
$27.39 - CVS Extrabucks (like money to use at CVS)

Today's Expenses:
$43.55 - Groceries @ CVS (great deals & earned Extrabucks!)
$45.00 - Haircut (ouch! Special treat for my 40th birthday)
$5.00 - Tip for Haircut
$36.?? - Dinner Out (with the kids)


The money transferred from savings was in our budget for this month as it is a low commission month for us. Got some great deals at CVS (see post above)! Splurged on an expensive haircut so I'll look fabulous when I turn 40 this weekend.