Friday, November 21, 2008
It turns out we're doing really well with our plan to just stop spending money this month. Here's the damage, by category, as of today:
Booze $100, spent $168
Clothes $200, spent ($68)
Dining out $150, spent $14
Entertainment $100, spent $71
Food $700, spent $547
Gas $350, spent $196
Household $300, spent $131
Kids $50, spent $0
Other $50, spent $0
Total Budget $2000, Total Spent $1,059
I can't remember a month when we've done THIS well. Of course, we DID go over budget on booze, but let's be honest, this was NOVEMBER 2008, the month containing the most critical election in my lifetime. I'm sure we aren't the only ones who drank a little extra (either in celebration or to drown some sorrows). We actually bought a couple of bottles of nicer liquor for our Election Night sleepover and that right there was $70, so it explains our overage. Booze is spendy in Washington.
I think the big thing I'm noticing is that I don't even WANT to be spending money right now. The simple act of just making up my mind not to spend was all it took to curb my desire for stuff and things. Sure, the Christmas aisles at Target are bursting at the seams with shiny pretty things (like mercury glass, gah!), but since I know I'm NOT buying anything, nothing calls my name when I walk by. I wish I could say the same thing for dining out, but I am REALLY itching for a date night with Dave. I've been trying to perk up our weekly menus with more exciting fare, but still, a night out sans kids is pretty much a requirement for us. I think this weekend we'll go out to a movie together since there's no way I can wait until December to see Twilight.
I should note that we HAVE still been contributing to the economy this month. Dave and I both did our bonus spending and I'm typing this entry from my new MacBook ($1200 after discount and sales tax). Dave ended up spending a good chunk of money at the gun store, which was sadly unavoidable given the massive run up on guns before and after the election. It was basically buy now or forever hold his peace. I'm just glad that we were able to contain our regular monthly spending, so the only hits our savings account took were the ones we had saved for and anticipated. That's what good financial planning is all about.
Thursday, November 6, 2008
1. I stopped buying Maple Syrup. At first my kids, the addicts, were ready to stage a coup and find a new mother, but I've slowly convinced them that jelly or brown sugar is an acceptable toping for waffles. Maple Syrup had a bad crop or something this year and we were buying two bottles a month at Trader Joe's, not even Grade A and they were still $16.99 EACH. Total savings $30 a month.
2. I made two small changes to my beauty regiment that seem to be saving me BIG money. Ever since we moved to Washington, my skin has been more prone to breakouts (I blame AGE more than climate, but whatever). I'd been using Neutrogena's line of Rapid Clear anti-acne products, which magically and immediately cleared up my bumpy skin. (Like magic, seriously.)
But the cleanser is around $8. The cleansing pads are around $6 and I was mixing two lotions, the anti-acne lotion ($7) and Neutrogena's Visibly Even SPF 15 lotion ($14). So my total average monthly cost for everything was around $30. (Most of the items last slightly longer than a month, but not much).
Recently I decided to see if I could go back to using Neutrogena's original bar of soap, the soap my high school Dermatologist recommended when I had real teenage acne. And it worked GREAT. I could spend $1.49 a month instead of the $8 I had been spending on the cleanser.
After I confirmed that my soap substitution was working, I switched lotions, substituting TWO expensive Neutrogena lotions for a bottle of Target brand salictic acid lotion (same active ingredient) that I found on sale for $3.45. Again, it's working fine and my skin looks exactly the same as it used to.
Total beauty savings: $25 a month.
3. Next I was planning to brag that I haven't had a Wyder's Pear cider in over a month, but I caved tonight after swimming class and bought myself a six pack. For some reason it just doesn't taste as good when it's cold and rainy outside, so I definitely see myself drinking less. That could save us another $10 a month if I cut my habit in half.
So, overall these three nearly imperceptible changes are saving us $65 a month. Not a TON, but again, these changes were easy and have mostly gone unnoticed (the syrup did take a little getting used to, but kids are easy to brainwash).
And gas? I filled up my SUV for $40 this week. SHOCKING but true. It's a 2005 and I don't think I've ever paid less than $50 for a fill up. At times it has cost me over $80. (Please don't feel the need to chastise me for my SUV ownership, it was one of my biggest mistakes EVER. I LUST after your mini van and wish I'd been smart enough to buy one. Of course, my car is paid for, so the chances of me getting a mini van any time soon are basically slim to none.)
Have you made any small changes that are saving you big?
Sunday, November 2, 2008
- Clothes (I did buy Dave a pair of shoes today, but that was only because his only pair of work shoes BROKE). (Savings: $130)
- Non-essential household stuff (no antiques, make-up, hair stuff, decorations, Target dollar aisle crap, etc). (Savings $150-$200).
- No eating out. At all. (Savings $150)
- Nothing for the kids. Sorry. Christmas is only a couple months away, so I think we can go a month without buying any more toys/accessories/junk, etc. (Savings $50)
- Nothing in the "other" category. (Savings $50)
Basically, we'll be buying food, booze, movie rentals and gas. I'll be decorating for Thanksgiving with whatever I can find that we already own. I'll put off buying a new coat for another season. I'll buy household stuff, but only CONSUMABLES like shampoo, paper towels and zip lock bags.
My guess is that if we stick to it all month, we can EASILY save $500 to $600, so that's my goal.
There is one MAJOR exception to all these rules and that is my plan to simultaneously get all my Christmas shopping done this month. I'll be posting my shopping lists and budget soon, but I'm hoping I can get it all done before we even enter the crazy month of December. I'm hoping that by thinking it all through and being rational and thoughtful, we can save ourselves from our usual last minute spending spree.
So, necessities ONLY. Christmas shopping. Should be an interesting month!
Friday, October 31, 2008
My system isn't working.
This is how I've BEEN doing the budgeting (aka: the way that doesn't work). I spend money and keep the receipts in my wallet until I get the chance to enter them into Spend. Then, unless I might need the receipt for a return or for tax purposes, I pitch it. When I get behind, like I did last week and the receipts pile up, I just get out a yellow tablet, categorize everything and then enter it all into Spend as a single chunk in each category.
When you enter data into Spend, you don't have the option to split single purchases into multiple categories, you have to do that manually, which means when I spent $100 at Fred Meyer, it will inevitably be divided up into groceries, household, clothes, etc and I end up with no record of the TOTAL amount of that purchase, unless I either keep the receipt (which I haven't been doing) or painstakingly go back through all my categories and add up the Fred Meyer entries that are on the same date. This process? NOT SO FUN!
And then... the VISA bill arrives.
I've spent countless hours this week trying to figure out which expenses I've already entered and which ones Dave forgot to give me receipts for and I'm at a loss. I too overwhelmed to even begin to finish it.
I give up! I admit defeat! Our Visa bill was around $2300 this cycle and even though that represents a non-month (why can't the bills just run from the 1st through the end of the month?!?!?), it indicates we weren't HORRIFICALLY off base. Of course, that doesn't include the debit card spending, so who knows.
What I do know is that doing the same thing over and over again, like I've done for the past MANY YEARS and expecting different results is the definition of insanity, so I've already found a NEW MUCH BETTER SYSTEM, thanks to you wonderful readers.
I've signed up for mint.com and so far I love it. LOVE IT. Unlike Spend, it has the ability to track my spending online for me AND it automatically downloads all my purchases from ALL my accounts, which means I don't have to maintain separate account totals (debit spending, like at Winco/Costco vs. VISA account spending) AND the best part is that it allows me to subcategorize (ie: SPLIT) purchases, which is why I've generally avoided such programs in the past. Anyone can track OVERALL spending by just balancing their checkbook, but I almost always spend in multiple categories WITHIN THE SAME PURCHASE, so simply keeping an accurate ledger balance never tells me where my money actually goes. (Target isn't a CATEGORY, is it?)
Mint.com seems to be the solution to this problem and best of all: It's FREE.
I've got everything set up so we'll be a go to start the new system beginning tomorrow, the first of the month. Obviously, I'll let you know how it goes.
Tuesday, October 28, 2008
Does this happen to anyone else though? You think you're doing pretty well with your record keeping, but say, a certain MAN can't seem to fork over evidence of his spending? This has been a problem for us literally FOREVER, beginning back in the days when we were in college and flat broke and we'd leave the grocery store and I'd catch my husband pitching the receipt into the trash before I'd even gotten the chance to SEE it, much less write it down in the check register.
He's budgetarily challenged is what he is.
Professionally I've definitely noticed that there's always one spouse that seems to be good with money and one who's, well, not. What's it like in your marriage? And more importantly, do you combine everything or maintain separate accounts?
Friday, October 24, 2008
BUT! I have had one hell of a week and we are expecting 20 people and dozen rugrats here tomorrow night. The time management gods have been against me! However, I promise to come back here as soon as all the craziness is behind us and update the budget. I will come clean with ALL the damage. My guess is that we've spent at least DOUBLE our Halloween budget. Gah!
Wednesday, October 22, 2008
The total estimate for ALL the work I need(ed) is $4922. That's a root canal, crown buildup and crown and amalgam fillings for eight cavities. It represents about five years of me avoiding the dentist out of fear. (You can read about the fear at mandajuice). We have dental insurance, which my dentist accepts, but it's only $1,000 per year, so I decided to have half the work done now and half done in January.
Yesterday I had just the root canal and crown done and along with the general anesthesia ($575 per hour totally not covered by insurance), the total AFTER the $1,000 our insurance kicked in was $2295. If I DON'T have general anesthesia when I get the rest of my work done, I'll be out only another $400 or so. Yesterday's anesthesia was $1200. I'm sure it was worth it, if only for the fact that it got my butt in the dentist's chair again.
The thing I keep beating myself up about is that the estimate to completely repair EVERYTHING in my mouth two years ago? Was $800. Coulda, woulda, shoulda...
Monday, October 20, 2008
So Amy is taking a little bit of a maternity leave from her regular Advice Smackdown column at Alpha Mom and in her absence she asked other bloggers to fill in and answer some questions. She threw me a GREAT one: How much does it really cost to have a baby?
"For about $2,000, you can totally set yourself up for a baby. IKEA has some damn cute furniture and you can pick and choose which bright colored crap you want to stub your toes on for the next three years."I had a great time answering it, so I hope you won't mind clicking over to give it a read.
Thursday, October 16, 2008
And why, you may be asking, is my husband so awesome? Because he suggested that even though the new laptop will run me $1005 (after a discount from an AWESOME friend), I will still have $650 left over from the bonus to spend how I see fit. Basically, his argument is that I technically NEED a new computer and if my computer were to break tomorrow (which is obviously possible), the new computer would not be considered a "bonus" item. It would be a necessity. Dave got a new laptop earlier this year and he spent $500 on it. Because I would need a slightly more equipped machine than his (slightly better graphics card for photo/video stuff), he said basically I have a $650 computer allowance and only the rest of the cost of the Macbook will come out of my bonus.
Which means I STILL get to spend $650 on anything I want. The even CRAZIER thing is that Dave is against me getting a housekeeper. It makes him feel guilty or something both because he feels bad asking a stranger to clean up our mess and also because he feels like h'd rather just help me more than he does. Also? I think he's a wee bit worried that after a few months, it would become an expectation instead of a "bonus" type item. In the end, he's offered to help me out by cleaning floors and bathrooms and generally being awesome. We'll see how it goes. (And by "see how it goes" I mean I'll be reserving at least $300 for future housekeeping needs).
So Rhiannon? What's your schedule like?
Wednesday, October 15, 2008
My "allowance" is $1,000.
My first inclination was to save the money because that's just how I roll, but upon further discussion with my husband, I came to the understanding that if I go and invest the money? He'll get to spend HALF of whatever I earn on it, which basically means that I'll get HALF the return on my investment. Which is nice, right, because my husband is so FAIR and all, but still, I think I'd rather spend the money than to postpone my gratification for a lousy return.
By the way, it is nice that my husband and I share LITERALLY everything. We do our best to stick to our monthly budget, but anything, LITERALLY ANYTHING, that we want to buy or spend money on outside of our normal expenses is discussed. At length. We make completely joint decisions. The reason we've decided to give ourselves a little extra this time is that Dave's been at this job for over a year now and he could frankly USE a little fun money to spend. He works hard and it sucks for him that he never gets to buy any toys because there isn't money in the budget for them. So this is his chance. It makes working hard for extra money actually FUN, rather than just a boring way of padding the retirement account. Giving me an equal share to spend however I want was actually HIS idea.
So he's going to spend his portion on the judicious preservation of the second amendment by purchasing firearms. Hopefully this will lead to a hunting trip and a giant freezer full of meat, we'll see. Either way, he's spending the money 100% on himself.
My first inclination was to use the money to replace our center kitchen counter with a chopping block. I want one SO badly since I'm sick of all my pie crusts and pizzas having a square grid on the bottom. I really need a flat surface for all the cooking I do. So I did some research and decided on this one:
It's four-inch-thick American Black Walnut end grain and would match PERFECTLY with my dark hard wood floors. It's also thick enough that I could basically destroy the crap out of it, sand a layer of it off every year and never run out of fresh chopping block. But sadly, the size I need weighs 160 pounds and costs over $1500 NOT including shipping or installation.
Then I priced out getting a stainless steel center counter (honestly if I could remodel my kitchen I would have all stainless steel counter tops with a contiguous built in sink and a beautiful chopping block center counter. Like an industrial strength kitchen!), but YOWZA, it would cost even more than the chopping block. (I found this shocking!)
Then I started thinking that spending my share of the money on home improvements really isn't all that fair. It's not like Dave is spending his $1,000 on the landscaping he wants to get done or on upgrading the furniture in his office. Nope. He's spending the money ON HIMSELF.
What a novel concept!
Home improvements are one of things we're saving the REST of the bonus money for, so I decided I should really spend the money on ME. I loved reading all of your ideas. A lot of you had ideas worth considering.
The money came today and I STILL don't know what I'm going to do. I'm down to a few final ideas, though, so maybe you can help me choose.
1. Purchase a cheap sectional couch to replace our beat-up living room couch. Last night I punished Genoa for shoving a princess doll into the gaping hole on the side of it. The only downside is that it would definitely have to be fabric because we already have a nice leather chair and you can't match leather. And fabric + children = nastiness all over my couch which may or may not be worse than the current couch even with its lovely taped up arms.
2. Housekeeping. This is probably the idea I'm most leaning towards. I was vacuuming the floors the other day with the realization that I will never get that time back and how much BETTER my life would be if I wasn't always so concerned about the appearance of my house (and how it is either a TOTAL PIT or PERFECTLY CLEAN, depending on when I'm having guests over). Also? I haven't cleaned my own shower in so long that it could grow legs and walk out the front right now and I wouldn't bat an eyelash (no one ever sees my bathroom!).
3. A shopping spree of epic proportions. I was thinking it might be fun to call Rhiannon and ask her be my personal shopper at J. Crew. I need new boots and a new coat and it would be so fun to have my own little episode of What Not To Wear. I'm generally SO CHEAP about clothes that using the money to invest in a better wardrobe would bring me long(er)-lasting happiness. But I dunno, I can probably buy some boots and a jacket at JC Penney this month and still stay under budget.
4. Art for the house is another idea. At least one piece caught my eye when I was shopping in downtown Camas on Sunday. I also love the idea of having several of my own photographs printed onto canvas. Those run around $100 each, depending on size.
5. Part of me just wants to put the money in cash and carry it around with me (figuratively, not literally) until something catches my eye. It would fun to spend the next few months making the occasional rash purchase without worrying about the budget.
6. I could buy myself a Macbook.
7. Some combination of the above...
What do you think?
Tuesday, October 14, 2008
The cost of this meal (not including the leftover orzo, which runs more because of the POUND of fresh mushrooms it takes) was under $10! ($6.32 for the pork, $3.50 for the grean beans, butter and chicken base, the rest of it I had in my pantry!). And because I stole her magazine, I invited Carol for dinner, so that $10 ended up being dinner for three extremely voracious adults, two kids and one lunch for Dave in leftovers.
The only downside to cooking like this is the TIME. I literally shopped in the morning, dropped my son off at preschool at 1:00, picked up an Rx at Target (which is conveniently located between our house and the preschool) and spent the entire rest of the afternoon in the kitchen. Cooking from scratch has its benefits (like having a happy husband and eating a delicious meal that would've easily cost $20 a plate at a restaurant) but you have to love cooking and actually have that much time available to you.
Instead of sitting down and relaxing/writing/paying the bills, I spent my daughter's two hour nap cooking. (I also baked a pound cake from scratch during that time too). It's definitely one of my favorite ways to pass the time, but I understand it's definitely not for everyone. It helps to LOVE your kitchen and I've definitely been cooking more often and more complicated things since we've been in this house simply because I finally have the space to do it. It wasn't that long ago that we were crammed into a too-small apartment with almost zero counter space and I definitely didn't cook as much then!
The rest of the week is also filled with new recipes:
- TUESDAY, October 14th
Bistro whole chicken (from a recipe I found in the Sunday paper) with roasted cauliflower and baked or mashed potatoes.
- WEDNESDAY, October 15th
Homemade pizza. I made an extra crust on Friday, so I'll use that.
- THURSDAY, October 16th
Chicken and broccoli bake (a recipe I found in Cook's Country) with baked potatoes or rice. (I haven't decided yet).
- FRIDAY, October 17th
Crispy pork cutlets (also from Cook's Country but extremely similar to the kind I usually make) with rice and smashed peas.
- SATURDAY, October 18th
FEND. We'll probably have leftovers and I'll make mac 'n cheese for the kids.
What you cooking this week? How much time do you spend in the kitchen?
Monday, October 13, 2008
I have a question for you:
I currently send 6% of my salary to my 401k and my company matches 4%. During these horrible economic times would it be better to just take my portion back down to 4% and take that 2% and just put it in my ING savings account? I don't want to hurt the economy by panicking but I also want to do what is smart. You're smart, so what do you think?
I'm so so glad you asked me this because I think you're reaction is a normal one and it gives me the chance to talk about one of my other favorite investing principles: DOLLAR COST AVERAGING.
When you invest in a 401(k) through your employer, what you're doing is buying your investments in monthly or twice-weekly installments. When you purchase investments in installments, it's actually somewhat good for you when the market goes down because that means you get to buy MORE of your investment for the same dollar price. It's like getting a discount. And when the market goes up? Well that's cake.
My advice to you, if anything, is to INCREASE the percentage of money you send to your 401(k) right now. Cash (like the ING account) is the last thing you want to BUYING with your 401(k) dollars when basically the entire stock market is at a historically low price. It's like the world's biggest sale is going on right now and everything is 40% OFF. It's a GREAT TIME to invest if you can handle the short term risk.
Of course I'm making some assumptions about your situation. I'm assuming that you're my age(ish) (I'm 32) and that you plan to work a good long time before you retire, like 20 years or more and that your money has time to weather the current storm.
However, if you tend to be more risk-averse and couldn't sleep at night knowing you were investing in the stock market, it might be time for you to increase your allocation bonds (which I'm assuming you already have in your 401(k)).
Saturday, October 11, 2008
Clothes $106.05 (I spent $100 on jeans for Dave, but he hasn't even tried them on yet and I imagine at least one pair will go back to JC Penney.)
Dining Out $70.62
It seems like I'm already WAY over on my grocery budget, but I'm really not. I just exceptionally well stocked up. My freezer is FULL. I'll need to buy milk this week, but that's about it!
Friday, October 10, 2008
It's just... PEOPLE. Selling everything in your 401(k) because of market insecurity is insane. IN-SANE. It's crazy for two reasons:
1) What you're doing? It's the opposite of the most basic, fundamental stock market rule. You're supposed to BUY LOW and SELL HIGH. Not freak out and sell low.
2) You'll never make your money back.
I mean it. If you take your money out of the stock market right now and then wait until it starts to go back up again before reinvesting, you WILL NOT MAKE YOUR MONEY BACK. I don't know how much clearer I can be.
Attempting to time the market is both reckless and IMPOSSIBLE. It can't be done.
Because you're going to miss the upswing. After most major stock market crashes, there are a handful of days when record returns are achieved and if you're not IN the market on those key days because you're worried about short-term losses, you'll never see those gains in your portfolio.
Fidelity (one of my favorite money managers) has this great tool that you can play with that will illustrate exactly what I'm talking about.
I'm not attempting to tell you what to do with your portfolio, but I am going to blame this entire stock market catastrophe on LACK OF PROPER FINANCIAL EDUCATION. If more people had chosen to properly diversify their assets using the basic tenants of asset allocation, this fear wouldn't be causing such a huge sell off.
Wednesday, October 8, 2008
- Broiled chicken thighs $4.87
- Yukon gold mashed potatoes $3
- Butter $.60
- Heavy cream $.50
- Fresh green beans $1
- 1 teaspoons chicken base $.16
And the dinner was damn tasty, if I do say so myself. Chicken thighs are one of my favorite go-to meats since I can find Foster Farms brand at $1.29 per pound at Costco. (You can buy them at Winco for .99 cents a pound, but the quality isn't as high). I literally just throw them on the broiler pan with a little salt and pepper and broil them with oven door shut for about a half an hour. The fat mostly drips down into the pan and we don't actually eat the skin, it just keeps the meat moist.
The green beans were my favorite part, though. I ate WAY too many for my little pouch tummy, but MAN, it was worth it. They're really easy to make: brown them in butter and then add a teaspoon of chicken base (I used organic, which is expensive, but healthier) and some water and cook covered for about six minutes or until tender. SO TASTY. Chicken base makes ALL the difference.
The amount of beans pictured above was actually for three dinners: last night's chicken/mashed potatoes and tonight's Shepherd's Pie. I often cook in batches and plan my meals to reduce my kitchen time. Last night I peeled, cooked and mashed NINE pounds of yukon gold potatoes (only a third of them are pictured above). I made extra green beans and while I was watching the debates, I cleaned and sliced two pounds of white mushrooms. Tonight all I have to do is brown some meat, cook the mushrooms and grate some cheese for the Shepherd's Pie. I have enough to make an extra one for the freezer, which I'll put on next week's menu.
I'm really looking forward to reading Stefania's round up post and seeing what everone cooked for $10!
Tuesday, October 7, 2008
Pork chops with mushroom orzo pasta and smashed peas. But, when I went to add it up, I went over:
- meat $6.32 (I bought an entire loin at Costco for $18.47 and divided into three portions).
- mushrooms $1.75
- orzo pasta $1.49
- peas (half a bag of frozen store-brand baby peas) $.69
- onions (sweet walla walla are my downfall) $1.63
- 3 teaspoons of chicken base $.47
- 4 tablespoons of butter $.40
- 4 tablespoons of olive oil (for frying pork chops) $.40
- flour (for dusting pork chops) $.05
- sliced tomato $0 (from my garden)
Next I thought instead of making the orzo, I'd just make some plain pasta with jarred sauce and I'd add some panko crumbs to the pork chops to jazz them up a bit, like so:
And this seemed to work:
- meat $6.32
- organic Coscto pasta $.99
- 1/2 jar of Fransisco Renaldi $.75
- peas $.69
- oil $.50
- Panko crumbs $.50
- 1 egg $.16
And this would've worked had I not decided that I just didn't WANT plain old peas for dinner, especially not when I had $3.73 worth of fresh baby asparagus in the fridge. Then I used way more than a cup of panko bread crumbs and an extra egg and then we put Parmesan cheese on the pasta as well. The total cost ended up being more like $14.37.
But it was yummy!
Tonight I'll make my FINAL attempt!
- Broiled chicken thighs $4.87
- Yukon gold mashed potatoes $3
- Butter $.60
- Heavy cream $.50
- Fresh green beans $1
- 1 teaspoons chicken base $.16
I'll let you know how it goes after I cook tonight, but it's definitely been eye opening. When Stefania asked me to participate, I told her I though MOST of our dinners cost under $10, but I was obviously wrong. I think it's a two-fold problem: meat and vegetables. The piece of pork loin I cooked last night was over 2 pounds. We eat A LOT of food at every dinner. The kids and I shared ONE of the pork chops pictured above, but Dave? ate THREE. I used the three leftover pieces for two lunches for him.
Fresh veggies cost SO MUCH more than frozen. I went to Fred Meyer yesterday and spent $9.42 on POTATOES. Sure, I bought over nine pounds of Yukon Gold deliciousness, but that's only going to stretch into 3 meals for us. (Tonight as a side dish and then a double recipe of Shepherd's Pie; I always cook an extra one for the freezer). I spent over $3.00 on green beans (again for three meals), but frozen? It would've been half that cost for even more beans. I can also almost NEVER find asparagus for less than $3.99 a pound and it was on sale for $2.69, so I bought one bunch for $3.73. It adds up!
How much do you spend on the average dinner for four? I really had never thought about it before Stefania's challenge!
Monday, October 6, 2008
Our first Q&A is from the infamous and adorably pregnant Jonniker!
First of all, I've been meaning to tell you how much I miss the Naked Ledger. I LOVED IT. Loved it loved it loved it. It was so helpful. Second, I was hoping to ask you two relatively simple questions about life insurance and choosing a financial planner. Since we're having our first baby in the spring, we're adding life insurance AND looking to add a financial planner to our life. Our biggest question/issue is, how do we choose the right financial planner? So many of them are scary, and we're pretty smart people (smart about our money, too), and a few I've met with haven't been NEARLY as impressive as you -- they ask basic questions like, do we have a 401K and are we saving? TO WHICH I FEEL LIKE SCREAMING NO SHIT! OF COURSE! DO YOU THINK WE'RE STUPID?
And insurance agents -- are they all the same?
I appreciate you even reading this. I trust you, and I don't know anyone in my actual life who is unbiased who can answer such questions. Sometimes it's easier to ask these things of a stranger, rather than your friends or family :)
Great question! (And not just because it's a super easy one, although that never hurts.) There is BUT ONE way to chose a financial planner. Go here:
The National Association of Personal Financial Advisors (NAPFA) at http://www.napfa.org/. Read around a bit (nothing but good info there!) then click on Consumer Information and then Find an Advisor. You have to fill out a little bit of info about yourself, but DO NOT HESITATE. You can either chose to have local advisors who meet your search criteria contact you (this used to be part of my job) or they will give you a list and you can contact them. Either way, this is THE WAY to pick a planner.
And here's why: OBJECTIVITY.
Objectivity is the MOST IMPORTANT factor in selecting your financial advisor. If you're smart about money, like I know Jonna is, then what you're looking for a planner who is not just qualified, but whose interests line up DIRECTLY with yours. The only way that can happen is if you pick someone who isn't selling any product other than their advce. NAPFA planners are all 100% fee-for-service ONLY. They generally get paid in one of three ways:
- They charge a percentage of the assets they manage for you. The percentage usually ranges from 1-3%, depending on portfolio size (the smaller your portfolio, the larger the percentage) This is a good arrangement for people with large investment assets. 1% of a $1,000,000 portfolio is $10,000 per year, which is a very reasonable fee for financial planning on that level. At my last job, $10,000 a year was our firm's minimum fee. It was Silicon Valley! What can I say?!
- Flat fee. This is probably my FAVORITE way to pay for a financial planner because it is truly THE most objective way to pay for your services. An annual contract for a certain amount that is determined and agreed upon in advance is PERFECT. The reason I prefer the flat fee over an assets-under-management fee is that even though the percentage fee is objective, as the portfolio grows, the planner makes more money, so he or she might be more biased toward growth. This might be perfect if you're a more aggressive investor, but not SO perfect if you tend to be more conservative. Also, when it comes to financial planning, an asset manager is going to want to manage as much of your assets as possible, which means they might be biased against other uses for your money, like paying off a mortgage or buying an investment property, etc. I'm not saying this happens often (I've never seen it first hand), but it COULD happen. With a flat fee, you're paying for the PLANNING and that's all.
- Hourly fees. I LOVED working as a by-the-hour planner. I got paid for ONLY the time I spent and it was one of the least expensive ways for people to get financial advice, but there's always that moment where client would open their bill and think, "she spent 12 hours on THAT?!?!" I hated that part, but an experienced planner will give you a not-to-exceed estimate and that's always nice.
Never EVER chose a family member or a friend for your planner. I don't do planning for my family. It's a GLARING conflict of interest. Sure, I give my family advice, but I would never in a million years ever manage their assets.
Never chose anyone you couldn't fire immediately without personal repurcussions. While I have ADORED my clients over the years and felt very strongly like they were My People, the relationship was always professional. Planning was my JOB and they were my CLIENTS, not my friends. That was a line I never crossed.
That said, DO interview more than one planner. There is a HUGE variety out there. I loved my last job because we did more than just plan FINANCES, we did a lot of LIFE planning. We pushed a lot of clients out of their comfort zones and made them talk about what was REALLY important to them. Not all planners care that much and not all clients want to get that personal with their advisors. Some planners are attracted to the field because they love numbers (these are the planners who work best with engineers and scientists). Some planners are attracted to the field because they like the personal interaction and relationship building (like me).
As for the insurance agent question, chose your planner first and they will have EXCELLENT local resources for life insurance. Insurance planning is a HUGE factor in any good plan, so your objective, fee-only planner will guide you in the right direction.
If you want my take on life insurance (and want to know why you shouldn't own anything but term life insurance), you can read about it here:
CYA: Cover your ASSets
Sunday, October 5, 2008
I also keep separate shopping lists for different stores. F-M is Fred Meyer, which is the only place I can find orzo pasta, Max Factor mascara (the ONLY brand in the universe worth using!) and where I most like to buy my produce. W-M is Wal-Mart where I like to buy their store brand crack punch/cancer juice (Crystal Light), lean ground beef (least gristle of any brand) and that awesome all natural Jimmy Dean sausage. Target is Target, obviously and I mostly just have some stuff to return there when I get the chance.
The rest should be pretty straight forward except that FEND means I make something easy for the kids and Dave and I fend for ourselves. I also like to keep a little list reminding me what I have available for lunches, so I don't get bored/desperate/lazy and grab a burger (like I did today while we were out).
Do you meal plan weekly? Monthly? Never?
Also! Don't forget to tell me how you'd spend $1000. I need some ideas!
The rules are:
No saving or investing the money
No paying off bills
Nothing for your children/husband/anyone else
You just have to spend it on something fun for yourself or something that would improve your life. Give me all your ideas!
Friday, October 3, 2008
This means that along with the baby red potatoes I roasted (I forgot I was out of orzo pasta!) and the broccoli, dinner for TWO PEOPLE and one lunch was close to $20. Again, I only buy salmon once a month, but this is a good illustration of how the AMOUNT you eat can affect your grocery budget. We eat A LOT.
Thursday, October 2, 2008
A short list of things I won't buy for the KIDS to eat: (I reserve the right to eat junk food MYSELF! Yummy yummy JUNK FOOD):
preservatives (TBHQ especially)
artificial flavors (including Vanillin)
Partially hydrogenated ANYTHING
The only things we eat from a box are Annie's "organic" mac 'n cheese (I put "organic" in quotes because only the pasta is actually organic.) and organic pop tarts, both of which I buy it in bulk at Coscto. My kids get all natural bread (which is why it costs $1.88 instead of 2 loaves for .99 cents). I bought tortillas the other day at Winco, but those are for Dave and me, not for the kids. I buy the kids' tortillas at Trader Joe's, where I can buy them without dough conditioners and preservatives. Ditto for hot dogs; I can't buy Ball Park franks for .99 cents a pack, instead I fork over $3.99 for the all natural ones at Trader Joe's (and honestly? They taste WAY better. We eat them too).
A normal day of food around here goes as follows.
I normally feed the kids Fred-Meyer or Wal-Mart brand homestyle waffles (oddly enough EGGO brand waffles are FULL of crap like food coloring and preservatives, but some (not all) of the store brand waffles are actually all natural and in fact, extremely well fortified). We used to go through about $20 a month worth of real maple syrup (I swear it costs more per ounce than VODKA), but lately I've just been buttering the waffles and giving each kid about a teaspoon of brown sugar to dip them in. It's both cheaper and healthier, mainly because there is less sugar in a teaspoon of brown sugar than there is in a teaspoon of maple syrup and my kids were both major syrup fiends. Alternately I make them oatmeal with milk instead of water and add some brown sugar. They rarely eat cereal, but if they do, it's organic Gorilla Munch from Trader Joe's.
Dave and I both drink a BUNCH of coffee with milk in the morning, like four cups each. He doesn't eat before noon during the week. I eat the same EXACT breakfast 7 days a week: two packets of Quaker Maple & Brown Sugar flavored oatmeal. I realize I could save money making it myself from scratch, but I am addicted to the sweet packety goodness. (I make one packet with milk in the microwave and then add the other packet on top DRY. YUMM. Sometimes the kids ask me to make their oatmeal "mommy style".)
Lately I've been helping Dave pack his lunches. He normally takes leftovers from whatever I made the night before. If there aren't any, he'll eat a couple cans of chili and some cottage cheese. He usually also takes a banana, some dry Grape Nuts and a small bag of totally plain peanuts.
For the kids' lunches, I've got a pretty standard rotation between mac 'n cheese, hot dogs, quesadillas, turkey sandwiches, cheese sandwiches, or chicken nuggets (I buy the all natural brand they sell at Costco). I sneak some fruit onto their plates with whatever else I serve.
For my own lunch, I usually either eat whatever I serve the kids or I make myself some Ramen, a hot dog or an egg/sausage burrito.
I always make the kids eat fruit first when they want a snack and THEN they can have a cheese stick or a yogurt or a single pop tart or whatever other snacky thing I've found on sale (like goldfish crackers, etc).
Personally, I have an addiction to Wavy Lays potato chips with Ranch dip (from the packets). That's usually my afternoon snack. And candy. I LOVE candy. I have to sneak it so the kids don't ask for it, but I'm a big snack size person. A couple mini Snickers with a diet coke and I'm set. (I never said I was a health nut!)
Most nights I make a big production out of dinner. I cook A LOT. I've been keeping a (mostly updated) dinner menu on my sidebar at mandajuice for several months. We eat some kind of animal protein every night of the week. Dave has diabetes and that means he needs protein and he has a big appetite, so cheese ain't gonna cut it and I can't make a meal out of pasta for him. I always make a nice vegetable (fresh when I find stuff on sale, otherwise frozen peas/corn/green beans). I usually make rice/pasta/potatoes as well.
I always serve the kids a vegetable with dinner. If they eat their vegetables and most of their dinner, we give them a tiny scoop of (all natural) vanilla ice cream with sliced peaches (or bananas) for dessert.
I never make a separate meal for the kids. They eat whatever WE eat. I never make anything TRULY objectionable, but if they hate it, they get to eat a banana before bed. I don't let them starve.
That said, tonight I'm making salmon, which I won't feed the kids (I'm super paranoid about mercury contamination and I hate the taste/texture of the more expensive un-farmed salmon), so I'm making them mac 'n cheese, chicken nuggets and peas. Dave and I will have the fish with some broccoli and my homemade mushroom orzo pasta, but he won't be home until after 9:00, so I'll be making it after the kids go to bed.
For the record, salmon is a HUGE splurge for us. At $6.99 per pound, it's literally the most expensive thing I ever buy and I usually only buy it once a month. This time I bought a $14 fillet and I'm going to try and put half of it in the freezer for later.
The big challenge for me is that one of the big ways people save money on dinner is by stretching the meat out and adding a can of this and a can of that. I just don't cook that way. I make casseroles, for SURE, but my lasagna and shepherd's pie are from scratch and not actually all that cheap to make.
I went to Costco today, so I'm going to try and post that receipt tomorrow with the details.
Wednesday, October 1, 2008
CLOTHES: This one's pretty obvious, but I lump all of our clothes/shoes/underpants into a single category. Aside from Dave's clothes (suits, shirts, etc, which we normally get at the Men's Wearhouse), I'm EXTREMELY cheap about clothing. For the kids, I try to stick to a strict $7 limit per item (but often find things for half that amount) and for myself the limit is more like $25. I don't buy anything designer EVER. I'm an Old Navy, Kohl's, JC Penny's, Macy's SALE RACK kind of girl. I wash my clothes A LOT, so it doesn't make sense to me to spend a lot of money for things that rarely last longer than a year. Anyway, sometimes $200 is more than enough and sometimes we need to spend way more than that to meet our needs.
DINING OUT: I separate dining out from entertainment mainly because it's always a trouble-spot for us. Have I mentioned that Dave and I like to eat? And drink? Because we do. The $150 I have budgeted here is meant to be enough for Dave and I to have at least ONE nice dinner out per month, plus eat out some lunches and take the kids out for pizza once or twice. It involves an incredible amount of restraint for us to stay under that amount!
ENTERTAINMENT: This category is mostly dedicated to the second amendment. Dave likes to go to the gun range on the weekends and unfortunately the price of ammo has gone up something like 50% over the past year. It can be an expensive hobby, especially after you add in range fees, etc, but Dude, the man works six days a week, let's not begrudge him his firearms! I also include movie rentals, actual movies (you know all THREE MOVIES we go to every year) and any other fun things we do that cost money (like local events, air shows, etc) as entertainment. $100 is usually enough for Dave to go shooting at least twice and for us to rent some extra movies.
FOOD: This is the infamous $700 grocery budget. I shop mostly at Costco, Winco, Wal-Mart and Fred Meyer. I'm Cheap with a capital "C" and I do just about everything I can to save us a penny. We just eat A LOT of food and we usually have friends over to eat (or cook for friends) at least a few times a month. This is obviously our biggest discretionary expense.
GAS/AUTO: We have two Nissan Xterras. I realize this is ridiculous, but it's the second time Dave and I have had the same cars at the same time. We used to both drive VW Jettas. Great minds think alike you know, except for the whole gas guzzling thing. We only get about 16 miles to the gallon. We do our best to save gas where we can, but gas is 'spensive! $350 is about our average monthly spending, not including oil changes. If I could exchange my Xterra for a minivan, I'd do it in a heartbeat!
HOUSEHOLD: This $300 is the catch-all category for pretty much anything you'd buy at Target or Wal-Mart that ain't food. Toilet paper, paper towels (my roll-a-day addiction), cleaning supplies, toothpaste, BEAUTY items (I buy my makeup at Target and my hair goop at Ulta with 20% off coupons), shampoo, Astroglide, you name it, it goes into this category. It also includes just about anything I buy to make the house look pretty, like pillows or art or awesome velvet ottomans from the church rummage sale like I got last month for $8. I'm also attempting to start a plate collection so I can beautify the giant empty wall in our entry way, so this category also includes antiques.
KIDS: This is the place where I put toy purchases or general stuff that is for the kids only. $50 seems like a lot to me now that we aren't buying diapers anymore! Last month it included a new booster car seat for Alex and a bunch of princess crap from the dollar store for Genoa. That was money well-spent because now she's staying in her bed all night! It doesn't include the kids' activities, though, I'll get to that in a minute.
OTHER: Anything that doesn't fit in the above categories. There's always something! $50 is an arbitrary number I pulled out of the sky.
These categories are noticeably devoid of things like BILLS. Because honestly? Those are personal and Dave and I need to have SOME level of privacy. I mentioned that I consider preschool MANDATORY and that's mainly because I've agreed to send my child to school this year and I intend to pay that school for his spot. It's only $145 per month, but it's a fixed cost and thus, not something I would ever label as "discretionary." Alex also does karate and soccer and swimming and sports camps, etc, but those are mainly one-time expenses, so they are not included in our monthly discretionary spending.
Speaking of savings, we DO save. We DO invest for both our retirement and so that we can someday help our children go to college. We do not live paycheck to paycheck and we keep our savings account well padded for emergencies. We don't have any credit card debt. (Although we do have student loans, a mortgage and a single car payment). Our credit scores are over 800. We give to charity. And we do all this on a single income. Some day soon, I'll go back to work and do my best to save 100% of what I earn for the next 40 years. My point is, we have a PLAN. A HEALTHY plan. We can afford to spend $2000 a month on our discretionary spending without it being a problem for us.
Our lifestyle is OUR lifestyle and we enjoy it. We give up a lot to be able to relax about our monthly spending. We don't vacation. Dave doesn't golf. The only club membership we pay for is the one at Blockbuster Video. Our kids will go to public school. Financial planning is about trade offs and this blog is not so much a "budgeting" blog as it is an illustration of one family's spending.
Do you have different categories than I do? If so, I'd love to hear what they are!
I've posted our entire budget on the sidebar ---> but here's how we did for the month of September:
- Booze $100, SPENT $98.29
- Clothes $200, SPENT $181.52
- Dining Out $150, SPENT $164.69
- Entertainment $100, SPENT $84.85
- Food $700, SPENT $697.90
- Gas/Auto $350, SPENT $395.48
- Household $300, SPENT $335.55
- Kids $50, SPENT $51.63
- Other $50, SPENT $7.55
- TOTAL $2,000, total SPENT $2,017.46
This October I'm going to be focusing on my grocery budget of $700 per month. Part of sticking to the budget is that at the end of the month, our cupboards are TOTALLY BARE. I've had to make lunch for Dave for the past two days because he would look into the fridge and go, "What the hell, Woman? There's NO FOOD!" So I used our last half dozen eggs to make egg salad for one day and gave him leftover pasta the next. Yesterday there was absolutely NOTHING left, so I went to the store and decided to just start the month's spending a day early. I had already also been to Target on Monday and done some household shopping (we were totally out of toilet paper!).
At Target, I spent $37.71 on food. I buy our coffee at Target since it's the only place I can find it, so that was over $25 right there and should last more than a month. That $37.71 also included some candy since I can't resist the Halloween candy, gah! but I used a $1.00 off coupon and got two bags for $3! I think I also bought some frosting for Alex's birthday cake and a gallon of milk too.
On the same trip I also bought some clothes for Genoa. I finally went through her dresser and realized she only fit into about four long-sleeved shirts, one of which was stained with chocolate milk. So I bought her 3 pairs of pants with 3 matching shirts, spending a whopping $4 on each piece for a total of $25.97.
(I also let Genoa pick out a present for her brother's birthday and also bought a couple of items to make a Halloween decoration project. More on those expenses later this week after Dave and I have decided on a specific Halloween budget.)
Yesterday I picked Alex up from preschool ($145 a month, not included in the budget above because it's not "discretionary", it's mandatory) and we headed straight to Winco to stock up on food. Now, I'm a HUGE price shopper. I buy certain things at certain stores because we buy too much food to be able to take advantage of one stop shopping. I have to be more careful with prices. I buy meat, some cheeses, organic pop tarts and Splenda at Costco and I try to buy everything else either at Winco or Wal-Mart. It's only when I'm feeling lazy or I have good coupons that I shop at Fred Meyer.
So here's what my extremely short list looked like when I left the house:
Actually, that was the list after I got back to the house, hence the crossed off items. In case you can't read my writing, it lists:
pomegranate-lemonade (great for cocktails!)
That coupon peeking up out of the back was for $1.00 off three bags of Reece's candy, which I purchased and then forgot to to use the coupon. For the record, the first thing I did when we got to Winco was to purchase a slice of cheese pizza and a water for the kids for $2.68. Alex had FRIGHTENINGLY low blood sugar and it was either feed him or start digging his grave because he was GOING TO DIE OF HUNGER.
Anyway, this is what my receipt looked like, since I obviously found LOTS of stuff that was not on my list:
(Click on the photos to go to Flickr and get a better view. I took these pictures with my iPhone, so sorry for the crappy quality.)
Things I stocked up on because the price was right:
bread, 4 loaves at $1.88 each (usually $3.50 at Fred Meyer at full price or 2 for $5 on sale!)
tortillas, 40 count for $5.34 (I stuck them in the freezer in 10 count zip lock bags)
chili for Dave's lunches, $1.42 a can (never under $2 a can at Fred Meyer)
pasta sauce, $1.49 per jar ($2.22 at Fred Meyer last time I bought it there)
The only cheap meat I found was a bag of frozen pre-formed hamburgers, which I like to keep around for the nights I forget to defrost anything (like last night when I was supposed to take a whole chicken out of the freezer before going to bed and forgot! I remembered first thing this morning, but it won't be defrosted by the time I need to cook dinner). Cheeseburgers it is!
Admittedly, I did spend $7 on bulk mushrooms, but my plan is to make shepherd's pie with those and I always make at least one extra for the freezer. Also, Dude. We love mushrooms, so there's nothing to apologize for.
I'll be heading to Coscto tomorrow to buy meat, since all I have left in the freezer is a whole chicken and those hamburger patties. This is going to be an expensive week, but I'm buying a lot of things that will last us a while and I'm definitely saving us money buy purchasing bulk when the price is right.
Coming later this week:
* A Q&A about choosing a financial planner
* Halloween and birthday party spending
* My take on the BAILOUT (beware, it's not going to be NICE)
* A breakdown of what each category includes
* A discussion about what I will and won't feed my family, no matter how much it costs