So now what? {An update on our Financial Peace Trek}

It's been awhile since I wrote about our financial goals. Since we just significantly lowered our income, and since Nathan and I are going to be two of the co-leaders for a session of Dave Ramsey's Financial Peace University starting next month, I decided it was time to take a look at how we're doing with our trek to financial peace. We've made lots of progress, but we still have a long way to go.

To review Dave Ramsey's baby steps and the progress we've made so far, step one is to put $1,000 in the bank. That one was pretty easy for us with two incomes; we've never had less than $1,000 during our marriage. Step two is to pay off all debt except your mortgage, but we deviated from Dave's plan a bit. We have no mortgage and had quite a bit of debt in the form of graduate school loans, so we decided to pay off all debt except the grad school loans. We called this Baby Step 2, Phase 1, and we completed it early in 2011. Then we moved on to step 3, which is building an emergency fund of 3-6 months' expenses. This baby step kind of bugs me. Three months and six months is a big difference. How do you know when you've completed it? We just decided on a nice round number, and after saving that amount about two years ago, we began paying off the grad school loans.

Originally we thought about setting aside money for a down payment on a house at the same time we were paying off the loans, but we decided it made more sense to pour all our extra funds into getting rid of the debt as quickly as possible to avoid paying more in interest. We've questioned this decision from time to time as we watched the real estate market, but ultimately, we can't predict the future, and we're okay with renting.

Our goal for 2012 was to pay off half the grad school loans. I never did write a post on how I did with my 12 to Tackle in 2012, but I can say that we successfully met our financial goal. I called this our "Big Hairy Audacious Goal" because I really didn't think we could pull it off. Well, we did! The initial goal for 2013 was to be completely debt free with a 3-6 months' emergency fund. However, we could only do that by putting 100% of my income (and then some) towards paying off debt. Without my income, this isn't just an audacious goal, it's a nearly impossible one.

So now what?

Well, we are still putting as much as possible towards becoming debt free. I say "as much as possible," but within reason; we want to be able to enjoy life. As of now, seven months into 2013, we have paid off around 75% of the grad school loans. Our only remaining debt is two subsidized federal government loans. Can we be debt free by the end of the year? Probably. The question is, do we want to be? By the end of the year, the amount of debt we have will most likely be less than the amount in our emergency fund, so if we wanted to, we could use the money from our emergency fund to pay off our debt (assuming we have no serious emergencies). The financial adviser we met with doesn't think we should do it. He told us, "Dave Ramsey says once you have your emergency fund, you don't touch it." True, but Dave also says to pay off all debt before worrying about building your larger emergency fund. So, we're not sure what we'll do when we reach that "break even" point, but for now we're just continuing to work towards reaching that point by the end of the year.


How's your trek to financial peace? Which do you think is more important: having lots of savings, or being completely debt free?

Life as a Working Mom & The True Cost of Working

Evan usually wakes up to eat around 3:00 am. At 5:30 it's time to feed him again and get ready before feeding him again at 7:15 to ensure he's as full as possible when I drop him off at daycare. I haul my bags and my baby out to the car, drop Evan off at daycare, and then try to be productive at work for a couple hours. By the time I get into the groove, it's already time to go upstairs to a dirty, dusty, cold room to hook myself up to a machine to make my son's first bottle for the next day. A couple more hours of work, then I go feed Evan at daycare, grabbing some sort of fast food on my way back to work. I try to eat while working, and after a couple more hours of work it's time for another pumping break. I work a few more hours, then it's time to go pick up my son.

At home I barely have time to feed my dogs before I have to feed my baby again. By this point Nathan's usually home, and we try to see what we can scrounge up for dinner. I'm usually too worn out to cook anything. One of us usually ends up holding Evan most of the evening. My once easy-going, fairly independent baby is now clingy in the evenings. After spending most of his day lying on his back in a crib or on a play mat, competing with seven other babies for attention, who can blame him? I try to spend some time with my husband in between nursing sessions, but it's hardly quality time. I sterilize all my pump parts and bottles and get everything else ready to do it all over again tomorrow.

On Evan's second day of daycare, I got a call from one of the directors because he'd had all three of his bottles by noon. Not sure if he was going through a growth spurt or just being over fed, I stayed home with him on Wednesday. It was definitely a growth spurt, but hoping it would level off, I went back to work Thursday. I left him with 3 bottles and told them I would be back at noon to nurse him. By the time I arrived at noon, he had already taken all three bottles and was hungry for more. Unable to feed him, the daycare workers had left him crying on the floor. It was undeniable at this point that the best place for a baby, especially one fed exclusively breast milk, is with his mother.

I tried to keep working. If I could just make it eight more months, we would be 100% debt free and have an emergency fund of at least 5 months' expenses. Evan would never remember being in daycare. I thought there had to be a way to make it work. Maybe I could do freezer cooking on the weekends and clean after Evan's gone to bed. Maybe if I gave up breastfeeding and gave him formula

After four weeks back at work, I gave my two weeks' notice. It was by no means easy to do. I'm not a quitter. I'd been working there almost four years. I got comments on Facebook telling me it would get easier, to just hang in there. I just couldn't. I admire women who can make it work, but it wasn't for me.  I wasn't giving my best to anyone: not my job, not my son, not my husband, not myself.

I had to stop crunching the numbers and look at the big picture. Quitting my job was not a good move from a purely financial standpoint. Even after daycare and increased costs related to me working, I was still bringing home a decent amount of money. The thing is, there's quite a bit more to life than money. I could relate to a lot of what Amy from The Finer Things in Life wrote in a blog post about what working outside the home was costing in terms of her time, her marriage, and her health. It just wasn't worth it to me.

A lot of it came down to this: At the end of my life, what will I regret? Will I be more likely to regret having less money during this time in our lives and being in debt a little longer, or missing out on the first year of my son's life?

I don't think I'll regret this decision.

An $8 date

We've made it a priority in our marriage to have a date every week. This may sound expensive, but our dates are rarely the traditional dinner and a movie type dates. In fact, the one time we did eat out and see a movie the same day, it was lunch and a matinée. 

 For our most recent date, we took a long walk downtown.

 We walked along the canal...

 watched the local animals...

had fun taking photos...

 

 watched part of a free concert that happened to be going on...

and saw parts of the city we'd never seen before, like the central library.

(It's pretty epic.)

And we just had fun.

We bought some sorbet at the mall, which was our only expense other than the unavoidable parking costs. 

 

It was one of the best dates we've had in a while!

Being a One Car Family

One cost-cutting measure I've seen recommended numerous times is becoming a one car family. Ugh. Every time I saw someone make that suggestion, I cringed. I vowed that would never happen in our family. I'm sure part of my thinking came from my grandmother, who had her own car despite the fact that she almost never drove. Cutting back to one car just seemed too radical.

I started to think a little differently when we moved at the beginning of this year. Instead of being 20 miles away from work, my commute is about 0.4 miles. In other words, I can walk to work, home for lunch, back to work, and back home in less time than it took me to drive to work before. Do we really need another car when I'm that close? Even if the weather conditions make it unsafe for me to walk, it wouldn't be too inconvenient for a coworker to give me a ride. In fact, three people offered to take me home one day when it was snowing.

I still resisted the idea of going down to one car. I wanted to at least have the option to drive. But two weeks ago, Nathan's car died. Completely died. There's still a chance it could be fixed, even though we've been advised not to put another dime into it, but so far we haven't messed with it. Nathan has been driving my car to work, and I've walked every day, even in rain and snow. And guess what? It hasn't been that bad. Will we buy a replacement car? Maybe..maybe not. It will of course be necessary when we move or if I change jobs, but for now, one car is actually okay.

There are several advantages of not having a second car and walking to work...

• I'm forced to get some exercise.
• The walk to work makes me much more awake and ready to start my work day.
• I can't go buy fast food for lunch (at least not on my own).
• I sometimes see geese, ducks, and killdeer on my commute.  
• We save money on gas, even if not a lot. 
• If we do get rid of the second car, we'll save on insurance and maintenance. 

And the disadvantages?

• I don't feel like jogging when I get home. (I do walk another mile with Nenya though.)
• If Nathan has car trouble, I can't go pick him up.
• I can't run errands during lunch.
• It's not easy to go to doctor's appointments, although I found a dentist right by work.
• People think I'm weird. Walking commutes are rare in the suburbs I guess.
• I don't like inconveniencing people, so I hate asking for rides.

We aren't sure what to do about our car situation for the time being, but at least I know we can survive with one car.


Are you, or have you ever been, a one car family? If not, would you ever want to be one?


 

Back to a Monthly Budget and Other Budget Changes

 
One of my most popular blog posts and the oldest one still currently in the top ten most read is No More Monthly Budget. I'm sure we scared a lot of people with that title. What? No budget? If you haven't read the post, what we did for 2011 was track our budget in periods based not on calendar months but on thirteen periods of four weeks. Since I'm paid weekly and Nathan is paid every two weeks, there can be quite a variation in income from month to month. With four week periods we would have consistent income (two of Nathan's paychecks, four of mine). It sounded good in theory, but it only took a few months to realize how inconsistent income really is. Although we kept with it for all of 2011, for 2012 we're going back to monthly budget periods. We've also made a few other changes to the way we budget that should work better for us.

A monthly allowance

A new budget category is an allowance for each of us. For the first year and a half of our marriage, we basically had to discuss every purchase with each other. And if one of us made a big purchase, that meant the other had to curb his/her spending for that budget period. To help eliminate some of this, we've now budgeted a small amount of money for each of us to spend each month however we choose. If Nathan wants to eat out for lunch, I can still buy shoes. We still have a "General Spending" category for purchases that we agree to make.

A dates category
Last year, we lumped all eating out (lunches during work and dates) into one category. We also had a separate entertainment category. We've now eliminated "Eating Out" as a separate budget category and made it a sub-category under our allowances and under a new "Dates" category. We've also made "Entertainment" a sub-category under "Dates."

Adding "rollover" money
What we did last year if we had money left over in different categories, was put the leftover money into paying off debt or our emergency fund. Now, if we have $7 left in the date category at the end of the month, for example, that's money we can still use for dates next month.

A new budget system
We track all of our spending, income, and bank accounts in an Excel program Nathan made. Last year we had a separate spreadsheet for each budget period, but this year Nathan made one Excel file that we can use for all our financial tracking for the entire year. If anyone would like to know more about our system and how Nathan programmed it, I'm sure he'd be happy to explain it.

Here's what the big picture looks like for February. That big chunk we're putting towards student loan payments still isn't enough to keep us on track with our goal of paying them off in two years, but it's close and there's not much else we can cut. I said it was an ambitous goal!

What changes have you made to your budget to make it work better for you?



Review: The Money Saving Mom's Budget

With all the books and blogs out there about financial management and saving money, it’s difficult to know which ones are worth reading. When I first started trying to figure out couponing in the spring of 2010, I was reading at least six blogs on the topic. It wasn’t long before I’d unsubscribed from all of them except for one local blog and Money Saving Mom, written by blogger Crystal Paine. What set this blog apart? I began reading during the middle of a series on how Crystal and her husband paid cash for their first home. And she wasn’t even 30 yet! She knows her stuff.

I was excited to read Crystal’s book The Money Saving Mom’s Budget, and even more excited to have the privilege of receiving an advance copy. By the end of the first chapter, I knew I would not be disappointed. This isn’t just a book of money saving tips that you’ve already heard; it’s a book that helps you discover what you want to achieve and then shows you the steps you can take to achieve it. At first glance, the second chapter, “Streamline Your Life and Cut the Clutter,” isn’t even about money at all, but it’s possibly the most important one.

Although some of the concepts will seem a little basic to those who are a little more financially stable, such as the “secret formula” of creating a budget and saving $60 a year, unless you have met all the financial goals you ever hope to achieve, you will learn something from this book. My husband and I have had a written budget since the beginning of our marriage, but I still enjoyed reading through the chapter on budgeting since our system is far from perfect. And if you’re worried this book will tell you that you have to live on beans and rice and never have any fun until you’ve achieved your financial goals, you will be happy to see chapter eight: “Going out on the Town Without Going Broke.” It’s a book for real people.

What I love most is that Crystal shares this wealth of information in a way that is like a friend cheering you on, leaving you inspired rather than discouraged. Most of the time when a book I’m reading gives some “exercise” to do, I brush it off and just keep reading. But when Crystal talks about setting financial goals, I actually thought about what financial goal we could achieve in the next six months to a year. There’s a lot of passion in this book.

Crystal Paine’s passion for helping others is truly evident in her reason for publishing this book. While originally hesitant to accept the book deal, she realized what an impact it could have if she gave all the proceeds away. And that’s what she is doing: all of her proceeds will support Compassion International. When you buy a copy of The Money Saving Mom’s Budget, you will be giving money to a Child Survival Program in the Dominican Republic that offers life-saving health and medical care to expectant moms, young moms, and at-risk babies and young children.

Want to win a copy of The Money Saving Mom's Budget? Just leave a comment!

For additional entries (leave a separate comment for each entry):

1. Like Newlywed Trek on Facebook and leave a comment telling me you liked the page.

2. Follow Newlywed Trek on Twitter and leave a comment telling me you followed.

Be sure to leave a link to your blog or your e-mail address so I can contact you!

The giveaway will end January 18, 2012. Winner will be announced January 19.

Gazelle Intensity

“Give no sleep to your eyes, nor slumber to your eyelids.  
Deliver yourself like a gazelle from the hand of the hunter, 
and like a bird from the hand of the fowler.”
- Proverbs 6:4-5

You should have as much energy escaping from debt as a gazelle has when escaping from a cheetah. Dave Ramsey calls this gazelle intensity.

Run! Escape!

But sometimes, I get tired of running. Sometimes I don't want to live like no one, living in a cheap apartment and packing my lunch every day. When we go through periods of lost income, I feel like we'll never be out of debt. Why bother trying to escape?

If you've ever felt like that, here's some inspiration.

Brand Loyalty

For the most part, I'm not very brand loyal. I buy whatever brand I can get for lowest price at the time. I have no problem buying Meijer brand toilet paper or Kroger brand salad dressing, and I'm currently using Suave shampoo and Herbal Essences conditioner.

I think it's interesting to see what brands people insist on buying - a certain kind of diapers, a particular brand of toilet paper. I searched our apartment for cases of brand loyalty and found three. I will not compromise when it comes to these three items!

1. Crest Cinnamon Rush toothpaste

Nathan and I were both using this toothpaste before we met. It's not so much a case of brand preference as it is flavor preference. Neither of us like mint flavor, and this is the best non-mint toothpaste out there. Even if it costs $3 and I can get another kind for free, I'm sticking with the cinnamon.

2. Clean & Clear persa-gel 10

Not all creams with 10% benzoyl peroxide are created equal. This is the only one I've found that doesn't leave a flaky residue. It goes on clean and clear!

3. Lemi Shine dishwasher detergent

This stuff is amazing! A Target cashier once referred to it as "gold" when I was buying it. Until we move somewhere without super hard water, this is the only detergent I will put in my dishwasher. It's worth the extra money to not have white powder on all our dishes and utensils. The detergent I use for the pre-wash is still whatever is cheap though.

How about you? What are the brands you have to buy?

Our Labor Day Weekend

We spent a lot of our three-day weekend working on more decluttering. We filled Nathan's trunk (a huge one!) with boxes and bags of excess to take to Goodwill. We also sold a box of books at Half Price Books for $11.50 (and managed to leave the store with $3). 

We continued weeding out the clutter after the Goodwill trip. I spent time going through my dresser, asking questions like how many pairs of Christmas socks is excessive? Nathan went through his closet and found several shirts, pants, and ties he didn't need. We came up with enough extra clothes between the two of us to fill at least another trash bag!

Marsh was tripling coupons again this weekend, so we had to make a trip there. We got all of this for $10.65, and they weren't even tripling $1 coupons this time. That definitely topped my Memorial Day triple coupon shopping. It was fun having Nathan with me to help me decide what to buy and to watch my couponing skills in action. He said I "kicked some serious tail."

(An old photo. It wasn't that cold Monday.)

While we spent a lot of Monday relaxing, we were very active for some of the day. We started out the day by taking Nenya on a two and a half mile walk, and later Nathan and I biked another 11 miles. Not bad for two people who have hardly exercised at all the past year!

It wasn't anything too exciting, but we have so many weekends with planned events or traveling out of town that it's nice to just stay at home sometimes!

10 Small Ways I'm Cutting Costs

Now that we're currently living on just my income, we need to identify areas where we can cut back on our spending. It's a great opportunity to refocus on what necessities really are and how we can save money on those things we do have to buy.

These are a few small actions I've taken (or plan on taking) to help us live on as little as possible. Even if this season of one income is very short, some of these changes will hopefully become permanent and help us reach our financial goals.

1. Not getting my hair cut

This may sound extreme to some, but for me it was an easy decision to make. I've only been getting regular haircuts for the past year, so going without one for a while won't bother me. Of course I'm hoping Nathan will find a new job before I'm due for a haircut anyway.

2. Stepping up my couponing game.

I have no desire to look through recycle bins for coupons, but I need to make better use of the ones I have. I've gotten a little lazy lately and let some good ones expire.

3. Buying cheaper razors

I'm normally not a brand loyal person, but I've been using Schick Quatro razors for years. I decided to switch to two-blade razors that were 75% cheaper. This has turned out to be a painful decision (literally), but I think I can handle it for a while.

4. Only grocery shopping every two weeks

It's too early to know if this change will actually save us money, but I think it will. If nothing else, I'll be spending less time shopping and less money on gas than I was when I shopped once a week.

5. Temporarily stopping HSA contributions

Right now, part of each of my paychecks goes directly into our Health Savings Account. If the unemployment continues for another month or so, I'll stop making that contribution. We already have enough money between out HSA and emergency fund to cover our out of pocket maximum.

6. Only buying 1% milk

For a year I've been buying skim for me and 1% for Nathan. I finally decided that I'm not going to become obese from drinking 1% milk, so I've stopped buying skim. With the two of us sharing one gallon, we're much less likely to waste any because it's gone bad. The extra refrigerator space is a nice bonus too.

7. Severely limited eating out

I know some people seem to think you should never eat out, but it's nice to be able to go out for dinner as a couple or have lunch with coworkers at least a couple times a month. I don't think we'll be able to completely give it up, but we're going to have a very small number in this budget category. Thankfully, I have several unused Groupons we can use for a date.

8. Not buying new makeup

I've run out of both my foundation and mineral veil, so I'm looking very natural right now.

9. Shopping for a lower car and renter's insurance.

We're spending a huge chunk of our income on insurance. The company Nathan chose several years ago had the best rate at the time, but now that he's added another driver, a second car, and renter's insurance to his policy, it's time to look again.

10. Deleting all daily deal e-mails immediately

Groupons are great for saving money on restaurants, entertainment, and even clothing, but when you don't have a budget for these categories, it's brutal looking at all the deals you have to pass up. Heartsy was really rough. It's better to just delete the e-mails before I can read what they're offering.


What small or big changes have you made to save money?


More Top Ten Tuesday from Oh Amanda.
More Frugal Friday on Life as Mom.

Meeting Money Saving Mom

Last night I got to meet one of my favorite bloggers: Crystal Paine, the Money Saving Mom!

Crystal in the light green shirt under the Starbucks sign, me in the blue shirt in front,

other awesome ladies all around whom I will not try to name. (Photo from Money Saving Mom)

Crystal was in town for a conference with a friend, so eight of her local blog readers got together for an informal meet-up. I've been reading Money Saving Mom for about a year now, so this was exciting for me. Thanks mostly to tips I've learned from Crystal's blog, the amount I spend on groceries for Nathan and myself each month is the same as I spent for just me when I was single. And she has over 134,000 Facebook fans, so she's kind of a big deal. Some of the women drove over an hour just to have coffee with her!

After meeting Crystal in person, it's clear that she doesn't think of herself as a big deal. She greeted all of us with a hug and was happy to meet us. She seems to genuinely enjoy helping and educating others, without even the tiniest bit of a know-it-all attitude. 

It was great meeting all these wonderful women and chatting about our frugal adventures. I found out I'm definitely not the only one lamenting that we don't have a Rite-Aid around here to take advantage of their great deals, despite the fact that we have about every other store! I was the only non-mom in the group, so I got to hear what shopping and couponing with kids is like. It was a lot of fun and I wish we'd had more time together.

Have you ever met any of your favorite bloggers/celebrities in person? Who would you most like to meet?

For Richer. For Poorer.

This past weekend, my longtime dream of riding a zip line finally came true! It wasn't a huge one, but it was a good starter zip line. Once we finished our adventure, Nathan broke the news to me that he no longer had a job. He wanted me to have my fun that day, but he couldn't put off telling me any longer.

For richer or poorer.

Those words are spoken in traditional wedding vows for a reason; both are very real possibilities in a marriage. When I made that vow at my own wedding, I started crying as I thought of everything we'd already been through and knew we could make it through anything. Sure enough, when Nathan lost his job after just a few weeks of marriage, we survived the poorer for a time. But then he got this new job, with great pay, and I thought everything would be better. Poorer? That was all behind us! And now, here we are, back to just my income. Although I hope this will once again be such a short period of unemployment that we'll hardly notice it, we have no way of knowing.

Marriage is kind of like a zip lining. Even though I'd looked forward to it for a very long time, I didn't know what it would be like when I jumped off that platform. Sometimes it seems like an easy ride, but sometimes you start spinning out of control. You just have to have faith that the cord holding you up is strong enough that you won't fall into the pond.  It's a crazy ride, but I wouldn't want to do it with anyone else.

I know we'll be okay. Living on my income is certainly possible, just not a lot of fun. I'm so thankful that we fully funded our emergency fund and paid off all consumer debt during our first year of marriage. If you have not yet done both of those things, I would truly encourage you to do so as soon as you possibly can. Although you may think everything is great now that you're richer, you never know when Poorer could come to visit.

The Triple Coupon Experience

Doubling coupons up to $0.50 is nice, but what about tripling coupons up to $1? That's what Marsh was doing over Memorial Day weekend. It actually took me awhile to decide to go since Marsh's standard prices and even sale prices are fairly high. I'd only been there once in the past year, and I wasn't sure that I could get good enough deals even with triple coupons. The deal that ultimately got me in the door was the Era detergent - on sale for $2.99, and I had a coupon for $1 off! I couldn't pass up free detergent.

Here's what I ended up buying, and the prices I paid after the coupon:

• Popcorn, Indiana Popcorn — $0.99
• Popcorn, Indiana Chips — $0.99 
• Era detergent — FREE 
• Uncle Ben's Ready Rice — $0.14
• Hormel pepperoni — $0.94
• Kraft mayo — $1.49 each
• Heinz ketchup — $0.39
• Yoplait yogurt — $1.45
• Classico alfredo sauce — $0.50 each
• Dole fruit crisp — $0.99
• General Mills Milk 'n Cereal Bars — $0.49
• Covergirl mascara — $2.99 (Is that even a good price? I never replace my mascara until it's basically solidified.)
• Kraft sliced cheese — FREE

Before I went shopping, I set a few guidelines for myself. I didn't follow them perfectly, but they kept me from getting too crazy.

1. Only buy items with matching coupons. I had no trouble following this one. I went to a quiet aisle before checking out and actually placed the coupons I was using on the items to make sure I had them all ready.
2. Spend less than $1 on items we wouldn't normally buy. Well, we wouldn't normally buy white cheddar popcorn or chips, but since Nathan and I both LOVE white cheddar popcorn, I couldn't resist.
3. Spend less than $10 total. My final total was $13.33. I could have put a few things back to bring that total down, but I was really excited about everything I was getting, as I knew would be the danger.

I was hoping for more free or nearly free items, but several of the items I had $1 off coupons for (Endust and Heinz 57, for example) weren't anywhere in the store. I may have had better luck at a bigger Marsh.

So, while this wasn't exactly an "extreme" couponing experience, I was pretty happy with my 77% savings and had a lot of fun doing it.

What We've Learned About Budgeting

At the beginning of this year, I wrote about the brilliant idea Nathan had to base our budget not on the 12 calendar months but on 13 four-week periods so that our income for each period would be about the same. Now that we're nearing the end of the fifth period, I'm still happy with this system, but it hasn't worked quite the way we thought it would. We've learned a lot about budgeting during these 20 weeks.

Income is never steady
This graph shows what our income has looked like the last five periods. Not so steady, is it? Just to clarify, the markers for the third and fifth period are the "normal" months. It has actually been higher than normal income we've been dealing with, which is a very good issue to have.

Why the high months? 

• Working on corporate holidays in December meant extra income for Nathan in January.
• Tuition reimbursement from Nathan's employer came in February.
• We received a tax refund in April.

Budgeting requires flexibility
The problem we had last year was that we thought of our budget as this rigid guideline that could not be changed in the middle of the month. But guess what? Life isn't predictable! In addition to the unexpected extra income, we've also had some unexpected expenses. You don't know at the beginning of the month that in two weeks you'll need car repairs. You don't know that you'll end up losing the key fob for the laundry room and have to pay $50 to replace it (or that you'll find it later and not be able to get any money back). And really, who can predict how much they'll spend on gas anymore?

Now, when we set our budget before the beginning of each period, we set our amounts for each category based on our normal earned income. If we end up bringing in more money than expected, we then tweak the overall budgeted amount and the amounts for each category. For example, if we expected to make $2,000 during a period and Nathan gets a paycheck with $50 extra overtime pay, we might add $40 to the budgeted amount for the emergency fund and $10 to the amount we budget for miscellaneous spending. Our total budgeted would then be $2,050. And likewise, if an expense comes up that was not originally in the budget, we'll have to lower a few categories to make up for it.

Budgeting requires communication
Extra income is a blessing, but it makes having a budget even more important. If Nathan and I hadn't decided ahead of time how we were going to use our tax refund, we could have ended up going crazy with our spending for that month. Having a budget meeting at the beginning of each period is a starting point, but being in financial harmony with your spouse requires constant communication. We don't consult each other about every purchase we make, but it's nice to know when Nathan plans to spend $100 on computer parts.

Budgeting takes a lot of time to get it right

If you've been using a budget for a long time, it might sound like I'm stating the obvious in this post, but it was incredibly frustrating for us those first few months. We still haven't perfected it, and I don't know that we ever will. If you're just starting out with creating and using a budget, don't give up!


 Do you use a budget? What are your tips for making it work?

Playing the Drugstore Game

I've shared before how I've been able to find deals on groceries and clothes, but saving money on household and personal items is where I struggle. I don't think about buying toothpaste or toilet paper until we're almost out. Even though I had heard how a lot of people manage to get some really good deals at drugstores and even make money, it still just seemed like a waste of time to go to extra stores. However, when I finally saw some deals on products that we actually use, I went for it.

Week One: Earning Rewards

Skintimate shave gel (CVS): $3.18 after coupons, got $2.50 Extra Bucks

Speed Stick deodorant (Walgreen's): $1.30 after coupons, got $1 Register Rewards

Snickers eggs (Walgreen's): $0.54

I thought I could get the eggs for free at Walgreen's, but the coupon was rejected. The cashier already seemed annoyed with my existence since I had given her a special Walgreen's discount coupon after she had rung up my items and "That's supposed to be scanned first!" and had to get a manager. I decided to just buy them.

Total spent: $5.02
Total rewards earned: 3.50

Week Two: Using the Rewards 

For my second trip, I was able to use my Extra Bucks and Register Rewards to get even better deals.

Sinus medicine (CVS): $3.70 after using my $2.50 Extra Bucks. I was more concerned about getting relief from my congestion than getting fantastic deals!

Aussie hair spray and mousse (Walgreen's): $5.49 for both after coupons and Register Rewards and got $3 Register Rewards back. 

Total spent: $9.19
Total rewards earned: $3

I had the same cashier at Walgreen's, and once again my coupon was rejected. "This says Herbal Essences. You bought Aussie" was her explanation. Except that it says OR AUSSIE right after the Herbal Essences and even has a picture of the purple bottles right on the coupon! But once I pointed that out, she actually got the coupon to work for me. After two trips to Walgreen's and two rejected coupons, I'm beginning to see why many people have just given up shopping there.

 Week Three: Making Money

For my third trip to CVS, even without any Extra Bucks to spend, I was able to make money! The Honest Tea was on sale 3/$4, and you earn $1 Extra Bucks by buying 3. With three $1/1 Honest Tea coupons and a CVS coupon for a free beverage that took $2 off, I was able to get four drinks for $0.84 and earned $1 in Extra Bucks. We're basically getting paid $0.04 to drink each of them. 

Total spent: $0.84

Total rewards earned: $1

So, yes, drugstore shopping can be a hassle, but I think if I stick with it long enough I can drastically reduce the amount we spend on household items. And getting paid to drink tea and Dr. Pepper? You can't beat that.

Is Paying for Coupons Worth the Money?

Buying a newspaper just for coupons, buying a book of coupons...is it worth it? I debated this for a long time. I can't speak for everyone, but this is what I've concluded.

Newspapers
A Sunday paper around here costs $1.75. If I can only use $2 worth of coupons from it, that's hardly worth the time it takes to clip them out. But one day I picked up a Sunday paper and saw a little paper inside with an online code to get a one-year Sunday/Thursday subscription for 99 cents a week. At that price, I thought it would be worth it.

Nathan's opinion? He was excited about getting the funnies. 

I haven't added up exactly how much we've saved a week with our paper subscription, but I know we get more than our money's worth without even trying. There are many bonuses in addition to the coupons. I have a physical copy of the weekly ads for Kroger, Meijer, and all the other local stores, which we wouldn't receive otherwise. There are restaurant coupons packed in there as well. And you can't put a price on how engrossed in the comics Nathan becomes every time we get a new paper. It's just hilarious.

The Entertainment Book

I was also worried about getting our money's worth out of the Entertainment Book, even though two of the books I've read this year recommend it. Sure it has thousands of dollars in coupons, but how many would we actually use? What finally made me decide to buy one was an offer from MyPoints to earn 1,700 points with the purchase of an Entertainment Book. I paid $17 and earned more than enough points for a $10 gift card. I knew we would save at least $7 with the coupons. 
 

And then I bought a bike...

The Entertainment Book has 3 coupons for Dick's Sporting Goods: $20 off $100, $15 off $75, and $10 off $50. When we bought a bike, 2 helmets, and a bike lock, the cashier let us use all 3 coupons on one transaction. We saved $45 on one purchase! No matter how many more coupons we use out of that book this year, it's already been worth it.

Is buying coupons worth the money? Depending on how much you pay for them, yes, it definitely can be!


Do you ever spend money to get coupons?

Cut Your Grocery Bill in Half

 
I wasn't sure what to expect from Cut Your Grocery Bill in Half with America's Cheapest Family. I don't feel like our monthly grocery budget can get any lower than it is without making some major sacrifices. And authors Steve and Annette Economides (yes, their real name) only go grocery shopping once a month, which is not something I'm willing to attempt at this point. As it turned out, I learned much more from this book than I expected. I skimmed through the chapter on stocking up and organizing since I don't really have enough space for 20 cans of tomato paste right now, but even that chapter got me thinking about how I could store and organize food.

Here are some examples of tips from the book that I liked:

• Keep your impulse buys in a separate hand basket in your grocery cart. Before you check out, decide if you really need the items in the basket.
• Use a calendar to track grocery store sales with dates
• Buy medium eggs if there is more than a 5 cent difference between medium and large eggs
• Swish water in a nearly empty jam jar and empty it into a smoothie or pancake batter

If you're at all interested in saving money on food expenses, even if you think you already know a lot, read this book. You will learn something.

Other Books Read in 2011

• Eat, Pray, Love
• Healthy Meals for Less (Review)
• Half-Price Living (Review)
• Linchpin (Review) 
• To Buy or Not to Buy Organic (Review)
• Mosaic

Vacuuming The Car from a Second Story Apartment

Nathan is the official family vacuumer. He was apparently hit with a bit of spring cleaning fever this past weekend and decided he was going to vacuum out both cars in addition to the apartment. I didn't really think about the fact that he would have to find a way to plug in the vacuum in order to do this. Not finding any outdoor outlets, he resorted to this:

A chain of power strips running from the closest outlet to the hallway...

All the way down the stairs...

And outside to the sidewalk! Unfortunately, the cord still wasn't long enough for the vacuum to reach the entire car.

So then he found an outlet in the laundry room.

Success!

You may be wondering, why didn't we just go to a gas station and use a coin-operated vacuum? Well, while I tend to be the frugal one, there are some things that Nathan just doesn't like to spend money on. (He thinks clothes at Goodwill are too expensive.) Why pay to use a vacuum when you already own a perfectly good one?

What crazy things have you done in the name of saving money?

Baby Step 2, Phase 1: Complete!

Our debt snowball has rolled all the way down the hill! Baby step 2 in Dave Ramsey's plan is to pay off all debt except your mortgage. Since we don't currently have a mortgage, we've modified Dave's plan a bit. After putting $1,000 in our emergency fund, we paid off all debt except student loans for Nathan's graduate school. Over the past eight months, all of my take-home pay and then some has gone towards paying off debt. While we can't officially say that we're debt free, it's still a nice feeling to not have any credit card payments, car payments, or any other debts.

Putting our final payment in the mail

How We Did It

For the most part, we avoided lifestyle inflation after Nathan started a better paying job. When he first called to tell me the news, I was so excited about how much money we would have that I went to Panera for a $12 lunch that day. But I haven't done that since then. Our way of living hasn't really changed all that much. We live in the same apartment, drive the same cars, and wear pretty much the same clothes. We've made a few splurges, but we budgeted for them. I'm a tightwad by nature, and I've managed to reign in Nathan a little.

The Next Step

Over the next three months, we'll be putting the same amount of money we have been using to pay off debt into our emergency fund. Since it will take us quite a while to pay off the graduate school loans, we didn't want to pay off those with the same intensity without having an emergency fund of 3 to 6 months' expenses (Baby Step 3). Our emergency fund is in a special type of bank account. Unlike our standard savings account, from which I can transfer funds with just a few mouse clicks, we must actually visit a branch or call the 800 number to withdraw money from our emergency fund. We also have a Health Savings Account that we can use for any medical expenses, but we want to have 3 to 6 months' expenses saved in addition to the money in our HSA.

After Our First Anniversary

Starting in July, assuming all goes well, we want to start setting aside money for two purposes: paying off the student loans and saving up a 20-25% down payment for a house. It's hard to say how long this will take - our income could go up or down, we could have another mouth to feed - but we'll still be paying off student loans a lot faster than most people, and we're in no hurry to buy a house when Nathan has only been at his job for 7 months. I'm just thrilled that we've already made it this far on our road to financial peace.

For those of you who have gone through Financial Peace University or are familiar with Dave's teachings, have you followed his steps in order or switched things around a bit?

That's Not Good Enough!

Week 8 in Financial Peace University, which is all about finding good deals, is titled "That's not Good Enough!" It's funny how as you find better and better deals, what you consider to be a good enough price becomes lower and lower. $10 for a pair of jeans? Not bad, but after the deals we found this weekend, I'm not sure that will be good enough anymore.

 

We got this dress shirt, sweater, and jeans all for less than $5! 

Here's how:

Jeans (from Target)
Original Price: $24.99
Sale price: $6.24
Used a Target printable coupon for $5 off women's denim item
Final cost for jeans: $1.24


Then Nathan and I went to Kohl's as part of our date night (what a good husband!).
Dress Shirt
Original price: $38.00
Sale price: $7.60

Sweater
Original price: $30.00
Sale price: $6.00

Used postcard I received in the mail for $10 off any purchase
Received an extra 15% off
Final cost for dress shirt and sweater: $3.06


$93 worth of clothes for $4.30...That's good enough for me. I know opportunities like this might not happen very often, but just knowing that they happen at all is very exciting!