Filed under: Budgeting, Empty Pantry Challenge, Groceries, Saving, Traveling
The month is half gone and I’m halfway through my challenge of spending $0 on food or drinks for the duration. And, oh lordy, have I been whining about it!
It’s not because I’m hungry (don’t say starving unless you want to debate hunger versus starvation with me) or deprived or even out of options. I have a variety of meals and still more in the pantry.
I’m just spoiled. I want more variety. I want what I want when I want it without any worry of the cost.
Basically, I’m a huge whiner.
Luckily most of this whining goes on in my head otherwise I’m sure someone would have strangled me by now.
While driving to and from the Bay Area this weekend I passed approximately 2,000 In & Out Burgers. Actually one just said “Out” because the sign was broken. Hmmmmm burgers. Hmmmm fries. Both things I suck at making on my own at home. Plus me and hot oil is not a good combo. Not a safe combo.
Instead I pulled out my little travel ice chest and had a pb&j. Have I mentioned the pb&j project? I don’t think so… Oh well, another post for another day. This challenge has meant a few subtle changes to my routine. First is that I immediately throw away all grocery store circular ads. Without reading them. I can’t delude myself into thinking I can go into one and buy shampoo on sale. Ohhh no. In fact the one time I did go in (to cash in coins) I was staring at the floor the entire time. Why, oh why, is the candy display next to the CoinStar?!?
So I don’t look at ads. I also don’t plan my menus. I know, this is counter intuitive to the project but I do feel I need a bit of freedom. Otherwise I rebel, if only against myself. It’s been pretty cold here in California so I’m drinking more hot tea at home and coffee at work. I swear everytime I pass Dutch Brothers coffee the employees there are giving me sad eyes. I miss their brand of caffeinated crack…
Instead of thinking what restaurant sounds good, where I should pick up a taco (yes the voices are still screaming for tacos), I think about the options I have at home. Should I have the leftover lasagna or make a burrito? Lemon chicken or a salad? Lemon chicken on a salad? Once I start focusing on what I have, not what I cannot have, my mood improves.
I’m also a crafty little scavenger. I remind myself of the squirrel from the Ice Age movies. Cute little guy, a little obsessive. I took home the Thanksgiving ham from work. My grandparents gave me persimmons which I have no idea what to do with and my parents gave me lemons and avacados.
Sidebar: if you have persimmon recipes, particularly those involving cookies, send ‘em my way!
I cleaned. I know, not a huge surprise but I did empty the fridge, wipe it down and restock. Threw out some stinky food. Used up some other food. Overall tried to be a better cook and consumer. Next week I hope to tackle the freezers and then the pantry. Oy. The pantry.
Finally, I am so thankful for two ungrumpy old men who enabled me to eat out this weekend without spending. Although I left a clause in the challenge that last weekend would not count since I was on the road both my Grandpa and Old Man Adam were kind enough to pay. I did have a great time visiting with everyone, drinking, playing games, drinking, losing games (badly too), drinking and sleeping in. If I ever get two more days off in a row I’ll have to consider coming down again.
But for now I’m working on bootcamp homework and eating dinner at home.
This is a continuation of my previous post New House, New Debts? which talks about how I could have justified over $15,000 in new debt after buying a new house last November. I’m planning one more piece about savings but for now here’s the initial justification to spend and what I actually did.
*Repairs – water damage to the drywall resulted in tearing out 2 sections of wall in my living room. Let’s just say it was a long, cold winter. I could have hired a contractor to repair it asap. These repairs would have cost approximately $2,500 with a contractor.
Well, the first thing I did to improve the house was repairs to the flooring and drywall to get it back into the shape that I saw when I purchased it. My dad came up and helped me tear out the soaked carpet and carpet pad. Then we used a saw to take out the drywall. First we took out 2 feet but seeing how soaked the insulation was, we ultimately took out 4 feet high, about 20 feet in length.
lots of damage
Since I bought a duplex we got a lesson on how common walls are assembled. It goes drywall, framing (with insulation), drywall, drywall, framing (with insulation), drywall. In order to replace the two inner layers of drywall we’d have to do major reconstruction on a load bearing wall. We spoke with the owner of the other property and their contractor and decided on a middle ground. We both dried our side of the walls, bleached the framing and interior drywall and painted the entire area with Kilz primer.
I’d already purchased Kilz for paint priming so there was no out of pocket cost there and the industrial dryer was loaned to us from my mom’s cousin who owns a rental company. The only cost for the repairs was the cost of the drywall and insulation.
Of course the drywall had to be textured to match the rest of the wall. My dad mudded and taped the joints and screws but we got a professional to texture it. Here I agreed to do business marketing consulting in exchange for the texturing work.
Lessons Learned: borrow when you can and keep in contact with family. Do the work yourself and learn a new skill. Trade or barter services to keep costs down.
*Carpet – when I moved in the house was flooded (long story) and I could have plunked down the CC or opened a new one to finance the $900 it cost me to carpet ONE room.
While I wasn’t very happy with no living room carpet for Thanksgiving, Christmas and New Year’s I also was extremely pleased not to be paying on a credit card during these times. A new house is always more expensive then you expect it to be. In January the title paperwork finally came in and when looking over the documents I found two checks. One was $1,000 discount because we made a full price offer (beating out other bidders who went low) and the other was about $400 back because we estimated taxes too high.
The money went straight into our mortgage account and I got the green light to shop for carpet. I took home samples and matched the carpet to the linoleum in the kitchen and hallway. I put down half as a deposit and paid the remainder once it was installed using a local company.
New Carpet installed
Lessons Learned: don’t forget about money owed to you, shop locally
*Flooring – and next to the new carpet, the rest of my floors would have looked terrible. I could have replaced the bathroom tiling and put in the wood floors in all three bedrooms to the tune of $2,000
I am still waiting on the floors. I knew from the beginning that this is a 5 year house for me. It’s a good investment and something fun where I can decorate and paint and experiment with what I like and what I don’t. So while I am interested in improving certain aspects of the house I am certainly not going to be putting in top of the line anything. For now I need to measure the rooms where I would like to put in hardwood floors (office, master bedroom, guest bedroom, hallway, kitchen/dining nook) and then the rooms that could use new tiles (both bathrooms). I think it would be cute to make part of the garage a laundry “room” with tiles and paint but that’s a ways off. When I do hardwood floors I’ll get a lot of input from my dad who will be the one helping me install them.
But first I need to save up a lot of money.
Lessons Learned: research first, purchase later; know what you want and what you don’t and when to buy the best
*Furniture – my living room is brown. My couch is purple. I had no dining table or chairs, no bed frame, dresser or bookshelves for the guest room. Approximate costs:
Couch: $800
I still dislike my couch color but I’ve started to see the beauty in recovering the thing instead of replacing it. My parents bought the couch when I was in high school, it’s Ethan Allen and thus great quality, and it has held together well. All I dislike is the color. So I’m shopping for a nice cover that I can alter and complementary fabric for the back pillows.
Dining Set: $700
My dining table was around $140 if I remember correctly and purchased at a going out of business sale. Too bad furniture places don’t have those more often! I picked up two bar stools for my bar table for $30 and those moved to my kitchen bar area when I got six matching chairs from Bed Bath & Beyond with money from my furniture account.
a dining place
Bed Frame: $450
While I purchased a new mattress and box springs after moving in ($400 for the set), I still don’t have a good frame. My dad, sales shopper extraordinaire, found me a queen metal frame FREE and that’s been just fine. I am still looking for what I want and hope to buy it with savings in 2010.
Dresser: $275
I really like the Ikea catalog. It’s more of an obsession, actually. And their dressers are very nice if not less than sturdy. So I picked out one that didn’t take too much floor room and would complement my future bedroom furniture. Then I found it on clearance already assembled and my aunt drove over with her SUV to help me haul it. I was able to transfer the money from my online furniture savings and it was done.
New Dresser
Bookshelves: $500
I recently purchased my idea book shelving system. I made sure the units could be disassembled and thus fit into any room in any house I buy. I love the look and especially the price. All of those for under $500.
new bookshelves
Lessons Learned: it’s okay to buy one piece at a time or change the original plan but when you want a cohesive set, save up and buy it at once.
*Television – the one I moved into the house was small, the sound was going out and it was old. Cost of a new 32″ tv was around $600.
The funny part about shopping for a new TV was how many people told me it was a necessity and hurting my way of life. I survived. In fact, by waiting until I had enough cash to start shopping I came across an amazing deal and got a great TV about 30% off the regular retail price.
My $400 TV
Lessons Learned: be patient and you might just find a great deal
*Landscaping – the house needs serious landscape work, I could easily justify new front and back lawns, remove 2 trees, shape and cut back 18 rosebushes, revamp the side yard, plant new flowering bushes and plant 3 new trees. Conservative estimate (with labor) comes to nearly $4,000.
Just this week I wrote a check for the first phase of landscaping: replacing the backyard sod. Before the work started we adjusted the sprinkler system and clarified exactly what we wanted.
root of the problem
These roots from a neighboring tree had to be taken out; there were jutting out above ground and would only get worse when the heavy watering began, possibly dangering our foundation. The landscaper I hired cut out the roots, graded the area, tweaked the sprinklers, rototilled the soil, added top soil and installed the sod for a great price. We paid in full out of savings.
the backyard sod
I am continuing to learn how to prune the rosebushes and plan to start cleaning up the sideyard and plant some bushes in the spring. Until then I keep it cleaned up and let the dogs play on the sideyard.
Lessons Learned: Pay a professional when it will save significant time and money, start with what will make the biggest impact and slowly assemble the rest.
*Appliances – the dishwasher is broken, the fridge/freezer combo was used, the washer and dryer don’t always work perfectly. To upgrade these appliances I could have spent:
Dishwasher: $350
The dishwasher doesn’t bother me much, most of the time I just let things soak in the large sink until I do a batch of dishes. My dad is planning on looking at the dishwasher on his next trip so we will find out if it can be easily repaired or if it should be replaced. If it needs to be replaced the scratch and dent store is the first place I’ll look.
New Fridge/freezer: $900
Again, this is low on the priority list because the one I got for $40 at a garage sale works just fine. Sure it’s a little broken in but it’s still working. I hope to get five years out of this machine and then possibly leave it with the house when I move or rent it out.
Washer & Dryer set: $1,500
This is probably the only place I wish I had bought something better. As it is, I found this set on Freecycle and didn’t pay a penny. The dryer doesn’t always work on every cycle and the seal to the washer is weak. I am planning on getting them both serviced next year to find out if there are easy fixes or if I should budget for a new set. And then I won’t buy a set, probably find something comparable used at the scratch and dent store. Until then the washer works good enough and the rod my dad installed works for drying.
free isn't always the best
Lessons Learned: make do with what you have and don’t complain. Someone else would be happy to have what you do.
*Chest Freezer – buying a chest freezer enables a homeowner to freeze meals, buy in bulk and cut the grocery bill. The local appliance store has these available for financing $350 for the large one I was pricing.
I think I could have filled a larger chest freezer but as it is the smaller one I bought is working just fine. I spent $99 out of my furniture fund in July and it works great. The more I freeze and learn to bulk shop the more I will consider upgrading. Until then this one is great.
New Chest Freezer
Lessons Learned: Start with the basics and work your way up, you may never need the biggest and the best.
*Grill – what’s more American homeowner than grilling? One of these is necessary, right? A new grill would have set me back at least $250.
As much as I like grilled food, I don’t often cook meat. And though I’ve used my grill for fish it’s expensive so I don’t get it often. This grill was a gift from my grandparents when they upgraded their grill this summer.
a free gas grill
Lessons Learned: Graciously accept gifts and share your appreciation with the giver. Don’t invest in something you won’t use enough to justify.
*Lawnmower and tools – Gotta keep that newly landscaped lawn mowed and if I don’t hire it out I’ll need a lawnmower, string trimmer and other assorted tools. Minimum cost is probably $500
Again, my wonderful grandparents decided to upgrade their electric mower (Grandma is 88 and still mowing half an acre!) and I got the used model. I am extremely thankful for their generosity since they could have sold this at a garage sale. I have picked up the shovels and hand tools and asked my dad to look out for a string trimmer at garage sales for me.
Lessons Learned: let others know what you need and be thankful for their help. Be patient and wait for the right item at the right time at the right price.
The other things I am slowly improving include:
The broken garage door- credit goes to my dad who ordered a new motor and repaired the door as a birthday present. Hard to wrap but saves me a ton of time unloading groceries!
The older furnace – I’ll make an appointment in a few weeks to have my system checked out by a local company I trust. I would like to have it serviced (oiled and such) before winter hits hard and find out if it’s working well enough. If not, estimated replacement costs so I can start a savings account.
New gutters – besides getting clogged up with leaves, a portion of my gutters are rusting which means the siding of my house is orange from the water hitting the rust and then my paint. I can’t paint the exterior without fixing the gutters first. I’d like a quote on getting the gutters replaced along with new downspouts. Probably next year before I can save up though.
Painting the exterior – really it’s in good shape. Before we bought the house some of the overhang was replaced and a few boards here and there. Those parts were not painted. I might get those primed next spring just to protect the wood from damage but a full house painting (I’d do it myself) is a few years off.
Outdoor furniture – I’m really not spending a ton of time outdoors yet. I do need to finish adding plants to the backyard and possibly yank a tree before I decide to invest in furniture. Even then I’ll shop end of season sales in the fall. Until then I have the porch swing that my grandparents used for years
family seating available
Garage storage – here I’ve been extremely lucky. My dad built my amazing pantry and put up these shelves. Another set of shelves I got from my grandparents’ estate and the rest I’ve bought slowly over the years. And while I may not have the ideal storage for laundry stuff, it was cheap!
birthday storage
custom pantry
Faucets – It’ll be awhile before I replace my faucets in the bathrooms and kitchen, mostly because $100 or more for a faucet is kinda ridiculous to me. But it’ll get done eventually, maybe when I replace the bathroom floors.
Toilets – my city had a toilet replacement rebate recently but the funds have all been disbursed now. I’m going to keep on the lookout for sales of the low-flow quality model I want and wait to see if another round of rebates is approved.
Curtains – I’m about half done with curtains. I have nice ones in the living room and master bedroom but don’t know where to look for the office and guest room. I like funky and unique patterns that are classic and age well. I’m picky, in other words.
Master Bedroom curtains
Paint- I’ve been using a paint-by-the-room plan where I only buy what I need when the room is ready. This saves money because the paint doesn’t go bad and yes, paint does go bad and it encourages me to get the rooms prepped so I can buy paint. I love paint samples. The cost per room is about $40 depending on how many coats I need. My guest room was the best, one can of primer $19 and one of blue paint $21. The white comes from one can I bought a few months ago for all my trim.
Ceiling fans – two of the three bedrooms already had fans. The office fan was purchased on sale for under $70 and my dad installed it this summer. I would like to add a ceiling fan and light to the dark living room and if I can’t match it to the one in the dining area replace both simultaneously. That project is a few years off.
ceiling fan in the office
Screens – at some point I would also like to replace the front door screen and all the windows. I have a roll of screening material in my garage but need the tool (rather cheap) and a weekend with my dad to learn how to use it.
If you can’t tell by now: my dad rocks! He’s saved me sooo much money on repairs to this house it’s crazy.
Lessons Learned: appreciate your dad and his skills. Know the strengths and weaknesses of the house and property and prioritize. Plan on spending some money to get estimates before an appliance fails completely. Regular maintenance is important to extending the life of an item. Rome wasn’t built in a day, neither is the perfect home.
This last year hasn’t been easy. Everywhere I turn there’s an offer of 0% financing for six months, great deals if you act NOW. And in many ways I’ve been hardwired to think that it’s okay to buy now, pay later. Delaying gratification isn’t always fun. Hell, the fun is delayed! But, it’s also much sweeter to bring home a piece of furniture and know that I own it. I don’t rent to own it, I don’t lease it, I won’t own it as soon as four easy payments of $49.99 are received and processed.
I own what I bring into my house. And I don’t own any extra debt because of it.
That’s the pride of being a homeowner, to me at least.
Part 3 is going to discuss how I have cut back some expenses (while keeping others) in order to save the money for these items and explore why I went about this route instead of taking out a loan or using a line of credit.
It’s been nearly a year since I moved into my new house and I’ve taken some time to consider how much I could be in debt right now had I not practiced a little delayed gratification. Okay… a lot of delayed gratification.
*Carpet – when I moved in the house was flooded (long story) and I could have plunked down the CC or opened a new one to finance the $900 it cost me to carpet ONE room.
*Flooring – and next to the new carpet, the rest of my floors would have looked terrible. I could have replaced the bathroom tiling and put in the wood floors in all three bedrooms to the tune of $2,000
*Repairs – water damage to the drywall resulted in tearing out 2 sections of wall in my living room. Let’s just say it was a long, cold winter. I could have hired a contractor to repair it asap. These repairs would have cost approximately $2,500 with a contractor.
*Furniture – my living room is brown. My couch is purple. I had no dining table or chairs, no bed frame, dresser or bookshelves for the guest room. Approximate costs:
Dining Set: $700
Couch: $800
Bed Frame: $450
Dresser: $275
Bookshelves: $500
Total: 1,515
*Television – the one I moved into the house was small, the sound was going out and it was old. Cost of a new 32″ tv was around $600.
*Landscaping – the house needs serious landscape work, I could easily justify new front and back lawns, remove 2 trees, shape and cut back 18 rosebushes, revamp the side yard, plant new flowering bushes and plant 3 new trees. Conservative estimate (with labor) comes to nearly $4,000.
*Appliances – the dishwasher is broken, the fridge/freezer combo was used, the washer and dryer don’t always work perfectly. To upgrade these appliances I could have spent:
Dishwasher: $350
New Fridge/freezer: $900
Washer & Dryer set: $1,500
*Chest Freezer – buying a chest freezer enables a homeowner to freeze meals, buy in bulk and cut the grocery bill. The local appliance store has these available for financing $350 for the large one I was pricing.
*Grill – what’s more American homeowner than grilling? One of these is necessary, right? A new grill would have set me back at least $250
*Lawnmower and tools – Gotta keep that newly landscaped lawn mowed and if I don’t hire it out I’ll need a lawnmower, string trimmer and other assorted tools. Minimum cost is probably $500
When all was said and done I could have easily financed over $15,000 in home improvement projects. And it would not have been difficult. My AMEX and CapitalOne limits could handle most of it and I get offers in the mail every week. OR I could open up a HELOC and easily tap into the “equity” I didn’t yet have in my home.
But what would I have? A nice, furnished, beautiful home with nice landscaping and a pile of bills.
(and that’s without touching the garage door repairs, a new furnace, new gutters, painting the exterior, outdoor lawn furniture and garage storage. If I really wanted to scare you I’d also write down the costs for new faucets, replacement toilets, curtains, paint, ceiling fans and replacing the screens)
Early in the process of finding and making an offer on this house I said, very clearly, that I don’t want this house to be an excuse to dig myself into debt. For the past year I’ve held to that desire. In part 2 I’ll describe what I did buy, how I did it and the plans for the rest.
As much as I’d like to leave this post for another time it’s actually a great time for me to update my financial picture before everything changes. As a certified “numbers nerd” I find it extremely satisfying to know exactly what I owe and how much I’ve saved. Let’s start with the debts:
Mortgage, 30 year, 5.5% interest rate: $132,956.25
Student Loan 1, 10 year,2.48% interest rate: $1,532.24
Student Loan 2, 10 year, 2.48 % interest rate: $2,051.78
Medical Bill, no interest: $444.13
Total Debt: $136,984.40
Total Non-Mortgage Debt: $4,028.15
And the savings:
Local Bank: $500.10*
Credit Union: $500.08*
Mortgage Account: $2,537.00*
ING Savings Online: $2,531.28
Cash Savings: $250.00
Total Savings: $6,318.46
*Note: this is the balance of my savings accounts only, I don’t include checking accounts because they change daily and I have three of ‘em.
Not bad considering I’ve yet to receive a paycheck from my new job and am awaiting payment for 2 freelance jobs.
Now the big news:
I have finally settled on the car accident claim from May 2008 when I was hit by an 18-wheeler! While no amount of cash can take away the daily pain this money will enable me to reach a few of my goals.
First and foremost I will pay my chiropractor who has graciously refused payment until the claim was settled. $444.13 plus the cost of a flower display for helping me so very much on the settlement process.
Secondly, I’ll be making a payment to Sallie Mae to eliminate both my student loans. There’s a nifty tool for the 10 day payoff and once I receive the check I’ll arrange the electronic transfer.
At that point I’ll be non-mortgage debt free!
After those debts are paid I’m going to add a lot of money to my savings accounts. The balance of the settlement, in fact. I’ve been playing around with the numbers for months now and I have a pretty good idea where that money is going.
Let’s revisit my saving goals for 2009, the format is current amount saved/goal:
Emergency Related:
EF – Cash $250 / $500
EF – Bank $500.10 / $500
EF – Credit Union $500.08 / $500
EF- ING $228.64 / $13,500
EF – Pets $500 / $500
$15,000 will cover approximately one year of living expenses at my current costs. I keep this money split up between several accounts with the majority kept in the bank with the highest rate of return. My friend Brittney encouraged me to keep a decent amount in cash for those emergencies that necessitate going out of town now without stopping at the ATM. And my experience has taught me that surgery at the pet hospital can reach $600-700 each time. While $500 would cover the bulk of that, most months I can make up the extra from savings contributions. Starting in 2010 I am going to research pet insurance rates and put that amount into the Pet EF each month.
Short term goals:
Furniture – 2009 $661.66 / $1,100 (Spent so far: $633.00)
Car Maintenance – 2009 $503.96 / $2,000 (Spent so far: $367.00)
Vacation 2009 $1,000 / $1000
Gifts 2009 $103.30 / $500
Insurance Premium $100.33 / $500
Passport $200
The furniture goal was a little amorphous this year after I bought the house and began to remodel. So far the $633 has paid for a chest freezer, new dresser, bar style table and six bar stools.
furniture purchases
Medium Term Goals:
Furniture 2010 $1000
Gifts 2010 $750
Camera $500
Kitchen Dishes $400
Cell $200
Garden 2010 $200
Camping 2010 $250
Laptop $800
Vacation – 2010 $3,000
Long Term Goals:
Vacation – 2011 $1,500
Roth 2009 $40.13 / $5000
Roth 2010 $5,000
New car 2009 $25.08 / $2000
New car 2010 $2000
—-
So there you have it, my done with the 3rd quarter and can’t wait for the rest of 2009 savings updates! I am whole heartedly looking ahead to each week and month that I can put more money away!
My grandma worked as a cook and then manager of the local school district kitchens up until she retired. As such she was able to take the summers off to spend with her family and got many items very cheap or at cost. When she moved to Assisted Living we found a nearly full box of kitchen drying towels and the dozen or so I kept are still in use. She also had a two foot long rolling pin that doubled as a weapon!
One of my favorite childhood memories was to come to town to visit Grandma and Grandpa and play in the backyard for hours. We quickly learned that Grandma’s old chest freezer – which was probably 4 feet long and 2 feet wide – contained an unnatural amount of sweets. Grandma would buy whole fruit popsicles and stock up for the summer. Two of us kids could removed the 50 lb crowbar that held the lid shut and enjoy a popsicle in the 100* weather.
If I could find the company that made those popsicles I would sell my internal organs to buy it.
Anywho, since buying my first chest freezer this week I have filled it with the following:
- Otterpops
- Fudgesicles
- Fruit popsicles
- Sherbet
- Vanilla Ice Cream
I don’t usually have dessert, per se, but I’m hoping that a blue otterpop on a hot day will let me relive some of those frugal memories. Not to mention my four young cousins arrive from Texas in two days and the tradition must continue!
***
If you’ve been following my 99 days list, you know that I’ve already finished two items prior to buying this chest freezer:
10 Price chest freezers Garage – DONE June 3rd
15 Measure space for chest freezer Garage – DONE June 1st
Through my research I found I could expect to spend around $250 for a medium sized freezer and up to $450 for a large one. However, the more I mulled over this decision, it became apparent that as a single woman I don’t need a large or even medium sized freezer. For now, the smallest size will work just fine. Here’s my new freezer which was on sale at Target for just $140:
baby freezer
This is one case where planning and contemplating a decision clearly paid off. Not to mention I was uniquely lucky to have a good friend send me a message about this deal which I would not have found on my own!
Usually I come up with fanciful goals for myself to save thousands and thousands of dollars for some thing, don’t ask me what, and then life gets in the way. But in the last year posting on the Women In Red Savers thread on MSN has helped me focus on savings goals. While I directed the majority of my discretionary income toward paying off my car loan, I kept making savings goals.
Now that my car is paid in full I am spending more time figuring out just how much I can save every month and, more importantly, what I’m saving for.
I find that having a concrete goal is vital to making the commitment to putting aside money. Also this money needs to be accessible but not immediately. The solution for me was an online savings account through ING, several in fact.
But before I start saving for a replacement computer or vacation I needed to set up an Emergency Fund. The Emergency Fund is the foundation of any financial house as it ensures that you have options when you need to spend money you had not planned to spend. Last year I got a flat tire, was hit by a big rig, and had to move. Without an Emergency Fund the stress can be overwhelming. My blog buddy Nitza asked the following question:
what is your goal for your EF? Three months’ worth of expenses? Six? More?
My goal is to have one year of expenses accessible in case of a job loss or medical emergency. One major motivation in paying off my car was that my Emergency Fund requirements went WAY down. I was paying over $3,000/year on my car payments and eliminating that bill means a little less needs to be saved. This year’s goal was $15,000 for the Emergency Fund split up in 4 places:
- $500 Cash
- $500 Bank
- $500 Credit Union
- $13,500 ING Online
The reason for the split is simple: Cash is in case I need to get somewhere NOW and have no time to get to the bank for cash. I want money in both of my banks in case one account is compromised and the bulk in the account with the best interest rate (in this case ING). A full 12 month Emergency Fund is closer to $20,000 so that’s a long term goal.
Setting Categories
When it comes to deciding what to save for it’s really a personal decision. I want to save for retirement and big expenses as well as unexpected problems like a car problem or if my dogs get sick. In addition to the Emergency Fund I have I have the following accounts:
- Car Maintenance
- Computer Repair
- Furniture
- Gifts
- House Maintenance
- Insurance Premium
- New Car
- Pets
- Roth IRA
- Student Loan Payoff
- Vacations
Some of these accounts are revolving like the 6-month insurance premium, gifts and Roth IRA. Other accounts will be used and replenished as needed such as the car maintenance, computer repair, pets, house maintenance and furniture funds. The new car fund is a multi-year goal while the student loan payoff is in order to compile the money needed to pay off my loans – Sallie Mae makes it uber difficult to make larger payments. And finally the vacation fund here is for Las Vegas and Disneyland in October. Since I plan on spending very little money on my vacation I’ll roll the money over into 2010’s vacation destination (yet to be determined).
Setting Goals
It’s really easy to say you’re going to save $2,000 for this and $5,000 for that without knowing a) how much you need and b) how you’re going to save it. I’ll be the first to admit my savings goals are optimistic but I had 2 motivations. First is that I was able to anticipate the $7,500 first time home buyer’s tax “credit” and second is a car accident settlement that I’m expecting this summer for between $10,000 – $18,000.
Here are my goals:
| Name | Goal |
| Car Maintenance | 2000 |
| Computer/Laptop | 250 |
| EF – Cash | 500 |
| EF – Level 1 | 500 |
| EF – Level 2 | 500 |
| EF – Level 3 | 13500 |
| Furniture | 1100 |
| Gifts | 500 |
| House Maintenance | 1500 |
| Insurance Premium | 800 |
| New Car | 10000 |
| Pets | 500 |
| Roth IRA | 6500 |
| Student Loan Payoff | 3900 |
| Television | 430 |
| Vacations | 1000 |
Some the goals have been met such as the TV and others are in progress. I keep it updated though!
This past week a friend of the family died and since my Mom was out of the state on vacation I volunteered to attend one of the services and take flowers. Now it would be easy enough to order a bouqet from the florist or even a plant from the nursey. But it would also be expensive. So I created my own. Here’s what I did:
Picked out a sturdy square vase and flower foam:
basic supplies
A variety of cutting instruments:
beware of sharp edges
The knife was used to cut the foam, the shears to cut the stems and the scissors to cut off leaves.
And of course the flowers:
uncut flowers
The flowers came from Costco where the prices are surprisingly reasonable. I paid $15 for one bouquet and $9 for the other. Since our friend who passed was a woman and the base I had was pink I decided to go with pink and purple pastels. First up was to take out all that greenery and cut the stems. It’s advisable to cut the stems at an angle and submerge them immediately into water. I don’t know who figured this out as I asked the plants and they refused to respond. There are NO pictures of me trimming stems because me + camera + shears = ER visit. This is also a good time to pull out any flowers that are snapped in half or stems without blooms. Once the stems were cut I threw them into a trash can filled with water:
nice pot
Now that was so pretty I almost considered leaving it as is. Maybe the next time a friend of mine moves into a new house a new trash can + flowers will be a fun gift…
Instead I started to take out the blooms and put them into the water drenched foam. Most websites will tell you to put the open blooms in the middle, closed blooms along the outside. Yeah, I ignore that advice. After all, when the older ones start to shrivel it’s much less noticable if you trim them back from the sides, otherwise they’ll be a big hole in the middle of the arrangement. So I started with the pink ones:
work on the center first
I also vary the heights so that they will bloom and fill out the bouqet. After the pink flowers I added the carnations and purple ones (I’m terrible at names in case you can’t tell…)
filling it out
adding more blooms
Now that all the flowers are in I did a little rearranging, mostly turning flowers and making sure they were mostly visable. I decided it looked a little sparse so I added in some greenery, the baby’s breath and eucalyptus leaves. Here’s the finished product:
And there you go! A $25 bouquet that looked great next to the other arrangements, was fun and easy to put together and conveys just some of the sympathy for the family who lost a loved one. Showing people that you care doesn’t have to be expensive or complicated.
Since I’ve been working on the list and not on spending money I had time this weekend to sit down and pay bills. This is the mid-month status of my expenses:
June Budget
Mortgage $1100 PAID $1,100
Car/Life Insurance $140
Home Phone/Internet/Cable $100
Gas/Electric $50 PAID $38.86
Trash $60 PAID $72.07
Sewer/Water $75 PAID $59.94
Fuel $150
Dog Food $40 PAID $21.99
Food $100 SO FAR: $43.79
Medical $20 PAID $20
Clothes $75
Student Loan Payment $52
Savings – SM $300 TRANSFERRED $200
Savings – Car $25 TRANSFERRED $25
Savings – EF $50
Savings – Roth $50 TRANSFERRED $40
Total: $2387
Autodrafts for my Student Loan Payment and Insurance are coming up this month, as well as my Internet/Phone/Cable bill which also needs to be adjusted. I’ve yet to find any of the clothes I’m looking to buy and I think I’ve spent a grand total of $20 or less on gas, can’t find the receipt right now. I will be making a transfer to my EF but I also put $100 in for my Insurance costs. I’m already looking at the July budget and seeing where I can make adaptations. I just got the car registration for 2010 ($202!) and I’m looking to buy a lawn, dishwasher, dresser and possibly a bed frame. So much planning to do, so little time!
Without a doubt in today’s economy one of the scariest things that can happen is an unexpected job loss. Unless you’re in the upper levels of management you’re unlikely to know if money isn’t coming in quickly enough and just how bleak the prospects for clients may actually be.
Don’t beat yourself up.
The fact is that job losses happen to the best of us and we can’t always see them coming. With the uncertainty of this economy it’s best to imagine the worst and hope for the best. Even if you believe your job is secure I challenge you to read through this list of simple suggestions I’ve compiled about surviving a job loss. If this makes you uncomfortable because your debt is high, your savings are low or you just don’t know what you’d do if you lost a job tomorrow then stay tuned for my “Nuclear Meltdown June Budget” series.
Job Searching
Consider what you’re proficient at, what you’re naturally talented at doing and how you want to spend your time. Make this not just a list of skills like “proficient at Microsoft Excel” but a strength “I enjoy taking raw information and using Excel as a tool to provide readable reports to assist in managerial decision making.” Consider your preferences and make them known in a positive, productive manner. “I love the synergy of a team atmosphere but also can get a large volume of orders processed working alone with minimal supervision. When issues come up I like to know my manager is willing to answer my questions to assure the company is getting the best deal possible.”
Start networking with old co-workers and friends. This can be as simple as writing an email saying “I was updating my resume and thought about you when we worked on project X together. How are you doing? If you have time in the coming week I’d love to catch up with you over coffee!”
Join this site and create a great profile. Actively search out former co-workers and join networks. Keep it positive though, no one wants to hear about how your last boss was the biggest jerk in the known universe.
Google every possible version of your name (potential employers will) and manage any negative content that you find. Time to eliminate those photos on My Space from your bachelor party. Sorry.
Call temp agencies in town and in the next major city. Set up interviews and bring your resume. Show up interview ready as if you’re meeting the owner of the company. Temp agencies want to know you are ready to see their customers on very short notice.
Plan on performing lots of informational interviews and be prepared to ask for a working interview. This may be a day long test of how you handle phones if you’re in for a clerical position or reviewing a set of plans if you’re up for an engineering job. The longer you spend time with a company the better they’re going to get a feel for your personality. Ask lots of questions and always research the company beforehand. Even if there’s not a lot out there you make this a selling point in the interview. If you’re interviewing for a marketing position you may say “the city resources page didn’t have your company listed as a local resource for quality x; I’d love to work with your team to make that happen.”
Get the name and position of each person you meet during an interview. Write down the company address and get business cards. Within ONE DAY write each of the major interviewers to thank them for their time and the honest discussion of the position and your talents. Make sure you spell the company name right.
Contact former supervisors or teachers and ask for a personalized recommendation letter. DO NOT forget to send them a personal thank you note for their time.
Drop by your local colleges and check out their course schedules. Audit a class you want to learn something about and network with other student and the teachers. Develop a proposal for a class the college should offer that you would love to teach. Check out the flyers for inexpensive yoga classes, students who need tutors, $1 beer night and upcoming concerts. Walk around campus and enjoy the beautiful landscaping – it’s free.
Remember that a company doesn’t hire because you need the money or you’re too bored at home playing Donkey Kong in your pajamas. Show up with a good attitude and demonstrate how you’re going to save or earn the company money.
Bills
Sit down with all adults in your immediate family and decide what’s necessary to survive. Plan your budget around that.
Keep a positive attitude; it’s easy to get discouraged.
Review any upcoming bills or statements.
Decide what can be paid back over time (like medical bills), put on hold (some student loans) or negotiated (family loans).
Call every company you pay on a regular basis. Let them know you can no longer afford their service and need to make different arrangements.
This is definitely the time to cut back or eliminate expensive cell phone plans, cable, subscriptions, maid service, lawn service, personal trainers and internet subscriptions (not broadband per se, but World of Warcraft).
Take a good look at your savings and be realistic about how long you will be able to pay the bills. Now, go back to your bills and make more cuts.
Saving Money
Losing a job, whatever the reason, is stressful. Don’t become complacent in your jobless existence or you’ll find the money has dwindled to nothing and your options are few.
When you’re faced with a job loss this is precisely the time to make the incredibly hard cut backs. Think about this: a coworker I’ll call JC was without a job. Still JC went to Starbucks every day, bought new furniture and started a training program. JC played video games all day and stayed up most of the night. JC did not have a single interview in five months, was on the verge of losing the house and JC’s only priority was buying a hot tub.
Now is the time to think ahead and plan ahead instead of spending money without thinking.
Take inventory of your household needs. Check the bathroom and find out if you need soap, toilet paper, shampoo, deodorant. Do you need resume paper, ink for the printer or personalized business cards? Don’t just rush out and purchase them – find the best deal and shop smarter.
Go through your libraries and cull out books you don’t read, movies you don’t watch and music you’ve already downloaded. List everything on Amazon, Craigslist or eBay.
Contact an organization and talk to the volunteer coordinator. Get out and meet people who can see you in action.
Your biggest asset right now is time. You can spend 30 minutes comparing prices at two grocery stores and save 15% on your food expenditures. You can comb the racks at a thrift shop until you find a suit jacket in your size and good condition, drop it off at the dry cleaner with a coupon and repair that loose button yourself. You can absolutely drive slower to conserve gas and shop at off peak times. Don’t be like my friend JC and ignore the value of time – JC managed to run a red light, get caught, and spent $500 on the ticket and traffic school.
Saving Money on Food
I’m certainly no expert on cheap eating but there are a few strategies I’d like to share. First is that you must know what you have and what you like to eat. It’s not use buying a 30 pound bag of beans if you hate them and throw the entire thing away the second you get a new job.
Take inventory of your pantry, refrigerator and freezer. Without even looking I can tell you I have over 10 cans of tuna, four boxes of cereal and six brownie mixes in my pantry plus three loaves of bread and two gallons of milk in the freezer. Cereal and milk for breakfast, tuna sandwiches for lunch and brownies for dinner? I’d survive. The first step is to know what you have.
Google “meals under $15″ and start bookmarking recipes.
Find ways to substitute. Burritos are just as tasty without chicken and you can live with off-brand mac n’ cheese.
Use the amazing power of the internet to find cheaper ways to do everything, including cooking. You’ve got a ton of pasta? Research the best cheese and milk to make better than Kraft mac n’ cheese and make it in bulk.
If you don’t already have one, buy a used chest freezer on Craigslist. Fill it with milk jugs filled with water and start stocking up on food when it’s a great deal.
Check the bread store for markdowns on bread and snacks.
Pick up vegetables at Angel Food Ministry.
Ask family and neighbors for their extra tomatoes, lemons, zucchini and oranges.
Use this list to determine what fruits and vegetables are in season and stick with those.
Call your grocery store and ask when they do regular markdowns on dairy, bread and meat. Shop during those times and find items you can freeze or eat quickly.
Use this site to learn how to combine coupons, money back offers and sales to buy the food and household products you need at the drug store for pennies.
Making Money on the side
Take inventory of your closets and garage. Note clothes you’ll NEED to buy (summer shorts for the kids or an interview suit) and pull out the ones that don’t fit or are not worn. Clean those clothes up and take them to consignment or sell on eBay
A correlation to cutting back on goods and services you no longer find necessary when you’re in a period of unemployment is finding a way to do those tasks yourself and perhaps make a little money.
If you’re now cutting your own lawn why not let your neighbors know you’ll do theirs every Saturday for the summer for a set price. You’re local, they know where to find you if you don’t make it over and it frees up their time and probably a little money if they hire out like you did.
If your decision to sell unused items on eBay really takes off, offer to sell your friend’s items for a percent of the selling price. Again, they should know and trust you’re not going to take their item and leave town plus you have a financial incentive to make sure they get the highest possible offer.
Do you have a trailer you can’t sell? Advertise at Ikea or Home Depot that you’re available for hire out, an hour at a time, to transport those bulky items home. Many people, me included, can’t take advantage of deals on furniture or appliances without paying huge delivery charges.
What else am I forgetting? Please add your suggestions in the comments section!
The car is FINALLY paid off and it feels so good! Tomorrow night I’ll wash it and clean the interior too. I’d insert a picture of the car right now but alas, all my pictures are on the other computer.
Looking at my finances it’s completely amazing to me that I’ve paid off $6,947.36 since March of last year just on my car loan! That’s a lot of money, people!
Anywho, before I get too excited I thought I’d put in some goals for my savings through December so I can update here when MSN is down.
The smallest goal is a mere $25 a month to be transferred to online savings for a new car. While $175 won’t make a huge dent in replacing my car it’s my goal to have $10,000 by the time the car hits 200,000 miles. At this pace I have six more years so I can steadily increase my savings as I pay off other debts.
Next is a $50/month transfer to my big Emergency Fund at ING. Even when this account hits the big 1-5-k I want to be transferring money here every single month. the goal is $350 to be added before the end of the year.
$50 a month will be transferred to a Roth IRA, possibly my existing one or a new account. While I won’t max out this by April I need to be buying something while the stocks are so low. Again, $350 by the end of December.
My major savings goal is to contribute $300 per month to my student loan payoff. I won’t be sending this to Sallie Mae directly because they’ll do screwy things with my account AND because my EF is not at 100% of goal yet. BUT once I get enough to pay off one of the two loans I’ll make a transfer. $300 a month means $2,100 by the end of the year.
So there it is: $2,975 to savings by January 1, 2010 and that’s in addition to $1,250 to my 401(k).
This savings does not take into account:
*months with 5 paychecks (July, October, December)
*part time job income
*settlement money
*raises
*freelance income
*bonuses
When I get a chance to write again I’ll focus on howI’m planning on accomplishing these goals.
