Budget Lesson, Part 1

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Over the next few weeks, I will be going over my budget in detail.

The first section is income, but that’s straightforward.¬† A line for each income source, bi-weekly, monthly and annual totals.¬† Simple.

Before we start, a word on the organization.  There are five columns:

  • Category – This is the description of the line item.
  • Cost – How much do you pay for this item?
  • Time – What is the frequency of the payment?¬† Valid values are ‘m’, ‘q’, ‘y’, ‘w’ for ‘Monthly’, ‘Quarterly’, ‘Yearly’ and ‘Weekly’.
  • Monthly – Cost and Time are combined to calculate the monthly expense, to make it possibly to budget.¬† If this is $100, I need to set aside a C-Note each and every month to make the payment when it comes due.
  • Yearly – This column is mostly informative.¬† It’s helpful to see this in comparison to my annual pay.

The first section I am actually going to address is discretionary spending.

  • Groceries/Dining¬†¬† ¬†$475.00 – We don’t budget heavily for groceries, which would be a surprise if you saw me.¬† At the smallest I have ever been, fit, I was never small.¬† We shop smart, buy in bulk when it makes sense, and rarely eat out.¬† We also keep cooked rice and beans in containers in the refrigerator as a cheap and healthy way to stretch almost everything we eat.
  • Discretionary¬†¬† ¬†$250.00 – This gets used for household items, like toilet paper and soap.¬† It also get used for the odd book or movie, or to cover the gaps between the other categories and reality.
  • Baby stuff¬†¬† ¬†$60.00 – We have two children in diapers.¬† ‘Nuff said.¬† This category does get progressively smaller as the baby items are outgrown and the children get potty-trained.
  • Gas/oil¬†¬† ¬†$200.00 – Gas and auto-maintenance.¬† This is actually higher than monthly costs, allowing us to set some aside for larger maintenance issues.
  • Clothes¬†¬† ¬†$15.00 – All of our dressers are overflowing, so this is strictly replacement cost for the time being.¬† Our kids wear a lot of hand-me-downs.
  • Blow Money¬†¬† ¬†$50.00 – Occasionally, habitual shoppers need to shop.¬† If they don’t do it on-budget, they will do it off-budget and kill the whole idea.

Initially, we used a “virtual envelope” system.¬† We had a spreadsheet and every time something was spent in this category, we entered the amount and stopped when the category was spent.¬†¬† Didn’t work.¬† We are going on a pure, cash-only system as of the first of the year.¬† No money, no spendy.

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Christmas for the Destitute

First, my disclaimer:¬† I’m not destitute.

However, I’m trying to spend Christmas acting like I am a pauper.

Why, with small children and beautiful-and-more-than-deserving wife, would I want to deprive my family of a bountiful holiday?

Before we get into the reasons for being a horrible grinch bent on depriving my children of their god-given right to rampant consumerism, let’s look at the Philosophy of Destitution.

The primary reason to pull back and tone it down is basic frugality.¬† Excessive anything is not frugal. I am training my children–and for that matter, my wife and my self–in the finer arts of personal responsibility and frugality.¬†¬† Accumulating debt for a fleeting holiday is insane.¬† If we can’t afford to buy it, we certainly can’t afford to give it.¬†¬† Anything else would be setting a bad example and children learn best by example.

Another piece of the Philosophy of Destitution(when I read this word, I hear a deep, booming voice in my head, like a 30s radio superhero voiceover)¬† is “green”.¬†¬†¬† I consider myself a conservationalist rather than an environmentalist, so don’t read too much into that color.¬† I try to be responsible, instead of destructive and I try to avoid being wasteful.¬† Toys that won’t be played with are wasteful. A garbage can full of packaging for those same toys costs money.¬† It is much cheaper to avoid the landfill here.

Back to “Why”. Why would I be willing to deprive my family?

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5 Ways to Make Shopping Quickly a Breeze

Shopping is a major time sink. Between the travel, the traffic, and the checkout lines, the actual shopping almost seems

English: An Entennmann's cake donut, bought fr...

English: An Entennmann’s cake donut, bought from a grocery store four-variety pack. (Photo credit: Wikipedia)

pleasant. Almost. Here’s my super-secret ninja plan to reduce the unpleasant time wasted while giving away my money in exchange for the privilege of not scooping manure straight from the source onto my crops to get both my burgers and my salads.

First, The List. I’m not going to tell you to use a list. You know that already. My secret? Organize your list by department. Divide the list into sections.¬† Make sure it has a produce section, a meat section, a baking section, and any other section you will be visiting. Don’t leave the department until that section of the list is complete. That will eliminate chasing back and forth for things you forgot, which is a huge timesaver.

Shop where you know. When you are in a hurry or stressed by crabby kids, don’t go check out a new store. You won’t enjoy it with the kids in tow, AND you’ll be tempted to buy more, since you will encounter more as you explore the store trying to find what you need.¬† Go somewhere you know.¬† That will eliminate any hunter/gatherer-style shopping.¬† If you know where you need to go, you’ll get through the shopping trip much faster.

Skip the bad aisles.¬† I resist temptation best by avoiding it. In the store, I avoid it by skipping entire aisles of stuff. If there’s nothing I need in an aisle, don’t go there. Why tempt myself with that many more choices? I’m sure I can find something I’d like to bring home in almost any section of almost any store.¬† So I avoid the unnecessary sections.

Shop at the right time.¬† Don’t go on Saturday afternoon when every other 9-to-5er is free to run errands.¬† If you absolutely must shop on the weekend, either go late–I prefer 3am–or go right at lunchtime when everyone¬† is stopping to feed the hungry children. Me? I’ll either feed them first or fill them up on samples at the grocery store.

Use less, eat less.¬† You’ll need to buy less that way. If you eat smaller portions, or learn how to cook with a versatile mix of staples, you’ll need to buy less, either through lower consumption or lower variety. I’m not saying eat boring, just get creative with the basics.¬† I know a couple of different ways to cooks rice and beans, without getting bored.¬† When you add the perfect-food-makers, like bacon, it’s easy to keep meals interesting.

How do you reduce wasted time shopping?

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Five Signs You Don’t Need That

Everybody occasionally buys things they don’t need, from DVDs to luxury cars.¬†¬† There are signs that what you’re buy may not be an actual necessity.

Here are five signs you should put that back:

  1. You’re buying that sweater or video game for the endorphin hit, you’re shopping for the addictive high not to fill an actual need.¬† It’s a habit that’s as hard to break as smoking, if not harder.¬† You can’t, after all, stop shopping altogether.
  2. You already have one.¬† Or 10.¬†¬† A relative can’t turn down a sale and she buys for life.¬†¬† She regularly buys 3 of whatever useful gadget is available on the shopping channel.¬†¬†¬† Her house has turned into a sad story of compulsive hoarding.
  3. The rationalizations for your purchase include “It’s cool”¬† or “My friends all have one.”¬† If you are buying something just for the bragging rights, it has become an ego purchase, which is something to avoid.¬†¬† The insidious part of an ego purchase is that you have to keep topping your last purchase and the last purchase of your social circle, or the purchases lose value.¬† It’s a vicious circle.
  4. It doesn’t have a “place”.¬† Where are you going to put it?¬† Is it going to go in the corner, or is there a drawer or shelf it can live on.¬† If there’s no play to consider “away”, you’re just buying clutter.¬† If you must have it, go home and toss, sell, or donate 2 things to make room. If possible, do that before you actually by the new toy.¬†¬† If it’s important, you’ll come back for it.
  5. You didn’t know you needed it 10 minutes ago.¬† If you actually need it, it’s on your list, right?¬† Impulse purchases have been the biggest budget-killer in my house.¬† That’s why we use Alice for the household goods.¬† If we don’t see the it, we can’t throw it in the cart at the last minute.¬†¬†¬† We no longer shop with the debit card, so we have to watch what we buy.¬† It’s embarrassing to have to undo a purchase at the checkout because I didn’t bring enough cash.

What did I miss?