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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Hypocrisy

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Sometimes people make choices for a variety of reasons entirely outside of my knowledge and understanding.  Yet somehow, I still manage to be dismissive and occasionally derogatory.

What I have come to realize is that there are numerous reasons for making apparent bad decisions.   It is easy, though often not correct, to dismiss these supposed mistakes as character flaws, without taking the time to fully understand the decision-making process.

For example, I am usually quick to point out the folly of gadgets.¬† Odd, that, for a gadget geek.¬† So many gadgets are merely ego purchases, bought because the are “cool”.¬† Obviously a waste of money.¬†¬† A smartphone serves no practical purpose for an average person, right? What if that person’s life is so difficult to manage that a calendar sync including both spouses and multiple calendars will allow a family to make sure every kid gets to every activity on time?¬† Or he has a side business that is easier to manage with ubiquitous email?¬† Or even a strong urge to limit the number of items carried every day?¬† A phone/mp3 player is fewer gadgets than separate appliances.

Another example is a close friend who started running several months ago, to be met with questions of why somebody would run without being chased.¬† It’s easier to play on the internet or ride a bike, right?¬† And the special running shoes?¬† Silly.¬† Except running is cheaper than biking and running shoes beat knee surgery any day.¬†¬† Running on the street is more effective than a treadmill, since you can’t step off after running two miles away from your house.

So here I sit, a runner with a crackberry and plate full of crow.

“Don’t judge a man until you’ve walked a mile in his moccasins.”¬† Indeed.

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Babies Are Expensive

From the comments here.  The discussion is on how much it costs to have a baby.  Edited for clarity.

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Actual birthing costs vary. We’ve had three kids over ten years and birthing costs have varied from $250 out of pocket to $8500.¬†¬† Our highest and lowest price births were 20 months apart. The highest price birth involved induced labor with an epidural. For the lowest out-of-pocket price, I added my wife to my policy before the birth, so she was double-covered. If one of your policies is less than ideal and there are multiple policies available, I recommend doing this. It saved us thousands.¬† All told, If things go well, you could slide for as little as $1500 total.

For the highest price birth, we threw ourselves on the mercy of the finance department. They have a charity fund to pay the bills of the less fortunate. We qualified…barely.¬† If you have a medical bill you can’t afford, ask if there is a grant or donation you can apply for.¬† Always ask if there is some way the bill could be lowered.

Breast-feeding beats the heck out of formula, financially, but breast-feeding doesn’t always work. Ignore the boob-nazis who insist you are slowly killing your kid by using formula. I’ve got 3 kids, and each had different feeding issues.

Baby formula runs $19 for a big container at Sam’s Club, or a large percentage of your soul at most other big box stores.¬† Formula alone will pay for your membership in under a month. For a big eater, that’s $20-30 per week. For a normal eater, 2-3 weeks. For planning purposes, assume $100/month in formula costs for the first six months, when food starts coming into play heavily. After that, the formula expense goes down, but not away for at least 6 more months.

Diapers are painful. Not just the smell–though that hurts, too, sometimes–but the expense. I currently have 2 in diapers; one is potty-training. Our monthly costs for diapers, now, are about $75. It was easily twice that when they were younger. Figure at least $100 per month in diapers.¬† Unless your baby has irritation problems, go with cheap diapers. Leak-guard is a joke.¬†¬† If you are relying on leak-guard to keep the contents inside the diaper, you aren’t changing your baby often enough.

I couldn’t begin to guess at how much you’ll spend on baby clothes.¬† I have never bought clothes for our kids. Whatever didn’t come free from friends and family walked into the house of it’s own volition, following my wife home from the store.

Toys are an almost purely voluntary expense. You’ll get as much as the kids needs free, as presents. You’ll go overboard and give the kids 10 times that, without realizing it. Don’t. For the first four to five months, its fingers and toes will be entertaining enough. After that, if there are more than about ten toys, it’s too many; the kid will never get attached to any of them. Keep it small. It’s better for the kids and the budget.¬† Little kids prefer boxes to toys, anyway.¬†¬† Give the kid a shoebox instead of a Leapfrog.¬† Really.

Portraits suck, too. If you have to get them done professionally, get a membership that covers sitting fees, and use coupons. I recommend JC Penney’s. Using judicious coupons and the membership, we get portraits for under $20.

Baby food is probably cheaper to make in a food processor, but you can’t beat the convenience of the little jars. If you watch sales, you can stock up affordably. Mix every meal with some rice or oatmeal mush to stretch it, without making it unhealthy. Depending on your kids, and how much you listen to the “experts”, this is a nonexistent expense before six months. Our kids started eating baby food in their second months, at least a little bit.

Babies are expensive. Don’t doubt that for a second, but ignore the polled averages when it comes to expense.¬† Hand-me-downs, thrift stores, and good sales cut the expense a lot.

How do you save money and value with a baby in the house?

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5 Things Guaranteed To Annoy Your Wife

The grotesque nagging wife

The grotesque nagging wife (Photo credit: Wikipedia)

One from the vaults….

If you’re married, or anything close to being married, you’ve irritated your wife. ¬†Even if you think you are perfect and the¬†epitome¬†of unannoyingness, I promise, there has been a day when she strongly wished you traveled for a living.

It’s long been known that the two things most likely to break up a marriage are money and sex. ¬† The former because there is too much, too little, or just the right amount going to the wrong places, and the latter because there is too much, too little, ¬†it’s not with each other, or it is with each other, but you’d really prefer otherwise. ¬† If your problem is the latter, I can’t help you.

If your problem is the former, I can help you understand some things you may be doing that are driving her batty.   Kill-you-in-your-sleep-and-pretend-it-was-the-dog type of  batty.

1. ¬†Nagging her about her shopping, but buying whatever you want. ¬†Gentlemen, this is known as a double standard. ¬† Don’t do it. ¬†In my house, my wife’s on an allowance. ¬† It was her idea. ¬†A few months later, I realized that I needed to be on one, too. ¬† Naturally, her allowance is bigger than mine. ¬† I don’t mind the disparity, because she still smokes. ¬†If her allowance didn’t give her room to smoke and shop, her allowance would be nothing more than a polite fiction. ¬†Whatever you do, find something that works for both of you and meets both of your needs, fairly. ¬† ¬†Anything else will only build a resentment that will burn for a long time.

2. ¬†Nagging her about her shopping, yet demanding she do all of the shopping. ¬† My wife has a weakness: clearance tags. ¬†If something is on sale, there’s a good chance it’s going to come to our house. ¬† I have an aversion to shopping. ¬†I hate it. ¬† Our budget dies a little bit each time my wife shops alone. ¬† ¬† We’ve come to an agreement. ¬† Now, I do most of the shopping, so she doesn’t feel tempted. ¬† I’m learning to embrace my inner material girl so we don’t have to have “discussions” every time she steps out for milk and comes home with $100 worth of clothes for the younger brats.

3. ¬†Nagging her about her shopping. ¬†Nobody likes being nagged. ¬† If you’re having a problem that keeps repeating itself, talking about it more won’t help. ¬†Neither will talking about it louder. ¬† You need to find a way to communicate that she will hear and understand. ¬† ¬†Different people communicate in different ways. ¬† ¬†Find the way that works for both of you.

4. ¬†Nagging her. ¬†¬†A wise man once said, if everyone around you is a jerkface, maybe the problem isn’t everyone around you. ¬† Have you ever considered the idea that the problem might be you? ¬† If nagging is the only way you have to deal with people, you need to work on that. ¬†Don’t blame her. ¬†Maybe you’re ticked off about something that isn’t irritating. ¬†If that’s the case, she certainly has the right to be annoyed that you are nagging her.

5. ¬†Going on and on about how much you’d like to be me. ¬† Yes, I live the rockstar life, driving the station wagon with 6 disc changer and all. ¬†Yes, I am the neatest thing since sliced bread, and even that was a close contest, but really, confidence is important. ¬†You don’t have to be me to be cool. ¬†You’re swell, too. ¬† You’re right, this one isn’t about money, but it’s probably still irritating.

There you have it, my perfect solution to a happy marriage: don’t nag and quit trying to be me. ¬† ¬† There are other important bits, like love, respect, and communication, but this is a good start.

What do you do that annoys your spouse?

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