Search Results for “feed/budget-lesson-part-3/budget-lesson-part-2/christmas-for-the-destitue/4-ways-we-keep-wasting-money”

Make a Budget

: Image by r.lovewell via Flickr

In the past, I’ve gone through a detailed series of budget lessons demonstrating how to make a budget and showing my personal budget spreadsheet template. If you weren’t here to see them develop, you probably haven’t seen them at all. I’ve never built an actual index for those posts.

This is the master index of my budget planning resources. As I develop more, this will grow.

Budget Lesson #1 – In this lesson, I go over how we handle discretionary income and I explain our modified envelope system. The discretionary budget contains things like our grocery bill, or the clothes we buy. We have near-total discretion over what is purchased, hence the name.

Budget Lesson #2 – Lesson #2 contains the details of our monthly bills. These are the ones that are consistent, predictable, and actually due each month. Most people take these for granted as the bills they have to pay, but it’s not true. You can get almost all of your regular bills reduced just by asking. You would also be surprised what you can do without, when properly motivated.

Budget Lesson #3 – This is where I explain how we deal with the non-monthly bills. That is, the bills that have to be paid, but are not due on a monthly basis. I also share the personal budget spreadsheet template I developed. I am working on a few sample templates to match various imaginary scenarios. If you’d like to be an anonymous case study, and get free help setting up a budget, let me know, please.

Budget Lesson #4 – In this lesson, I describe our “set-aside” funds for things that will need to be paid eventually, but not on a set schedule. Sometimes, they are never actually due. We set aside money for the parties we throw, for car repairs and for a number of other things. A few of these items are outright optional, but they are part of what makes life fun. You can’t make a budget without including some of the extras.

Budget Lesson #5 – This is the companion piece to lesson 2. Learn how I’ve reduced–or attempted to reduce–each of these bills. For the better part of two years, I called Dish Network every few months to ask for a discount. For almost 2 years, it was granted. Then one, day, they told me they were putting a note on our account to keep us from getting any more discounts, so I canceled. 100% discounts help us save more.

Budget Lesson #6 – This is the reduction companion to lesson 3. These bills are harder to reduce. Have you ever successfully gotten your property taxes lowered?

Budget Lesson #7 – This is the reduction companion to lesson 4. Notice a pattern, yet?

Budget Lesson #8 – Here, completely out of order, is the reduction companion to lesson 1. Watch as I magically reduce–or rationalize–our discretionary budget.

So, dear readers, what part of budgeting should I address next?

A Bit of Christmas Magic

Life

On Thursday, my wife left with my kids and dog. I had to work all day on Friday, so she took off to get an early start on Christmas at my brother’s house. I followed Saturday morning.

Two nights with no whining, and a bed to myself.

Friday afternoon, my wife called to tell me about her day.

When she got to my brother’s, she took her tailgate down to get the suitcases out of the back of her truck. She left the plastic container full of presents in her truck, since we’d be exchanging presents at my parent’s house nearby.

Friday morning, she left to feed her shopping addiction for a few hours.

When she got to the giant store that had our new car seats on sale, she discovered that she had neglected to put the tailgate back up on the truck when she unpacked. This was the box that held most of our budgeting overspend.

Gone.

When she called me, she was retracing her steps, hoping to find the box.

I was upset.

She didn’t find the box on the side of the road.

Gone.

Normally, this would be a strong object lesson in the futility of rampant consumerism. A lot of zen-like “the stuff you own is fleeting”, amidst the wailing of children who are discovering that their Christmas presents evaporated in a ditch somewhere.

Somebody found the box. I don’t know who.

Whoever it was, opened the box and saw the tears of small children inside. She read the name tags and, amazingly, recognized enough of the first names to place the family.

Keep in mind that I live more than 100 miles away, and moved out of the town 15 years ago.

This anonymous Christmas elf brought the box into a nearby gas station, and asked them to call my parents, since the names on the tags matched those of my parents’ grandchildren.

Everything was still in the box.

Everything was still intact.

Anonymous Christmas Elf saved Christmas for my family

Christmas for the Destitute

Finance, Parenting

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?

Three Ways to Make Christmas Cheap

Finance

We failed Christmas Budgeting 101 this year. I haven’t totaled the damage, yet, but we have spent at least $500 more than we had planned.

It hurt.

Next year, we’re going to handle the Christmas budget differently. This year’s model isn’t working. It’s a lot like pushing a car down a hill to get it started, but ignoring the cliff at the bottom.

1. Use cash. A huge part of our problem was that Capital One is helping us celebrate. It’s horrible, because we both know we shouldn’t be using a credit card, for exactly this reason, but we can’t seem to make the transition back away from the plastic. Part of the reason is that Amazon and ThinkGeek don’t accept cash, and part of it is convenience. Don’t get me wrong, we’re not carrying a balance on the card, but it’s still far too easy to overspend.

2. Communicate! If our gift budget is $500, and I spend $300 online while she’s busy spending $300 in stores, out budget is shot. Worse, if we spend that money buying stuff for the same people, our budget is shot before our shopping is done. A little bit of this happened to us this year.

3. Explore atheism. There really is no more effective wa

y to cut down holiday expenses than to eliminate the holiday completely. This may not be the best answer for everyone, but it’s effective. On the other hand, I know several atheists who celebrate Christmas as much as anyone else. This probably isn’t a good alternative for most people.

3, Take 2. Cut back on “stuff”. My kids have more toys than they can play with. My kids’ parents have more toys than they can play with. Do we really need more? Wouldn’t it be better to spend the money I’d normally use to buy my wife a present on a series of date nights, spread out through the year? I could take my kids to Feed My Starving Children so they can understand how privileged they are and how much the things they take for granted are really worth.

There are so many other ways to celebrate a holiday that has turned into a national orgy of consumerism. Next year, we’ll be trying some of the alternatives.

4 Ways We Keep Wasting Money

Finance

: Image by Getty Images via @daylife

MSN Money has an article up on common ways money is wasted. Here is my spin.

We(as a species) tend to do a great job of wasting money. Between inertia and the emotional pain of cutting off something we have gotten used to–whether it be Netflix or a 3rd arm–it’s hard to kill wasted costs. As Robert Heinlein said, “Man is not a rational animal, he is a rationalizing animal.”

MSN listed 4 ways to make your money go bye-bye:

1. Credit cards

According to the article, in the US, the average rate of interest is 15% for a total nation-wide debt of $850 billion-with-a-B. That’s insane. I lucked out and quit using my cards before the CARD act forced all the issuers to send their rates to the moon. I’ve opted out of every agreement change since then, while I pay off the remaining balances. 15%! If you buy something for $1000 and pay it off in a year, that’s $1150. What could you do with an extra $150? It’s time to get out the torches and pitchforks and drop by Mr. Debt’s house.

2. Overdraft fees

I set up an overdraft protection account years ago, because it was a heckuva lot cheaper than bouncing checks. It came with a 25% interest rate and a $2 fee per use. A couple of months ago, they boosted the fee to $10 per use. Jerkface, you’re already cashing in on my interest, do you have to touch me like that at the beginning of the date, too? Thankfully, we haven’t used our overdraft protection since we went on our debt-killing crusade in April of 2009. Oh, Mr. Debt! You’re going to have a really bad day when I get to your house. There will be a smoothie à la Otis when I get there. Side note: If you’ve got a dark sense of humor, rent Otis. Not only will you love it, you’ll get the smoothie joke.

3. Unused memberships, gift cards and rebates

Gym memberships are the big example here. People buy a membership because they set some awesome New Year’s resolution, use it for 2 months, then spend 6 months telling themselves they’ll start using it again soon before they finally cancel. At $30 per month, that’s $180 that could have been spent sending me presents. If you must get a gym membership, wait until spring. That’s when people tell themselves they don’t need a membership because it’s so nice out, they can just exercise outside. When people tell themselves that, the gyms cut membership costs to lure people in to start their own 6 months of denial.

Take a look at your other recurring costs, too. Do you use the cable package you have, or could you be just as happy with the next one down? Do you need the donkeys-and-kneesocks-around-the-world channel? You’ve gotten your 10 CDs for a penny, can you tell Columbia House where to go with their $20 per CD commitment?

4. Airline fees

This one is easy. Forget the 3 hour lines, fees for showing up, Pervo-Scan™, and minimum-wage molestation agents masquerading as cops. Drive whenever possible. If it’s not possible, show up in a kilt, regimental-style(assuming you are a guy!). Don’t check a bag, just ship if overnight to your hotel. Most of the time, that’s cheaper than $50 per bag, anyway. Avoid the fees as much as possible.

What other ways have you wasted money?

Budget Lesson, Part 4

Finance

Part 4 of the Budget Lesson series. Please see Part 1, Part 2, and Part 3 to catch up. The Google Doc of this example is here.

The final category in my budget is “Set-aside funds”. These are the categories that don’t have specific payout amounts and happen at irregular intervals. When my car is paid off, there will be a car fund added to the list, instead of a new car payment.

Parties – We throw two parties each year; a Halloween party and a summer barbecue. We also have three children who have varying expectations and needs for their birthday parties.
Gifts – I don’t buy presents for my friends, and the number of relatives I buy gifts for has decreased dramatically over the years. I do, however, buy birthday and Christmas presents for my wife and kids and I participate in some form of gift exchange with my brothers and their wives. Combined, we set aside about $100 per month for parties and presents.
Pet Care – We have four cats and a dog. This is to cover cat litter and food the bunch. We have too many pets, but we can’t give them away. They are family. However, there is a moratorium on new animals for a few years. Two cats and a dog are our hard limit.
Car Repair – Cars break. Tires wear out. This isn’t a surprise, and it certainly isn’t an emergency.
Warranty Fund – We are building up our own “Warranty Fund“, to replace appliances when they break. I’d rather have the interest accruing than see this as a line-item fee on any of my bills.
Medicine/Medical – Kids get sick and prescriptions need to be filled. We figure our monthly prescriptions plus one office visit per month, but the money accrues in this fund. On low months, we have more, so we can cover the visits during flu season.
In The Hole – This isn’t actually a fund we set aside. If, for some reason, we go over budget one month, it gets entered here to immediately pay ourselves back for the over-spend. This month, this number is $170, which is how high we went over for Christmas. Since we have all of the “Set asides” and non-monthly bills stored in the same account, there was no actual debt, just this “paper” debt to ourselves. This serves the combined purposes of a mild punishment for overspending and a method to get back on track.

That is my entire budget laid out. As the series continues, I’ll be examining how I have lowered the bills, how I could lower them more, and how I’ve screwed them up.

Search Results for: feed/budget-lesson-part-3/budget-lesson-part-2/christmas-for-the-destitue/4-ways-we-keep-wasting-money

1. Credit cards

2. Overdraft fees

3. Unused memberships, gift cards and rebates

4. Airline fees