The first Friday of every month the hubby and I are suppose to meet together over pizza to discuss how much we spent on the credit card (we charge everything to it and pay it off at the end of the month so that we can get points), how much more we want to pay down on the condo and how much we have in savings. We also discuss our savings goals.
The reason why we picked the First Friday of the month to go over all this is because all the bills have been paid and all the pay checks have come in. As good of an idea as I think it is (and I'm just biased because I came up with it and it has cool alliteration), we typically don't make time to do it. However, we have resolved to do it every month in 2008 and last night was the First Friday for February.
Before I say the number, I wanted to point out that most of the charges were from the first part of the month, before I had resolved to get my money under control. This was really my main "Stage Pink" day of looking at how I was spending. I guess it gives me a good point to go from.
I was shocked to discover that we had spent $4000 this month--not counting the new dining room table or the mortgage! I just don't understand where it all went. I mean, we looked at everything so I see it, but I still don't understand how easily two people can blow through 4 grand! Admittedly, about a quarter of that went to decorate our Great Room, which I think looks really nice. I also bought some stuff for my office (new desk) and a few random things for P's office. Also, it's a big month for birthdays in my family. So i know where it went and most of it was "one offs" so it's not like I would normally spend all that. But still...we didn't eat out hardly at all for the 2nd half of the month and I drastically cut back on the Starbucks habit so the figure is hard to look at and makes me wish that I had started this whole getting money under control thing at the start of the month rather than the middle of it :-P.
Don't get me wrong, it's within our means. Or would have been if I hadn't lost my job. I had a week gap between jobs where I wasn't working. We are post paid by two weeks so I'll get a half paycheck mid-month. The end of next month I will start getting my new normal size paycheck. With the increase in pay, the three week's worth will actually equal out to only a little under what I used to get at my old job.
It's just sad because we ended up having to use $600 from savings to cover our differences, but that's exactly what we have a buffer for. I guess it just goes to show you why we need an emergency reserve. If the job thing hadn't have happened, we would have been putting money into savings instead of taking it out which does make me feel a little better.
Maybe I should just look on the bright side. At least my paycheck didn't bounce, which I was a little worried about! :-P
I'll talk about the goals that P and I set up when we talk about general goals tomorrow.
Showing posts with label stage pink. Show all posts
Showing posts with label stage pink. Show all posts
Saturday, February 2, 2008
Wednesday, January 30, 2008
Stage Pink--How Did We Get Here? Part 2
Yesterday I spoke about the underlying issues to overspending and under-saving. Now I want to talk about why people tend to dig themselves into a bad financial situation.
If you are in bad debt, ask yourself why you kept purchasing stuff you couldn't afford? If you aren't in bad debt, but always seem to be living paycheck to paycheck, you need to figure out why you don't want to save. What does "Retail Therapy" give you that you couldn't get somewhere else? I know for me after a bad day a pretty skirt or some shinny new shoes make me forget all of my troubles. Sometimes I think it has to do with the ability to make a choice and have it DO something (it's a time when us Chicks can say "I want that" and no one thinks we are being bossy).
Everyone has heard of the phrase "Money is the root of all evil." In popular culture we see all the troubles of the prosta-tots, and Hollywood people. Rich Scrooges without friends or loved ones dominate many children's books. In contrast, the Waltons seem so happy. Unfortunately, many people failed to take home the correct point (you don't need money to be happy) and absorbed the reverse (money makes you unhappy).
Try to think back to your earliest experiences with money. In our culture, money is a taboo topic. Money becomes a dirty thing. Our family didn't talk about it because we were taught that money is an emotional topic and something that you don't talk about. I was pretty lucky that they made us start a savings account and encouraged us to save our allowance for bigger ticket items. But I never heard them talk about their money or budget and was taught to not ask.
What about your experiences? Did your parents ever talk about money? Did they ever fight about it? What did they spend their money on? What did you want to spend your money on? Have your feelings about money changed over the years or do you still feel pretty well the same?
If you are in bad debt, ask yourself why you kept purchasing stuff you couldn't afford? If you aren't in bad debt, but always seem to be living paycheck to paycheck, you need to figure out why you don't want to save. What does "Retail Therapy" give you that you couldn't get somewhere else? I know for me after a bad day a pretty skirt or some shinny new shoes make me forget all of my troubles. Sometimes I think it has to do with the ability to make a choice and have it DO something (it's a time when us Chicks can say "I want that" and no one thinks we are being bossy).
The entirety of our personal experiences with money has taught us "money myths". Everyone has their own set. These could be memories, personal vows, or experiences. Maybe you feel like you have to treat yourself to make yourself feel better. Maybe you are trying to fill a void. Maybe you feel like you NEED some item to get through through a difficult day. Maybe you just don't know the difference between a need (dinner) and a want (take-out). Just think about it and think about what exactly we are working with when it comes to why you think you need what you think you need.
Everyone has heard of the phrase "Money is the root of all evil." In popular culture we see all the troubles of the prosta-tots, and Hollywood people. Rich Scrooges without friends or loved ones dominate many children's books. In contrast, the Waltons seem so happy. Unfortunately, many people failed to take home the correct point (you don't need money to be happy) and absorbed the reverse (money makes you unhappy).
Try to think back to your earliest experiences with money. In our culture, money is a taboo topic. Money becomes a dirty thing. Our family didn't talk about it because we were taught that money is an emotional topic and something that you don't talk about. I was pretty lucky that they made us start a savings account and encouraged us to save our allowance for bigger ticket items. But I never heard them talk about their money or budget and was taught to not ask.
What about your experiences? Did your parents ever talk about money? Did they ever fight about it? What did they spend their money on? What did you want to spend your money on? Have your feelings about money changed over the years or do you still feel pretty well the same?
What does money mean to you? Make an effort to notice how you interact with money and what emotions and attitudes you have tied to money.
Tuesday, January 29, 2008
Stage Pink--How Did We Get Here? Part 1
One aspect of not being in the best place financially that is important to address--but is usually ignored--is why did we get into the situation in the first place? What is the root of the problem?
Think about it. You didn't wake up one day and suddenly make loads of financial decisions and then realize the next day that you messed up. It's a gradual process. Knowing where we are at with our money is more than just knowing how much you make, but it's also about knowing how you interact with it and why you do.
To me, many savings and get out of debt programs are like perfume. They give you all these ideas and tools, but mask the underlying problem. Everything smells just fine on the surface but all the same problems are still there. Figuring out the why behind what you spend will greatly increase your chances of long-term success because you'll be able to stop...or at least have an easier time.
Actually, a better comparison might be weight. Eating too much is like spending too much. Being inactive is like never saving. And just like money, it's usually not really about the food, it's about how it makes us feel. I know that every now and then I need a good strong dose of "Retail Therapy"! But just like a food binge, all the happiness goes away when I see how little I managed to save over the month.
Money is an emotional topic. Not because we get all choked up about the pretty shinny quarters and the neat little water mark on the $20. It's an emotional topic because of what it represents and what it can get us and fear over where the lack of it could land us.
Money (or a lack of it) doesn't determine who you are! Money is just a tool to get stuff. And at the end of the day, stuff is just stuff. Through out this blog, I am going to keep going back to that point--Money is a Tool To Get What You Want. And we are going to work on using to get what we really want.
When we start dealing with Phase Blue, we will talk more about figuring out what it is that you want. Once you know what you want, you wont feel like you need the high you get from purchasing things, and you'll find it easier to stop buying items you don't really need, but for now, over the next couple of days, each time you buy something, ask yourself why you bought it. Do you really need it? If not, what does it represent? Do you need that latte or do you like the tactile feel of the cup in your hand and the joy of ordering that "Triple Venti Vanilla NonFat Sugar-Free Latte" (my personal favorite).
There's nothing wrong with the occasional splurge, of course, and that's not what I'm saying. Treating ourselves can be very nice every now and then. We just have to limit it. Impulsive is different from Compulsive. If you buy something impulsively you get it because you want it--and this is much easier to stop. If you buy it compulsively you get it because you can't help yourself. Which type are you? Think about what makes you buy impulsively and compulsively.
Think about it. You didn't wake up one day and suddenly make loads of financial decisions and then realize the next day that you messed up. It's a gradual process. Knowing where we are at with our money is more than just knowing how much you make, but it's also about knowing how you interact with it and why you do.
To me, many savings and get out of debt programs are like perfume. They give you all these ideas and tools, but mask the underlying problem. Everything smells just fine on the surface but all the same problems are still there. Figuring out the why behind what you spend will greatly increase your chances of long-term success because you'll be able to stop...or at least have an easier time.
Actually, a better comparison might be weight. Eating too much is like spending too much. Being inactive is like never saving. And just like money, it's usually not really about the food, it's about how it makes us feel. I know that every now and then I need a good strong dose of "Retail Therapy"! But just like a food binge, all the happiness goes away when I see how little I managed to save over the month.
Money is an emotional topic. Not because we get all choked up about the pretty shinny quarters and the neat little water mark on the $20. It's an emotional topic because of what it represents and what it can get us and fear over where the lack of it could land us.
Fessing up to the issues that give us the urge to splurge can be scary, but dealing with them is the only way to figure out why you are in the situation and the only way to figure out how to get out of it. If you are always trying to pay off a purchase you made a long time ago and probably hardly remember anymore, or if you are always spending everything you make, how are you going to reach your goals for the future? And if you want to reach those goals, what's getting in your way?
Knowing the reasons why we overspend or under-save will help us define our goals in Stage Blue by letting us know why we treat money in a certain way. Once we figure that out, we will have a much easier time deciding what our true values are and how to reach goals and make choices aligned with those values.
Money (or a lack of it) doesn't determine who you are! Money is just a tool to get stuff. And at the end of the day, stuff is just stuff. Through out this blog, I am going to keep going back to that point--Money is a Tool To Get What You Want. And we are going to work on using to get what we really want.
When we start dealing with Phase Blue, we will talk more about figuring out what it is that you want. Once you know what you want, you wont feel like you need the high you get from purchasing things, and you'll find it easier to stop buying items you don't really need, but for now, over the next couple of days, each time you buy something, ask yourself why you bought it. Do you really need it? If not, what does it represent? Do you need that latte or do you like the tactile feel of the cup in your hand and the joy of ordering that "Triple Venti Vanilla NonFat Sugar-Free Latte" (my personal favorite).
There's nothing wrong with the occasional splurge, of course, and that's not what I'm saying. Treating ourselves can be very nice every now and then. We just have to limit it. Impulsive is different from Compulsive. If you buy something impulsively you get it because you want it--and this is much easier to stop. If you buy it compulsively you get it because you can't help yourself. Which type are you? Think about what makes you buy impulsively and compulsively.
Saturday, January 26, 2008
Stage Pink--How Much Do I Spend?
We are going to look over all of our expenses and write down how much we spend in a year. Don't stress about the numbers. Just try to be as accurate as you can be.
For payments that you know for the month like your rent or cell phone, multiply by 12. For expensive things that you buy every couple years (new laptop or cell phone or big vacations, for example) divide by the number of years the item is replaced. Some of it is going to be hard because you might not know how much you actually spend. Don't worry. Just come up with an educated guess. Some things like makeup and clothes are going to be hard to fess up to. Others might require a bit of digging (electricity, for example).
Once you have these values calculated, add them all up. This is how much you spend in a given year. How do those numbers make you feel?
Now go find your most recent pay stub and multiply by how many pay stubs you get (typically either 12, 24 or 25). Is your yearly take-home higher or lower than your expenses? Are you surprised? Shocked? Happy?
If your expenses are higher than your paycheck you are living above your means. If it's only a little below, you are living right at your means. If your expenses are 10% below your take home pay, give yourself a pat on the back. There should be about 10% difference and you should save this 10%.
If you are super cool and at or above 10%, congrats! That's fantastic! You'll still want to do Stage Blue (to set your goals) and advanced parts of Stage Green (building your portfolio).
If you aren't at the 10%, don't worry. Mostly everybody is very far from that. This is what we are going to work on.
This is where my biggest trouble is and the part that I am most looking forward to tackling in Stage Orange. We don't overspend, but we definitely under-save.
For payments that you know for the month like your rent or cell phone, multiply by 12. For expensive things that you buy every couple years (new laptop or cell phone or big vacations, for example) divide by the number of years the item is replaced. Some of it is going to be hard because you might not know how much you actually spend. Don't worry. Just come up with an educated guess. Some things like makeup and clothes are going to be hard to fess up to. Others might require a bit of digging (electricity, for example).
Once you have these values calculated, add them all up. This is how much you spend in a given year. How do those numbers make you feel?
Now go find your most recent pay stub and multiply by how many pay stubs you get (typically either 12, 24 or 25). Is your yearly take-home higher or lower than your expenses? Are you surprised? Shocked? Happy?
If your expenses are higher than your paycheck you are living above your means. If it's only a little below, you are living right at your means. If your expenses are 10% below your take home pay, give yourself a pat on the back. There should be about 10% difference and you should save this 10%.
If you are super cool and at or above 10%, congrats! That's fantastic! You'll still want to do Stage Blue (to set your goals) and advanced parts of Stage Green (building your portfolio).
If you aren't at the 10%, don't worry. Mostly everybody is very far from that. This is what we are going to work on.
This is where my biggest trouble is and the part that I am most looking forward to tackling in Stage Orange. We don't overspend, but we definitely under-save.
Friday, January 25, 2008
Intro To Stage Pink--What do I buy?
Before we do anything we need to figure out where we stand. How much are we really spending? Some people think to set goals before determining your situation because they want the dreams to be unfettered by reality. I think that having a good dose of the situation helps your goals in Stage Blue to be more realistic.
I know it's scary, but we need to figure out what we have to work with. Let's just rip the band-aid off and figure out where we are at. First we are just going to look at what we spend our money on. We'll worry about how much money we spend later on.
Take out a sheet of paper and list every expense that you have in a given year. Don't worry about putting numbers next to it yet. Just write down everything that you spend money on. Here's what I had:
Mortgage Payment
HOA fees
Electricity
Gas (utility)
Water
Cell Phone
Student Loans
Car Payment
Gas (for car)
Parking
Public Transportation
Health Insurance
Car Insurance
Clothes
Food
Eating Out
Starbucks
Entertainment
Electronics
Household Items and Decor
Gifts
Makeup
Haircuts
Homeowner's Insurance
401(k)
Other
Maybe you have more or less than me. Don't try to do this all at once. Start the list and then hang it up on your fridge. Each time you think of something new, put it up there. Maybe you spend enough on something that it needs it's own category, like my Starbucks category. Trust me, I drink alot of Starbucks.
I know it's scary, but we need to figure out what we have to work with. Let's just rip the band-aid off and figure out where we are at. First we are just going to look at what we spend our money on. We'll worry about how much money we spend later on.
Take out a sheet of paper and list every expense that you have in a given year. Don't worry about putting numbers next to it yet. Just write down everything that you spend money on. Here's what I had:
Mortgage Payment
HOA fees
Electricity
Gas (utility)
Water
Cell Phone
Student Loans
Car Payment
Gas (for car)
Parking
Public Transportation
Health Insurance
Car Insurance
Clothes
Food
Eating Out
Starbucks
Entertainment
Electronics
Household Items and Decor
Gifts
Makeup
Haircuts
Homeowner's Insurance
401(k)
Other
Maybe you have more or less than me. Don't try to do this all at once. Start the list and then hang it up on your fridge. Each time you think of something new, put it up there. Maybe you spend enough on something that it needs it's own category, like my Starbucks category. Trust me, I drink alot of Starbucks.
Thursday, January 24, 2008
Getting On Track--How I am Going to Fix my Finances
As I stated yesterday, I want to Fix my Finances. I know that I can't do this in one big swoop so I have come up with stages that I am going to follow to get myself on track.
Stage Pink: Where am I? (or figureing out my situation)
Stage Blue: Where do I want to go? (or what are my goals)
Stage Orange: What can I change? (or evaluating my budget)
Stage Green: What can I do to reach my goals? (or setting up for the future)
At first I numbered these stages, but I don't think these stages are the sorts of things that go step by step. I think that stages must be revisited on a regular basis.
Maybe once or twice a year you need to hit up Stage Pink to reevaluate where you are at financially and personally. Also, as life changes, so do goals--so Stage Blue will need to be hit up from time to time as well. A budget needs to have to pull and give so Stage Orange will probably be on my mind frequently. Also, as goals change what needs to occur to reach them will change. Stage Green also might be considered more and more as a portfolio grows.
ChickCents will work these Stages and will give a plan to obtain your personal financial needs. I am going to approch these stages as levels on a spiral going towards financial freedom. Depending on your situation, you might work through the steps in each Stage faster or slower than me. Take your time and have fun!
Stage Pink: Where am I? (or figureing out my situation)
Stage Blue: Where do I want to go? (or what are my goals)
Stage Orange: What can I change? (or evaluating my budget)
Stage Green: What can I do to reach my goals? (or setting up for the future)
At first I numbered these stages, but I don't think these stages are the sorts of things that go step by step. I think that stages must be revisited on a regular basis.
Maybe once or twice a year you need to hit up Stage Pink to reevaluate where you are at financially and personally. Also, as life changes, so do goals--so Stage Blue will need to be hit up from time to time as well. A budget needs to have to pull and give so Stage Orange will probably be on my mind frequently. Also, as goals change what needs to occur to reach them will change. Stage Green also might be considered more and more as a portfolio grows.
ChickCents will work these Stages and will give a plan to obtain your personal financial needs. I am going to approch these stages as levels on a spiral going towards financial freedom. Depending on your situation, you might work through the steps in each Stage faster or slower than me. Take your time and have fun!
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