A New Budget Month is Upon Us

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It's the last day of August (how did we get here already???), which means that another budget month is coming to a close, and a new month is upon us!  I'm a bit of a geek about our budget, and when I actually follow it, it works really well and we are able to save some money!  I've switched things up in the last month to make it even easier for me. 

This is the way I used to budget.  It was long and complicated and involved way to much moving of money during the month (it was all automated, but still, lots of money moving around).  Also, because I worked off of my pay dates, my month didn't follow a calendar month, which tended to confuse things just a bit. 

One of my favorite blogs is Six Figures Under.  I love how transparent she is about finances, and they have used their budget to do amazing things to pay off their debt!  She often talks about how they live on last month's income.  This intrigued me, but I never thought I needed it because we don't have the irregular income that her family does.  We get regular paychecks that are usually the same amount, unless my husband works overtime.  That and his occasional third paycheck (he gets paid every two weeks) were the only variances. 

Then, I started listening to the YNAB podcast (available here).  He also talks about living on last month's income.  Then, suddenly, one day I realized that it would make sense for us to live on last month's income.  And we had enough in savings to be able to do that and still have a nice cushion. 

So, last month I switched.  And it was glorious (hey, I'm a budget geek.  I can say glorious!). 

Here's the new system.  A few days before the end of the month, I transfer a budget month's worth of expenses from our general savings account to our online checking account (we have a local checking account and two savings accounts, and an online checking account and 11 savings accounts - more on that in another post!).  From there, the amount we need for spending is forwarded on to our local checking account, and the rest is divided up among our "sinking fund" accounts.  By the first of the month, when our mortgage is automatically withdrawn from our local checking account, all the money is there. 

As we get paychecks or any other extra income throughout the month, I transfer them directly to our general savings account, to be used the following month.  I record that income in an Excel spreadsheet so I can see exactly how much we have to work with the following month.  

Tracking expenses is, of course, key to the success of a budget.  I find that if I stay on top of it, it literally takes me less than five minutes a day to accomplish this.  When I get up in the morning, I get my coffee, sit down at my computer, open my bank accounts online and pull up my budget spreadsheet.  I record any expenses or income we had the day before.  Voila.  Tracking done.  With few exceptions, all of the actual moving of money between accounts is done automatically, so I also make sure this happens on schedule and then track it accordingly.  If it's a payday, I set up those transfers to savings.  Easy peasy. 

This month, the expense tracking will be made even easier.  I have switched our budget from Excel to the free version of EveryDollar.  It's essentially the same as my spreadsheet, but it has an app so I can track spending on the fly with my phone.  I like to have redundancy when I'm trying out new systems, so I'll still keep my budget in Excel, but I won't track daily expenses - I'll just go back at the end of the month and put down the total spending in each category.

There you have it - our (very long) budget update.  What's your favorite budgeting tip? 

Why I'm Not Buying Books This Year

Since before I could read, I have been a lover of books.  I love to read them, I love to collect them.  I feel a great comfort in life, knowing they are there.  I suspect this has something to do with the fact that I am the daughter of two librarians.  Well, my mom didn't come to be a librarian until later in life, but she was an elementary school teacher before she was a librarian, and I grew up in a house that had wall to wall bookshelves in the living room.  And they were FULL.  As a young adult, I had wall to wall bookshelves in my spare room, also full.  I was surrounded by books. 

Now that I'm older, with a family and a fairly small house, my space for physical books has been greatly diminished (all I have left is the bookcase you see above, which has five narrow shelves, plus a few small piles here and there).  But that's ok, because I have almost completely made the shift to digital.  Back in the fall of 2009, I got my first iPod touch, and discovered the Kindle app.  Then I discovered the websites that notify you about the free Kindle books.  And I was hooked.  A year or two later I got an actual Kindle and I never looked back. 

Fast forward to today.  I still pick up a few physical books each time I work the library book sale (I serve on the Friends of the Library Board), but really I only read physical books when I'm camping.  There's something so relaxing about sitting by the river with a book and a cold drink, and I don't have to worry about getting sand in my Kindle.

A month or two ago, I was scrolling through my book list, and I took notice of how many unread books I have.  You guys, I have more than 2,600 books/short stories for my Kindle, and I've probably only read a few hundred of them!  Then I thought about how many unread books I paid actual money for - probably only a few hundred of those, and most of them only cost a few dollars each, but if I don't read them, that's money down the drain.  I still get tons of books for free - I get daily emails from Bookbub and pick up the ones that look interesting, plus I get a free book each month because I'm an Amazon Prime member.  And, I realized that most of the time now, I'm reading books I've downloaded from my fabulous library's Overdrive service, and not books I've purchased (free or otherwise) through Amazon. 

After thinking all that through, I made a decision - I'm not going to buy any new books this year (exceptions:  I'll need to buy whatever we're reading in Bible study, and I may pick up a souvenir book or two on my summer vacation, as that's the kind of souvenir I enjoy most. I'll also buy a few books as gifts for children), but other than that, I'm not paying money for books.  No new books, no used books, no e-books, no cookbooks (gasp! that idea just fully hit me).  I'm going to read what I have and try to catch up a little.

There will be times of temptation, for sure - Lisa See has a book coming out in March, but I've already recommended the e-book to my library which automatically put it on hold for me.  I'm sure they'll get it.  If not, it'll go on my Amazon wish list and I'll get it in 2018.  I'm hoping Kate Morton, my other favorite author, doesn't have one come out because two in one year might be too much temptation! 

So there it is.  My no-book-buying pledge. 

Have you stopped buying anything this year?  If so I'd love to hear about it!

January Budget Recap

I tracked our spending very closely last month. It was the first time in a very long time that I've done that and, as always, it was confirmed that if you want to get ahead financially, it's the only way to go.

We went over in several categories. I knew we would, I just wanted to see where we stood with my guesstimates. We overspent on water (oh how I wish our town had an equal pay plan, like we have for electric and gas!), groceries, eating out, miscellaneous, and donations. Still, in the end, I had a tidy sum to put into savings, which I divided among general savings, the car repair/replace fund (which has been practically empty since my car needed several repairs over the summer), and an extra bit toward the mortgage. That was the first extra money I've put into savings in over a year. It felt great!

I tweaked our budget a bit this month to reflect the overages, but I'll still need to watch it like a hawk. Case in point - I hadn't tracked anything, anything at all, for February until today, and I'd spent our entire month's grocery budget by the 10th. And that doesn't even include a few things my mom picked up for me at Costco last week that I still need to pay her for. So we'll be well over our budget by month's end.

I build an automatic cushion into our budget each month. I base our income off of no overtime for hubby (he goes to work a little bit early every day, so there's always some overtime in his checks), and a 40-hour pay period for me. I work 20 hours a week and get paid twice a month, so my checks can range from 40 - 48 hours, depending on the number of days in the pay period. And, our total budget is less than even our base pay. So even when we're over budget, unless we're GROSSLY over budget, we're never actually out of money.

But still, the more I spend the less I can put into savings. And I really like putting money into savings! Oh, if my Grandpa could see me now. Up until I graduated from high school, if I put money in my savings account (which had to stay there till college), he'd match it. I just had to show him my bank statement. I think he matched it twice. Just twice. When I was a kid, money slipped right through my fingers. There was always something I wanted - a toy, a cassette, candy, whatever. If it was expensive, I always tried to get my mom to buy it for me so I could pay her back in monthly installments. That worked up to a point, and then she'd cut me off, telling me that all my money would be tied up in installments forever and I'd never be able to buy anything again. A slight exaggeration, to be sure, but it was a lesson I learned well and I don't fall for those sales ploys today!

So that's where we ended up for January. On to finish February - and on to a better month in March!