(From Nov.)
Its the first on the new month! Time to tally up last month and see how far we got! It didn't all go as stellar as I had hoped. But the most important number of everything I can tell you is this: $434.55. We paid $434.55 more this month towards our debt than we would have before we started this money makeover. That is not to say that is all we paid. We actually sent in a total of $935.79 including our minimum payments. Which means we now stand at a total credit card/car debt of $23,725.13.
I'm not gonna pretend that's awesome. But its certainly better. Especially when you consider that, just as I feared, we were hit with a double whammy this month in terms of car issues. Every time something acts up we seem to leave the repair shop down another $350. This month that happened twice, though the second time was a doosey - about $520. This last year we put away some extra money into our emergency fund to use when things like this came up. But being three quarters through the year at this point, we have already burned through most of it. Plus, I wanted to follow Dave Ramsey's advice of not keeping more than $1000 on hand so as to help light a fire under your debt motivation butt. Thus, $159.91 of the extra we paid off this month came from throwing in our "excess" savings.
Additionally, Ramsey makes the point that regular car maintenance and repairs are not really emergencies usually, but rather something you should be budgeting for. Given that out newest car is 8 years old, I'd have to agree with that to some extent. Twice in one month is a bit ridiculous (though it was only once for each car) but Quicken tells me that we spent $2453.88 last year on car repairs/maintenance and we're never really all that surprised when we need to bring in a car for some reason. I think it was a little higher last year given that my daughter's car was at the end of its life and luckily we no longer have that vehicle. Still, I decided that its something we should probably start budgeting for instead of always dipping in to the emergency fund. So I added a line item for it in our budget, which is unfortunately going to push off our debt end date by at least a month. Better to know about it now that be dejected by it later I suppose. And motivation for being able to get newer cars at the other end of all this!
Another thing that makes me feel not too bad about all this is that my Excel spreadsheet shows we actually brought in negative money this month. That's right, we actually had about $1300 less than we needed to cover all our expenses this month, and yet we still managed to reduce our credit card/car debt by 3.8%. Quicken also tells me that on average, we have spent about $1500/month on misc expenses and another $325/month on entertainment expenses this past year. This month though, we cut our misc expenses down to $471 and our entertainment down to $267. That's a 60% reduction, and I feel like it means we are serious about this, despite some hesitations.
It makes me realize as well that though the $1300 short fall probably would have happened no matter what, in previous times we would have just wondered what happened. Not being aware, we certainly would have dug ourselves in even further and made no additional debt progress what so ever. We may have even had to break out a credit card for that second car repair, thus again wiping out a considerable portion of what we paid off in the year leading up to this. Instead, I feel very aware now of just where our money is going and how it tends to get away from us. And we avoided more debt.
Our other biggest expense this month was groceries: a whopping $1700 got spent this way which was even more than the absurdly high $1250 I had initially budgeted for it. I think this will absolutely be lower next month. For one thing, there are only 4 grocery days instead of 5 next month. For another, I am getting better at finding less expensive substitutions and planning some things around what we already have. But mostly, I think we have already stocked up on just about everything possible from the discount wholesale store we have started doing half our grocery shopping at. We started shopping there at the beginning of Oct and it has taken longer than I thought it would to make the switch over. Each time you buy something in bulk, you save on the cost per unit, but you spend even more initially on the cost over all, since you're buying 4 times more. That added up a lot more than I realized it would.
If my home business continues to be sluggish, these next few months until Feb. are going to be hard. Especially come Dec. when my back child support finally ends (though Dec tends to be a good month for my business). That's about $500/month we are going to have to learn to do without. But come Feb, we should get a nice tax return. Then in March my husband's bonus will come, and if all goes as expected, in Apr. he should be getting a nice promotion, which will permanently make up the child support difference. Our goal at this point is still to be done with this step by the end of 2013. And then on to baby step 3!
(Number) Crunch Time!
December 13th, 2012 at 03:48 am
December 13th, 2012 at 06:59 am 1355381981
December 13th, 2012 at 02:35 pm 1355409308
December 13th, 2012 at 03:15 pm 1355411751
Like LuckyRobin, I make almost everything from scratch. Yes, it takes more time initially, but I usually end up with several meals worth of leftovers that I rely on on days when I'm too tired or rushed to cook. I make a fresh salad, warm some bread to go alongside, and it feels like a brand new meal. Many things, particularly soup, chili and lasagne, actually taste better the next day.
Planning ahead for those nights when you know you'll be too tired or rushed to cook will save you bucket loads of money. It's easy enough to freeze small quantities of leftover food that you can then pull from your freezer and defrost on those nights.
December 13th, 2012 at 06:18 pm 1355422713
That's more than $15,000 a year saved. That's a maxed out 401k (before taxes). Or two maxed out Roth IRAs and another $4,000+ toward debt. Or a new car. That's a lot of money.
So shoot for $500 a month instead. it's still a lot closer to reasonable than $1700 a month! That's nearly $60 a day; nearly $425 a week. You could eat out almost every single day for that much money. That is a LOT of money.
December 13th, 2012 at 07:12 pm 1355425951
December 15th, 2012 at 04:14 pm 1355588072
For reference, food stamps is generally something like $700/month for a family of four (depends on region). It might be more realistic for you to aim for $800/month or $1000/month to start, and then to just slowly whittle that down over time. I think slow and steady change is usually more beneficial and useful. It's not like you are going to realistically going to be able to cut your budget in 1/2 or 2/3 overnight. Any improvement will help you and motivate you. We personally have tons of room for improvement, which is how we deal with rising prices. The more grocery prices rise the more we strategize to cut costs. It is something we have been working hard at for 11 years and are always improving upon. I think that is the mindset you need to get into. It is very possible, but take it one step at a time.