Thursday, July 26, 2012

Finances: Part 3


I started researching daily. I went to every budgeting and living frugal blog I could find and stalked the Dave Ramsey website. I was becoming obsessed and would stay up at night crunching numbers in my head. I was brainstorming ideas as to how we were going to cut back and live a more frugal lifestyle with a child {heard they’re spendy} coming into the world soon! 

After reading and researching so much I looked around my house. I was living in a world of WANTS. Do I really need 20 different lotions and 56 eyeshadows? I have 13 cans of tomato soup so why aren’t I making any when I complain “we have nothing to eat…”? It became completely insane to me the amount of money I had been wasting. 

So I sat down and started implementing the tips I had learned while Pinteresting, Googling and reading blogs. I first started with a notebook and wrote down all my bills and financial goals. After I figured out our wages - bills + savings + a budget/allowance I discovered we could live solely {but frugally} on one income. So that means I could have been saving my entire paychecks for years now. Shoot me!!! 

Anyways after I got done kicking myself and got all my bills figured out I put together a financial binder. In the binder I deposit ½ of the bills’ sum every two weeks on payday. 
For example, let’s say my total bills per month are $1,000. I would take $500 every two weeks and deposit the money into the correct slots in my binder. For instance, let’s pretend my mortgage is $300/month so that means every 2 weeks I deposit $150 of that $500 into that slot in my binder that says ‘MORTGAGE’.  When the time comes to mail the bills I deposit the $1,000 into my checking account and send all my bills off at the beginning of the month. It really helps with the whole feeling of, “this whole paycheck has to go to bills so I’m broke these 2 weeks.” Ya know? I hope that explains it thoroughly!

After Googling what the average percentage of what was reasonable to save from each paycheck - {10-20%}. We decided we would save 15% of Lenz-pipes’ paycheck and ALL of mine. I am also saving every $5 bill that comes into my possession (saw online that some lady saved $12,000 in 2 years just by doing this!) and all of our loose change. We are saving ALL of my check to pay off my car by the time baby L gets here and really trying to save our butts off so in the spring we can buy Matt a new pickup {he desperately needs one!} by paying strictly cash.

Anyways, after I got the binder all ready to go I began searching for other ways to save money. I organized all the kitchen and bathroom cupboards to see exactly what I had/didn’t have on hand. I felt it would be easier for me to find when we were actually out of something like cream of mushroom soup or conditioner. It was kind of like shopping in itself rediscovering all your old junk.

All this frugal saving has been a huge mental process for me because I’ve been used “retail therapy.” I used this therapy for years on bad days, when I was bored, mad, happy…basically any time. I’m pretty proud of myself though because when I make a Wal-Mart shopping list I write down EVERYTHING I need and revise it 3-4 times. Sometimes when I go through it I find that I can take items off: “oh I can make sandwiches for another 3 days to finish up that lunch meat we have. I don’t HAVE TO buy hot pockets to pack for lunch.”

Some of my friends think I’m nuts when I tell them I live on $200/2 weeks. {Some may think that’s a lot but it truly does go quickly especially living 40 minutes from work}. but I actually really try to live on $100-$150 just so I can save some extra cash.

Here’s how I usually figure my $200:

Gas = $60 usually {$30/ week & I’m even trying to drive less! Some weeks this # is higher.}

Groceries = $40.This is honestly all I like to spend and since I only am feeding 2 it hasn’t been too bad. {although, I have been craving McDonald’s chicken nuggets so bad this week I’ve splurged!}.

There are other things, of course, I have to plan for within this budget too and that’s why I try to stash extra cash away instead of using up my $200. For example: 

+ Cut/coloring my hair {not a necessity but I also have to treat myself too!}

+ Oil changes

+ Friends’ weddings/Bridal Showers/Bachelorette Parties {hotel, food –I totally pack sandwich/snack stuff when I travel now so I don’t have to eat out much!, gifts, etc.}

+ Propane/Car Tires {I don’t HAVE to use this money to pay for these spendy items but I like to see our savings increase, not decrease!}

I highly encourage you to budget if you have felt/feel like I have in my posts on finances. I believe no matter how much money a person makes they should have a budget. You would be amazed at how much you can save when you’re conscience of your money. Like I said, I was spending $1,000 + a month and I had no idea where/how it went. I finally feel like I’m making headway having financial goals and being in control of my money.

Here are some of our financial goals for the curious cats out there:

+ Save enough to have 6 months worth of wages built up in savings in the case of an emergency.

+ Pay off my car by the time Baby Lenzen arrives.

+ Save all $5 bills and loose change.

+ Pay cash for a pickup next spring/summer.

+ Pay off mortgage within 10 years. {I used a mortgage calculator and about fainted when I discovered if we just paid the payments we’ve been making – the minimum amount – we will pay $23,000 in interest by the time we pay it off. NO THANK YOU!! If we pay it off in 7-10 years we will have paid like $7,000 - $9,000 if I remember correctly. I had always said we’d build new after 10 years but you know, I love my house and it probably won’t be necessary. It might need some upkeep since it is 100 + years old but that’s okay, it’s gotta be cheaper than building a whole new house brand new}.

Here are some of the blogs and websites that really inspired me to save, save, save!

Living on less than $28,000/year: The Peaceful Mom

Living on $14,000/year: Blissful and Domestic

Paying cash for their home: Money Saving Mom

Décor/Cleaning Supplies Dupes: Fake It Frugal

Dave Ramsey: Dave Ramsey

I would love to hear your feedback and how you’ve been saving or plan on saving! J

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