Monthly Archives: July 2011

We Got a New Dryer

About a year ago we bought a dryer from a friend of a cousin who was moving and selling all there appliances.  It has always had this weird problem where it eats clothes.  Any silky or fancy fabric or draw stings gets caught in between the drum (that’s what it’s called, right?)and the door.  Very annoying!

A month ago it started squeaking loudly (like the dryer we had before it used to do), but now it’s super loud and even more annoying. 

I was driving to the post office today when a neighbor called and asked if we wanted her old dryer because she got a new one.  I said “yes!’  It sounded like she had mentioned it to Rob, but he must have been to distracted getting ready for the camping trip he’s on right now to tell me about it. 

So now we have a “new” dryer sitting in our backyard.  I am sooooo excited 🙂

Hopefully we can get another year out of it, okay actually hoping for more years, but we are on our 3rd dryer in the 3 years we have been in our house.


Get Out of Debt!

I love reading personal finance books, listening to Dave Ramsey on the radio, and watching anything on Hulu or CNBC about personal finance.

But let me tell you I have a hard time watching The Suze Orman Show.  My jaw drops every time I watch her “Can I Afford It?” because of what she tells people. 

I watched the June 11th episode today and she denied everybody’s plans to spend money when they had debt and not enough savings or retirement, but she approved the last guys $20,000 fishing boat.  He had $94,000 student loan debt and $224,000 in liquid savings along with his retirement.  She commented that the retirement was too low, but didn’t say anything about the student loan he was paying 4% interest on.  She approved him because he had so much money saved away, but I think that she should have approved him and told him to pay off his student loan today! 

Why wouldn’t you pay off your loans if you had the money sitting around?  Why would you keep paying somebody money (interest) if you didn’t have too?  Maybe it’s because I am cheap that I don’t like to pay more than I have to for something I buy (or that student loan that I don’t have).

Please leave comments – I love reading comments 🙂 Do you watch The Suze Orman Show? What do you think about her personal finance advice?  Who is your favorite personal finance celebrity?


Mortgage Payments – Round Up or What’s Due?

I used to work at a bank and people would come in everyday and pay exactly what the bank told them to pay  on their mortgage.  “I need to transfer eight hundred fifty-four dollars and eighty-nine cents from checking to my mortgage.”

Why?

Why not transfer $900.00 from checking to your mortgage or write a $1000.00 check instead of a $955.96 check? 

It’s easier to say, easier to write, easier to budget, and easier to pay an extra $528.48 to our mortgage principle every year. Our mortgage payment is $955.96 but I have never ever written a check for $955.96.  Even before we refinanced last year and our mortgage was $1145 we sent in $1200.  I would still be paying $1200 a month if it didn’t kill me (um…kill my budget) and if we knew for sure that we were keeping our house longer than 2 more years.

I challenge everyone who reads this to round-up their mortgage payments. Bonus points if you send in an extra hundred or more.

Please leave comments – I love reading comments 🙂 Do you round-up your payment or do you spell out the dollars and cents you need to pay?


The Paycheck Guide

I told you last week that payday for us is extremely complicated because of our irregular income and two bank accounts.  I decided yesterday that I needed a way to make payday easier.  So I created The Paycheck Guide and now I can’t wait until payday, okay I can never wait for payday, but I’m super excited to use our Paycheck Guide next week.

Income  $  2,000.00  $  1,900.00  $  1,800.00  $  1,700.00
         
 Paycheck   $  1,086.52  $  1,045.00  $      990.00  $      935.00
  15% 15% 15% 15%
         
 Church   10% + $10   10% + $10   10% + $10   10% + $10 
 Taxes  25% 25% 25% 25%
 Home   $      252.50  $      252.50  $      252.50  $      252.50
 Insurance   $      293.02  $      293.02  $      293.02  $      293.02
 Utilities   $      160.00  $      160.00  $      160.00  $      160.00
 Company  5% 5% 5% 5%
 Savings  5% 5% 5% 5%
 Gasoline   $        85.00  $        85.00  $        85.00  $        85.00
 Groceries   $      112.00  $      112.00  $      112.00  $      112.00
 Medical   $        32.00  $        32.00  $        32.00  $        22.48
 Other   $        25.00  $        25.00  $        25.00  $          0
 Repairs   $        75.00  $        75.00  $        20.48  $          0
 Gifts   $        42.00  $         0.48  $           0   $          0

 

Income  $  1,600.00  $  1,500.00  $  1,400.00  $  1,300.00
         
 Paycheck   $      880.00  $      825.00  $      770.00  $      715.52
  15% 15% 15% 15%
         
 Church   10% + $10   10% + $10   10% + $10   10% + $10 
 Taxes  25% 25% 25% 25%
 Home   $      252.50  $      252.50  $      252.50  $      252.50
 Insurance   $      293.02  $      293.02  $      293.02  $      293.02
 Utilities   $      160.00  $      160.00  $      160.00  $      160.00
 Company  5% 5% 5% 5%
 Savings  5% 5% 5% 5%
 Gasoline   $        85.00  $        85.00  $        54.48  $          0
 Groceries   $        79.48  $        24.48  $        0  $          0
 Medical   $         0  $          0  $        0  $          0
 Other   $         0  $          0  $        0  $          0
 Repairs   $         0  $          0  $        0  $          0
 Gifts   $         0  $          0  $        0  $          0

 

Income  $  1,200.00  $    1,100.00  $ 1,000.00 Cap
         
 Paycheck   $      715.52  $       715.00  $     650.00  
  15% 10% 10%  
         
 Church   10% + $10   10% + $10   10% + $10         –
 Taxes  25% 25% 25%        –
 Home   $      252.50  $       252.50  $     252.50        –
 Insurance   $      293.02  $       293.02  $     293.02        –
 Utilities   $      160.00  $       159.48  $       94.48  $  160.00
 Company  5%  $          0  $         0  $  500.00
 Savings      up to 5%  $          0   $         0         – 
 Gasoline   $         0  $          0   $         0  $    85.00
 Groceries   $         0   $          0   $         0  $  112.00
 Medical   $         0   $          0   $         0         – 
 Other   $         0   $          0   $         0   $    25.00
 Repairs   $         0   $          0   $         0   $  500.00
 Gifts   $         0   $          0   $         0          –

I began by listing what we wanted to spend each month in every category.  In order to pay for everything we want to Rob would need to make $4000 a month, so $2000 became our highest income amount.  I wanted to know what $1700 or $1100 would cover so I listed the income from $1000 to $2000.  The $1000 column, for example, $1000 – $110 – $250 – $252.50 – $293.02 leaves only $94.48 for utilities. Now I now if our income is only $1000 I will only get to utilities and there’s there won’t be any money available to deposit in the company or savings accounts.

Next I can’t write us a paycheck for $2000 because 30% of that amount is staying in the company account, so I added up what our paycheck would be. $10 (church) + $252.50 (home) + $293.02 (insurance) + $160 (utilities) + $85.00 (gasoline) + $112 (groceries) + $32 (medical) + $25 (other) + $75 (repairs) + $42 (gifts) = $1086.52 + 15% (church and savings). 

Confused yet? Let me explain my plan using our last payday.  Our income was $1968.54 so I would us the $1900 column as our guide.  I would put $492.14 (25%) in taxes and $98.43 (5%) in the company. Our paycheck would be $1045.00 + $295.28 (15%) = $1340.28. Leaving $37.69 in our payday savings. The payday savings will be used for paydays when the income is less than $1000. 

The “cap” is the amount I will leave in each category at the end of the month. Some categories like Utilities or Gasoline can have up to one payday leftover and others like Company or Repairs can have $500 leftover. Some categories don’t have a cap, either they will grow until they are used or will always be $0 at the end of the month.  They have “-” instead of a number.

Let me know if you have any questions or advice for The Paycheck Guide.  Thanks


More About Us

We are Rob and Lizzy, we got married December 2003. The only debt we had was Rob’s truck he bought for $5000 in 2002.  We paid it off January of 2004 and have been debt free ever since.

Rob got his BA degree in Construction Management with no school loans, thanks to scholarships and as he likes to tell everyone “Lizzy put me through school”.  I worked full-time as a hairstylist and he worked on Friday and Saturdays in construction.

After he finished school I went to work at a bank and he worked full-time as a Manager, we saved $10,000 for a down payment on our house. Sadly I know we could have saved more if I was more focused.

We bought our home July 2008, a beautiful duplex (it looks like a single family home which I like) Rob wanted to buy a duplex so we could have half our mortgage paid for. Our home appraised for $189,000 and we got it for $159,900! In 3 years we have paid off $19,400 leaving us with a $140,500 mortgage we keep chipping away at. We haven’t decided if we sell it in 2 years or keep it and rent the whole house.

As soon as our first baby was born I became a stay-at-home mom and love it.  I add to our income by doing haircuts and finding savings wherever I can on the things we buy.  Rob was laid of from his job November 2010 and started his own construction company in January. 

I had a wake up call in May when I realized that our budget wasn’t working. We started the year with $5000 in savings, added $6500 ($2000 from our parents and a $3000 tax return) and spent $10,000. Where did $10,000 go in 5 months!? I had to tell Rob, I felt like I had told him we were $10,000 in debt.  He had me add up all our spending for the year (part of that job was easy since I had been tracking it January-March, but I let it slip in April and May).  We had overspent, but it wasn’t as bad as I thought.  We paid $6500 for baby #2 in March, $2500 to start his company, and $1000 was unaccounted for.  It’s that $1000 that stings the most, it left our savings account and vanished. Ouch!

Now we are saving money for our emergency fund, then we will save for a “new to us” car (which we desperately need), baby #3 (the reason we have to move in 2 years), and a trip to Europe (which we have been wanting to go on for 7 years now).

 So there you have it, almost everything about us 🙂


Money Talks

One thing that is important with a family budget is to have Money Talks regularly.  You want to make sure that you are on the same page with your spouse.  We had a Money Talk yesterday about our Emergency Savings.  Here’s how it went:

My husband said that we need to have $5000 in savings and then we can think about getting a “new” car that we desperately need (our cars don’t go out of the state).  I told him that I needed the security of 3 months expenses ($7800) before we think about getting a car.  “Do you know how long it’s going to take us to save $7800???”  Just so you know my husband is the saver, he’s the reason I changed from a spender of every penny to a saver.  But, it is going to take us a long time to save $7800.  If we save $200 a month it will take 28 months! Last month we saved $500, but that would still take us 11 months.  The only way we could have our full emergency fund by Christmas is if we can save $1140 a month!  I told him that because he is self-employed I needed 3 months in the bank, I’m not asking for 6 months ($15,600 wow!), just 3 months.  I won! 🙂


Payday! – July 15th

Payday for us is extremely complicated.  We have two bank accounts: a business one and a personal one.  I have to make sure that the numbers match up, since I’m a numbers nerd this doesn’t bug me like it would my husband. But, should it really take me two hours to get our deposits ready? 

Here’s how the budget looks for the rest of the month:

 Category   Leftover   Deposit   Total 
 Income   $     –    $  1,968.54  $  1,968.54
 Church   $   (8.00)  $     218.85  $     210.85
 Taxes   $  4,182.50  $     489.63  $  4,672.13
 Home   $      –    $  1,000.00  $  1,000.00
 Insurance   $   (326.98)  $     326.98  $        –  
 Utilities   $        8.05  $     160.00  $     168.05
 Gasoline   $     120.37  $      97.50  $     217.87
 Medical   $      56.00  $       32.00  $      88.00
 Groceries   $       31.90  $     112.00  $     143.90
 Company   $     125.67  $       97.93  $     223.60
 Savings   $  1,845.52  $     323.72  $  2,169.24
 Repairs   $      52.79  $      22.87  $       75.66
 Gifts   $       49.14  $      –    $       49.14
 Other   $     (13.97)  $      –    $     (13.97)

If you add up the totals I am $1162 short, but like I said it’s complicated.  We use a credit card to buy the construction materials for the company, and pay it off every payday.  Last payday we used $673 that should have stayed in the company to cover a future paycheck, this payday we had $932 for the credit card, but only $40 on the card. So we add that and a bunch of rebates to our deposits.

Our health insurance bill overdrafted from our savings so I added the $225.79 back with our $97.93 deposit.  The money ran out before Repairs was fully funded so there wasn’t anything to add to Gifts or Other.