Way to Go Mom!

In a previous post called "The Crazy Ideas You Get When You're Penny Pinching"

I talked about thinking creatively for times when there isn't enough funds to buy what you need. For example in my situation I ran out of conditioner and the conditioner in Costco's coupon book was out of stock. So instead of buying a different brand at regular price I went home and looked through my travel bag and found a bottle filled with a good amount of conditioner to get us by until Costco got a new shipment.
SO.....when I got this e-mail from Mom this week I was so excited I wanted to share it on my blog.

"I tried to post this on your blog but it wouldn't post.  I just wanted to thank you guys sooo much for your inspiration.  I ran out of contact lens solution and I remembered your blog about being out of shampoo.  I went straight to my travel bag... problem solved.  I don't have to use money I don't have for this month and I'll get by for the next few days.  (Plus I won't buy the extra things I might have also picked up while purchasing my solution.. I have a long way to go).  Keep it up guys!!!

xoxo

Mom

Yay! So proud of you Mom. On this note, Shane and I are still newly married. We don't have every house hold item. I wanted a soap dish and a spoon thing where you rest your spoons while you're cooking. I could have gone to the Goodwill but I took a look around at what I had and I found my old Tea Set. I took this little boat that holds the sugar and the cream to use as a soap dish and I took the cookie plate to use as a spoon dish. I loved to play with that Tea Set as a little girl so everyday when I look at my items, it brings back good memories of my Tea Set.
here are some of our updates:
Our electricity bill last month was a shocking $135.00, this month it went down to $119.00, we're hoping it will continue to go down to under $100.00
I haven't made fresh squeezed orange juice since that last post, I bought $  Simply Orange Juice from the Bottom Dollar.
We've decided to sell the MacMini which is an apple computer the size of a C.D. with the thickness of five stacked on top of each other. We bought it for about $700.00 in January and we're hoping to receive enough money from the sale to buy one of those professional cameras with the lens. Or road bikes.

There Will Be Disputes about the Envelopes

 This week I wanted so bad to eat at Panera. I was really sick last Tuesday and I was talking to Shane about whether or not it was ok to use money from the Entertainment Envelope to eat at Panera because we were at ZERO dollars in our restaurant envelope. He said NO. I was like, “but I’m really sick and it would make me feel better.” He said NO. I tried again, “But there’s only one more weekend left in the month and we’re not doing anything expensive so I know there will be money leftover in the envelope.” He said NO. Then I do what my 4 year old niece did when she was 2. I put on a face of painful desperation and whined “PLEASE” When Shane said No again I said please right after that and again and again. I lost that battle but I understand why Shane was holding his ground and I knew he was right. We had spent all that there was in the restaurant envelope, and we’re not going to be successful if we give into any temptation we have. This little tantrum took place Tuesday and Shane knew that I was going to Panera on Saturday with the women from church so that’s another reason why he didn’t cave in.
I didn't do very well with the envelopes toward the end of the month. We went $17.71 dollars negative in the Groceries, and 6.33 dollars negative in the Blow Money Envelope. We had $41.84 dollars to spare in the Gas Envelope, and $56.02 in the Entertainment Envelope. Last night when we looked over all our envelopes we decided for the next month that we are going to have to add more to Restaurants and Groceries, less in Entertainment, less in toiletries, less in Gas, and add a new envelope called Personal Envelopes.         
Now this new idea is Shane's. He wants for each of us to have our own $20.00 to spend on anything guilt free. He is going to use that to save up for his video games, occasionally buy lunch at Subway or I could use it to get my nails done. As he was explaining this new concept I said..."But that's what the blow envelope is for, and that's what the restaurant envelope is for, or Entertainment." Then his logic was, our envelopes are for our family and video games are not entertainment for the whole family nor is going to the nail salon. We're going to try it. If this new envelope works out we will keep it. I still think it's considered Blow Money and maybe we can just say that the Blow Envelope should be split in half for each of us to do as we please with our own half of the money.
Dave guarantees that there's going to be fights when you first do the budget together and create your envelope system. When we didn't agree on certain details we began to bicker, and started speaking forcefully trying to push the words out through clenched teeth. One would say, "you're not on the same page as me," while the other would get frustrated because their logic was misunderstood.  Getting this envelope system straight was pretty tough on us. Luckily,our meeting didn't turn into a serious fight when we didn't see eye to eye because we're not stubborn with each other or too proud to say sorry. We had to be patient and realize that after one is done giving their suggestions then the other can layout ideas too. In the end we got every one of our concerns taken care of and we ended our heated discussion on a good note because we went to bed cuddling.

About My Blog in a Nutshell

Dave Ramsey is our man! He doesn't believe in debt. He was super wealthy at 26 years old,    

   net worth 4 million but he had loans, credit cards, everything that led him to bankruptcy. 

    He and his wife struggled so hard to get back on their feet they decided to never be at the 

    mercy of these debt providers, and loan suppliers. He says that credit scores should be called debt scores. It doesn't matter how much money you make, your FICO score and credit card report are all about how well you can manage debt. These credit card companies have gotten so good at brainwashing you to think that it's normal to have debt making you want their debt cards. Everyone thinks it's normal to take out student loans, loans for cars, but it's not true. YOU MUST BE IN DEBT IN ORDER TO BE APPROVED in this world. We say, NO THANK-YOU!! Shane and Ericka will not PLAY THEIR GAME!! It's a major scam and we are so grateful to be taught by Dave Ramsey not to owe these people money because when you do, you are a SLAVE TO THE LENDER. We are practicing to buy absolutely everything in cash, how to save up money to make it grow through investments and mutual funds in order to purchase everything we could ever want in CASH!

     Our goal is not anything extravagant or charitable, we just want to be rich and take vacations, live in a nice house, drive nice cars, take care of our parents, retire early, and just live a comfortable life in San Diego, CA.       THE END

Spendy Sally vs. Savey Susie

This week was pretty hard, I had difficult battles with my spending and saving angels. Spendy Sally was like, “just buy it, who cares if the envelope is empty borrow from the entertainment envelope.” Or she’ll say “Don’t worry about it, you’ll make it up next time you get paid.” It’s just so hard to ignore her and listen to Savey Susie because she says, “Don’t buy it, yes the item can be handy to have, but you don’t need it today.” Or she’ll say, “If you don’t listen to me you’ll never be able to learn how to save and get rid of your bad habit to buy on impulse, which leads to debt.”

Dave’s Five Keys to Gaining Power Over Your Purchases is:

1.     Waiting OVERNIGHT before making a purchase

2.     Carefully considering your buying MOTIVES. No amount of STUFF equals contentment or fulfillment.

3.     Never buying anything you do not UNDERSTAND

4.     Considering the “OPPORTUNITY COST” of your money

5.     Seeking the COUNSEL of your spouse. (If you’re single ask someone to hold you accountable for your expenses)

Today I decided to run errands again. On my list I had to pick up dry cleaning, mosquito repellent burners, and I thought I’ll just get some bread from the grocery store but that’s it. That is all I’m buying I shouldn’t spend more then $10.00. I head over to the dollar tree and that store is AWESOME!!! Now that I’m thinking cheap there’s all kinds of good stuff in there. As I’m looking for the mosquito things I pass by the Halloween decoration and grab this, this, and that. Then I go down every single isle and I grab a fruit cutting board which is on my list. Chips, cookies, 3 gifts for my dog, a napkin holder (also on my list), I manage to get everything else except what I came there for. So my Spending Angel, Spendy Sally is telling me to get all this stuff but Savey Susie says, “STOP, Take a look at what you have and how much is left in the envelopes. You have things that can wait to be purchased when you re-fill the envelopes on pay-day.” “So take half of the 15 items in your cart, put them back and I will only allow you to get what you need for the party tonight which can be purchased from the entertainment envelope since it is a weekend entertainment.” I ended up spending $4.63 for everything rather than $15.00 and Savey Susie wins that round! Ding Ding Ding Ding Dingggg. Next I needed to buy 1 loaf of bread. When I go into the grocery store on my way to the bread I pass by cans of sloppy Joe, I pass by the chips, and the ice cream, I see the hamburger buns I need for sloppy Joes, I also buy Mexican cookies, orange juice, eggs, until finally at the very back of the store where they hide the bread on purpose, I got the bread I wanted and went to pay. This time Savey Susie lost. I didn’t need the sloppy Joe because I had hamburger helper at home, I didn’t need hamburger buns I could have used loaf bread, I didn’t need Mexican cookies, and looking back on what I bought, I really regret not thinking it through this time like I did at the dollar store.                                          Advice for next time: Do not shop when you’re rushed and go straight to the item you’re looking for.                                                                                                 

Answer to Questions

 Our beautiful sister Azure had some really good questions 

1.     How do you budget for the items on the right? Do You just carry over the envelope amounts from the previous months?

a.     Yes, we do carry over the envelopes amount. For example clothes. When we sat down to think about how much money we were going to give each envelope we looked at clothes and tried to remember how often we shop for clothes and we also took into account our budget to see how much money we had leftover after paying tithing, savings, rent, utilities. Lets say we had $1,000.00 leftover so we divided that up into Entertainment, Gas, Groceries, clothes, housewares, gifts, cosmetics, haircuts. Ok, after we got that divided up, we gave ourselves $77.00 dollars for clothes, each getting about $38.00 a month. The list on the right under CLOTHES/SHOES has more items then $38.00 worth, so if I want to buy my $89.99 Steve Madden shoes I’ll have to save my share of the clothes envelope for 3 months in order to afford them. Which is pretty ridiculous because I need other things and I can’t wait a whole year to buy all that stuff if I took that route. My purpose of listing the expensive Steve Madden Shoes is so I can find them cheaper on-line or at Marshalls, Ross, T.J. Max and post the cheaper price compared to the $89.99 price.

b.     Another example, we need free-on and a new window motor for our civic but we only budget $58.00 a month for Car Repair/Tires. So the motor costs $75.00 dollars at a junk yard (note: we’re buying it used)  and we have to add in the labor costs so we’re thinking $150.00 total max. We’ll have to save 3 months worth to pay for the total.

c. With the digital camera we'll have to take whatever is left from the blow envelop every month until we've saved up the correct amount.

2.     What is the title of the Dave Ramsey CD/book? Are you still attending a class or 
just doing the workbook and listening to the c.d.'s

a.     The books and c.d. titles are located on the right, along with his website link. We are still attending class, at the local Christian church down the street. It’s a 13 week course and we are on the 6^th week going onto the 7^th and the course will end some time in November. We meet at the church and they own the teaching kit which comes with DVDs of the seminars he gives live. We watch one seminar every Wednesday and it’s always a different lesson. This past Wednesday he gave a lesson on Insurance. He told us which kinds of Insurance are a bunch of bull and which kinds are smart to have and he explained that life insurance is not permanent like we all think it is. I do listen to the c.d.’s in the car so I can a very good comprehension of what he's talking about, and if anyone wants to borrow them and burn them, you’re welcomed to anytime.

3.     Are you guys vegetarian? (from Blog "Penny Pinching in the food dept.") 

a.     No, I picked out the meat from the soup so I could put it in the rice to have a meat with rice meal, because we didn’t want soup for dinner and we didn’t want rice by itself, and we didn’t want to go grocery shopping because of insufficient funds so we just picked out the meat to mix in with the rice to attempt to make a dish.

4.     The Cherry Blossom Festival:
That will be awesome if you come for the cherry blossom festival, and we’ll be able to budget that in somehow. I’m thinking we’re going to have to add a separate envelope for this and calculate how much we might spend on food, hotel, transportation, and souvenirs. Oh, and how can we forget? Tickets to see the different historical sites. So we’ll have to research prices for the attractions, and call Dave Keithly and ask if we can crash at his place for free! :) Hehe.

5.     Christmas budget: is a combined budget with gifts for all year round which means we’ve estimated how many gifts we give including: baby showers, bridal showers, weddings, Christmas gifts. Along with gifts we put Christmas in the same budget so we can budget for food, decorations, traveling, gifts, a Christmas tree, whatever. This year since we started to budget for Christmas in September we wont have enough to get us to CA or have spending money while we’re there. If we had budgeted for a Christmas trip since January then it would have been more of a possibility. SO you don’t have to plan your trip around us.

     

    

Goodwill Hunting

 I'm not talking about the movie, I'm talking about selectively looking for useful things at the Goodwill thrift store.
Today after work I ran some errands like going to the cleaners, grocery store, sewing store (to replace a piece on my machine), and I decided to stop at the Goodwill to see if I could find the items in my  list of short term stuff (located in the column I have over on the right). I was looking for loaf pans, pie slicer, or a fruit cutting board. TWO HOURS later....... I'm still at the store in the kitchen Isle talking myself out of buying things I know are not critically neccessary. I was thinking......."We need these little plates because ours are too big therefore not ideal to use for dessert". Although I bought all kinds of interesting stuff, I managed to find ONE item on my list which was the loaf pan.
Don't forget, I use the envelope system and I pulled out money that I had in my envelopes in order to purchase these items. Click Here to learn about the envelope system 
Envelope Houseware: I bought my loaf glass $2.25 and a magazine holder $2.25 (I'm really up-tight about having a place for everything, and now that Shane is recieving Surf magazines, they're everywhere making the house look unorganized. So I found a cute little basket to be their new home.)

Envelope Gifts (including Christmas): Oh yeah, we have an envelope for Christmas so it doesn't sneak up on us and wipe out our checking account. We estimated about $1,080.00 for gifts and christmas so about $90.00 a month. Plus how can we afford Christmas when around that same time of year the city wants their Property tax money? I say we should all move to Florida because I heard they don't pay city taxes. In the picture I have stocking hooks @ $.87 each, Christmas and Halloween wreaths at $2.25 each, snowmen candle holders @ $2.25

Envelope Blow Money: This envelope is for miscellaneous items that you don't prepare for in your budget. For some parents it could be soccor pictures. In our case it could be books for leisure  or Softball team fees. Today I just bought miscellaneous items for the house. Here I purchased a beautiful ceramic cream leaf vase @ $8.25 It wasn't something I needed but I wanted to replace this ugly green vase I was using before. 





I bought this cute serving platter $4.25 to replace my cheap yellow plastic one. 



I also bought this gold picture frame because most of the ones we have are the same style and colors. I plan to regift one of those picture frames.

Last I got this gift $2.25 for my friend Becky becuase she shops at Wal-mart and I thought it was really cute. Now if you're wondering why I didn't place this in the Gift Envelope it's because it's not for her birthday, or christmas gift it was a "being goofy" gift. It would be a great white elephant gift too.

Finally, The Baby Steps!

Click HERE to see the baby steps
In an earlier entry where I blog about the junker car we purchased instead of a brand new Honda, Pilot I also said that we had about $6,000.00 in savings, and a $10,000.00 bonus on the way. Is anybody wondering what we did with that money? Well guess what?
I will be giving you an insider's exclusive. We ended up only receiving $6,848.23 from the bonus because of government taxes (go figure! apparently we'll receive the rest of the bonus at the end of the year) SO, we now have roughly $12,848.23. Imagine that? What kinds of things would you have done with $12,848.23? We were thinking...... Ireland in July and New York City for New Years Eve. Yeah, that's what we WERE thinking before the Dave Ramsey class.
Here's the after math. Dave has 7 financial Baby steps to set you for life! We took that money and put it into  

Baby Step 1: $1,000.00 (has to be easily accessible) emergency fund. 

                        -The reason why you'll want this emergency fund is to prevent you from putting it on the credit card if an emergency were ever to occur. It makes complete sense, if you're already in debt and do not have the money to pay for this surprise emergency whether the car broke down again, or your refrigerator leaks and floods your house, then you're sinking yourself into more debt by having to put that expense on the credit card. SO, make sure the cash is easily accessible but not a temptation to grab for non-emergencies. Shane and I have ours in cash, not in the bank (in case we were to have any problems withdrawing it). Don't think you're getting the insider's exclusive as to where we hide it.
Baby Step 2: Pay off all your debt with the debt snow ball
           -This is what we mean by snow ball.
This was our debt: Master card 1: $343.00     @ 16% interest
                             Master card 2: $1,600.00   @8% interest
                             Student loan 1: $2,600.00   @34% interest
                             Student loan 2: $6,660.00   @0% (til 2012)
                                                             Visa 1: $100.00
                                              Visa 2:  $300.00
Many people would approach this by paying off the the bill with the most interest. Well that's wrong! (in the snowball method). You want to pay the lowest bill no matter what the interest is. If you can pay more than the minimum payment that is excellent too.

    

            Visa 2: $100.00                 minimum of  $15.00 a month
            Visa 1: $300.00                                          $15.00 a month

Master card 1: $343.00     @ 16% interest        $15.00 a month

Master card 2: $1,600.00   @8% interest          $25.00 a month

Student loan 1: $2,600.00   @34% interest        $232.00 a month

Student loan 2: $6,660.00   @0% (til 2012)            no payment until 2012 

In the snowball, you pay the minimum (or more) for each bill until the lowest bill Visa 2 $100.00 is paid off. We actually payed $50.00 a month for the Visa 2 bill. We carry that $50.00 over to Visa 1 $300.00 so our payment to that Visa 1 is $50.00 + $15.00 (min payment) = $65.00. Remember, you're still making the min payments to all the other bills too.

Then when Visa 1 was payed off next is Master card 1 $343.00 and we take the $65.00 we were paying on Visa 1 and put it toward Master card's min payment of $15.00 to = $80.00. Then we take out that bill faster. Then we take the $80.00 to Master Card 2's min payment of $25.00 a month and we have $105.00 to pay off  the $1,600.00. Does it make sense? the reason why you want to pay off the bills from least to greatest is because it boosts your hopes that it will be possible to pay off all your debt. 

That was a long explanation. Lucky for us we just payed off all those bills using the money we saved up. Now we've completed Baby step 2 we took the rest of our money and applied it to                                   

 Baby Step 3: 3-6 Months Expenses in Savings                                                                                                                 -If Shane and I were to be un-employed for anywhere from 3-6 months we do not want to rely on credit cards to bury us in more debt. We would need cash to hold us up through this tragedy if it ever were to happen. Looking at all our expenses, our rent, utilities, cell phone bill, clothes, groceries, transportation, we need about $23,000.00 to survive if we ever were to be un-employed for that long. After paying off our debt a total of $11,603.00 we were left with $1,245.23. We put that into Baby step 3, $23,000.00 - $1,245.23 = $21,754.77 more to save up in order to have our 6 month expenses in savings! And that is where we are right now. If we were to put away $500.00 every month it would take us 3 1/2 years to get the full $23,000.00. Listen, this process is not a get rich quick. You need to be patient!
Baby Step 4: Invest 15% Of Income Into Roth IRAs And Pre-Tax Retirement Plans
                -When I get to that class I'll tell you about it.
Baby Step 5: College Funding

Baby Step 6:  Pay Off Your Home Early
Baby Step 7: Build Wealth And Give!