99k by 2011

I used to schedule the bills carefully according to when we got paid. I also set up automatic transfers between our two checking accounts when we were paid to make sure mortgage & daycare tuition payments were ready and waiting when the first of the month came. The problem with this method was if we started to run short of money, I could always transfer some of it back (and often did).

The two debts that are currently scheduled to be paid off last (car loan & home eq) in our 3 year plan, are through our credit union, which we don’t use for our every day checking. So, we have the exact amount of those 2 payments direct deposited into our credit union account, and the payments are automatically taken out when they are due. Everything with those two loans are completely automatic and seperate from our daily banking, which is very nice. Even though these last two debts are somewhat more “legitimate” debts, we are still going to get those suckers gone. (Notice I only say “somewhat more.” I don’t like that debt, and I don’t want that debt, and we don’t plan on ever incurring that kind of debt again. However, in the level of “evilness,” in my mind, those two are less evil than the general credit card debt.)

I used quicken and would enter future transactions (bills as well as paychecks) so that I could see how the next couple weeks would pan out. I would notify my husband if it looked like we would need to tighten things up. However, inevitably, at some point during the month, I would say, “We’re out of money, better use the credit card until my paycheck hits on Thursday.”

It would (almost, but not really) be better if there were some big ticket tangible items we could point to and say, “Look, we have $30k in credit card debt because of X, Y & Z,” but there really isn’t. Our car debt is obvious - my husband is driving that debt around every day. Our home equity loan paid off some credit card debt at the time, as well as finished part of our basement. Groceries, eating out, clothes the kids didn’t really need, and other small items make up the bulk of it. The rest, yes, probably some computer purchases and vacation spending could be found on there. Not that we haven’t purchased some whiz-bang gadgets, but we probably bought them with money from our checking, and then ran out of money early, and would “live” on our credit cards until we caught up.

I guess really, it’s po-taye-to, po-tah-to, because it all added up to the same mess we’re in now.

So there’s the “before” our little “aha” moment. What have we changed?

Lawncare:

Last summer, we had someone mow our lawn for $20 each time. I was growing increasingly frustrated as it seemed to me they mowed way too often, and when they mowed twice in November (TWICE! IN NOVEMBER!) I finally moved “cancel lawn guy” from the bottom of my todo list to the tippy top and got it canceled. We’ll be mowing our own lawn this summer, and saving ~$80/month.

House Cleaning:

We had a house cleaning service come every 2 weeks, and let me tell you, this is a big sacrifice. With both of us working and 2 small children, I’d rather pay someone to scrub our toilets and oven then to spend the few hours we have together as a family cleaning. But we could not afford it, and so we canceled the service. We will be having them come in once or twice over the next few years, especially when we do any entertaining, but it will be budgeted for accordingly. We are cleaning our own house and saving ~$250 a month.

Eating Out:

My husband and I both work, and both used to eat out at lunch. He has always been much better in this regard, bringing in leftovers when he could and eating out only about 3 days per week. I was not nearly so attentive. I, not only bought lunch every day, I usually bought my breakfast on the way to work as well. My eating TWO MEALS out of the house a day cost us probably $12-13 a day. I was spending $230 a month on eating out. Add in the estimated expense of my husband’s eating out (3 days x $8 X 4 weeks) and our eating out was costing us $326/month.

Now, we both bring in our lunches. And if we forget, or want to go out with our co-workers in a group lunch, then it comes out of our own individual “fun money” budgeted amounts. So if I blow $10 on lunch that week, that’s less fun money I can use for the rest of the month. Ditto for my husband. It’s very motivating.

Menu Planning:

BEFORE: It’s the end of the day, I’ve just gotten home from work and my husband and the kids also just rolled in the door. “What’s for dinner?” he asks me. I stare at him blankly, and just shrug my shoulders. “Um… PBJs for the kids maybe?” I might say. “What about for us?” I have no answer. We’re both too tired to try to think about what to make for our sustenance.

This sort of scene no longer happens. Every Saturday we sit down and plan out the week’s menus. We decide who will be making it, what day. We scan through the fridge and pantry and determine what we need to purchase. Sometime over the weekend, we go shopping and get everything on our list. Now, when we come home, we know what we’re having, who’s making it, and we know we have everything we need to make it. We plan big meals for Sunday so we can take in the leftovers. We no longer have “kid dinners” and then eat our dinner later after they are in bed. We sit down and have a family dinner every night.

I’m not saying that we don’t still have surprises where we have to scrap what was planned for something else, but we are planning in advance and our grocery bill is pretty low! No longer are there trips to Super Target where I spend $200 on groceries, clothes, kitchen gadgets, and a miscelaneous toy for the kids and it all gets lumped into the “Groceries” category. We seperate everything out now, and toilet paper and kitty litter goes into “toiletries” and not into “groceries.” Clothes don’t get purchased unless something specific is needed and is budgeted for accordingly.

It’s hard to say how much we’re saving in our menu planning, but I think it’s got to be at least $500/month. Our grocery bill was $330 last month, with about $80 going to toiletries and household (for some reason, I like to keep household seperate. toiletries = handsoap, toilet paper, household = air filters). Not too bad!

All this is adding up. We never use our credit card anymore. Mine is still in my wallet, but I never touch it. I’m thinking about what we have coming up that will need to get paid for and planning ahead for it. All payments toward credit card debt would get eaten up with charges in the past, but now with our budget, goals and debt reduction plan in hand, we can make some real progress.

We had our own “wake up” moment at the beginning of the year and these things would have happened regardless, but I must say, YNAB has been an invaluable tool in really getting our budgeting goals accomplished.

ps- still waiting for our last credit card statement to post. BLARGH.

This entry was posted on Monday, March 3rd, 2008 at 7:37 am and is filed under journey. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.