Networth and Budget Updates

It’s been a late update. But here it goes.

The crux of the update is that it looks bad. It is actually not bad. There were some unexpected work related expenses for which the reimbursements would probably come in March. So hopefully I will be able to account for this drastic looking failure in March and get back to normal course. In the mean time, hang on!!!

Gas consumption was less. It was because my husband is out of town and didn’t use his car for about 15 days during february. Gifts was overspent. We bought a music system for our house. I can’t believe we had none so far. So no complaints there. We paid the rest of the car insurance in whole. So we don’t have to pay in March. So that is a normal expense. Misc 1 is discretionary spending for me. I have to stop going to craft stores. Utilities is overspent too. It’s because of the overseas calls that I have been making to talk to BB (Let’s call my husband that from now on).

As for as the networth update, the numbers don’t look good because of the unexpected work related expense. But I have not modified the goals for march. It is based on the assumption that we would get the refunds this month.

Weekend Budget Busters

Saturday was a budget busting day for me. My husband being away and me left with nothing to do, I went on a shopping trip to buy some supplies for my new hobby – sewing. My husband bought me a sewing machine for my birthday and I wanted to make doll clothes for my niece’s barbie doll. I didn’t have any supplies. So I had to buy stuff. Saying “STUFF” freaks me out. I also had to buy some sewing pattern books. Anyways, the total damage was a little less than $150.

I was feeling pretty bad about this until I finished the first doll dress. After I finished it, I was convinced that it was worth it. Anything that would bring a smile on my niece’s face is worth everything in the whole wide world. And I’m going to spend each saturday making new doll clothes. I already have enough supplies to make 9 more doll clothes. And I have supplies to make a new dress for my niece.

There were several questions that popped in my head.

• How and when do you identify an activity as your hobby?
• How much money would you spend to try it initially?
• Once you identify something as your hobby, how much money do you put aside each month for it?
• When does your hobby make you think that you can make a living out of it?

I would love to hear from you all about what your thoughts are on this.

On another note, I bought the books at a used book store. They also have an online shop at http://www.bookbuyers.com. Check it out. I love the store.

Jan Budget Updates and Feb Budget

I feel that having monthly budgets works better for us than having a yearly budget. This allows us to allocate money for things that we cannot know well ahead of time.

This is how we did with our Jan budget.

The areas where the actuals were greater than the budget were credit card debt and miscellaneous. I wanted to get our credit card debt to $2000 and hence overpaid our credit cards. It’s a good thing. In fact I think often about paying it off completely. Having a 0% interest on the card is letting me prioritize other things. The miscellaneous category is overspent by $48. I can over look this one since the total of underspent categories is greater than $48. I am extremely proud that we spent only around $100 eating out. It is about 20% of what we normally(??) spend eating out. Overall I am excited about repeating this month after month.

The most important aspect of doing this for us was that it gave us an opportunity to know where our money was going. Not that we were shopping every weekend at the mall nor were we charging our credit cards left, right and center. It’s improved our awareness of how we spend. I think this is the most important step in getting our finances in order. If you look at any personal finance books or blogs, the first recommendation that everybody makes is to ‘Make a Budget’.

We have made a few changes to the February budget. 2 new categories, Gifts and HOA have been added. Food and Miscellaneous has been split into Grocery, Misc 1(for me) and Misc 2(my husband). I plan to bring down the credit card debt by another $500. The Misc 1 and Misc 2 includes any restaurant trips that we make during the month.

Networth update is due on the 10th of Feb. Check back to see how our networth has improved.

Budget 2008

Here is the split of our monthly budget. Along with networth updates, we will be doing a budget analysis at the end of each month. 

 

Being Financially Organized

We are fairly organized when it comes to bills. But I don’t clearly understand what it means to be financially organized.
There are various things we do to stay on track

1) Monthly bill payments – We use a simple excel sheet. It contains a list of bills that we would need to pay on a monthly basis. We look at the sheet twice a month and pay the bills that are due. Most of our bills are online. We update the sheet with the payment date, the amount, confirmation numbers for online payments or check numbers. We calculate the total bill amount paid and make sure our bank balance has money for this plus an allotted monthly spending amount. We have been doing it for almost 3 years now and it has helped us to avoid late payments.

2) Analyze monthly spending – Until recently, we used a tool provided by my online bank account to categorize my spending and compare with an allotted budget. Last week, I went and bought Quicken and we have just started using it. Will update you later on my experience with Quicken.

3) Taxes – For most part, I let my husband do the taxes. But this year, I am going to be involved. This year is crucial because we need to itemize our deductions. We are expecting that we would owe some money to IRS. We need to be more careful about this for the year 2008.

4) Documents – We are very careful about our documents. They are pretty well organized. But we do not file our account statements or receipts. I don’t know the pros and cons of doing it. Any information with regards to this would be helpful. How long to store statements and receipts? Why do we need to store these? Is it okay if we scan and store soft copies? etc.

What are the ways in which you keep your finances organized?

The Food Budget

Our monthly food expenses for the month of October and November total to about $800 on an average. About $500 of this goes to eating out and the rest towards grocery.

Though we knew for a long time now that we were eating out a lot, we didn’t realize how much until recently. We analyzed our monthly spending from the past two months around the first of December. When we looked at it in terms of numbers, it really hit us. So this was the first thing that we wanted to be tackled in our budget.

Out of this $500, 35% was being spent for lunch on weekdays. The past couple of weeks, we have been bringing lunch to work. The intention of bring lunch to work makes us to cook in the evenings, resulting in less eat outs for dinner during the weekdays.

To check our progress so far into this month, I summed up the spending for 10 days in the past couple of months. The first 10 days of each month, we had spent about $170 eating out. For this month, it is so far $30. Though we cook more at home, the grocery bill has gone up only by $15 compared to last month. I think this is a great progress and we need this to go on.

To keep us motivated to do this, we are planning to use the cut down savings from food towards buying the new LCD HDTV. At this rate, we need to continue doing this for another 4 months. We will keep you updated about our progress.

How much do you spend on food every month? How has budgeting helped you reduce your food related spending?