Budget. A Dirty Word for Plan

No one wants to talk about budgeting. How to budget. What is or is not in your budget. Or how to budget. But yet, everyone is on a budget. There is only so much money you can spend weekly or bi-week. Important thing to remember:  Budgets are not built in a day. They are drafts that are rewritten as things happen, and as you learn more, as things change.

When I started doing research in how to make a budget, one website suggested taking a month and listing what you spend.  As I went out and did things, I listed in an excel sheet the date, how much and where I spent money. I learned that I go out a lot. I do online shopping at weird hours of the night. And most of all, I waste money.  

So at the end of the month of listing my money I opened a new excel sheet and  I started listing out monthly bills, how much they are, what day they need to be paid on. How many credit cards to I really have? What is my balance? Am I behind? And the more I put on this spread sheet the more I realized that Budget is a dirty word for Plan. 

Since I am currently being paid on a weekly basis. I have my budget planned out weekly from Mid January to the end of April. I decided to plan it out for 4 months because this way I could see when things are paid off, when I can pay more off, and what weeks different bills come due. I like being able to look at my budget and see when my three student loans land on different weeks. Excel lets me change things depending on how much is needed, what takes priority and to color code if I see fit. 

To take the shock off of some of my larger bills I break the payments up. My cell phone bill is $100 a month.  So I use the bill pay feature from my bank to pay $25 a week.  Some of you are probably thinking “wait some months have 5 weeks so won’t you get a head of your payments?” Yes. There are months where my cell phone bill is much less then what it should be because I’ve “prepaid.”  When I get too far ahead I stop auto pay and put that money to savings.

I suggest using a spread sheet when you start planning and to break things up into categories. You can use this template to get started. When you go through your monthly expenses feel free to add or take away rows as needed to get all your expenses represented. 

In this template I listed savings both general savings that includes, travel savings, saving for college/grad school and under cars I have “saving for car repairs/oil changes.” I listed this under Cars Category as a reminder to plan for when your car breaks. A $75 battery can be budgeted around making it tight for a week or two but $600 new tires are easier to handle if you saved for it. Because your battery will die when it is cold/rainy/snowing/when you do not have time for it. It is really important to save for these things.

The professionals say that it is important to set money aside while paying off your current debt because if something happens (knock on wood), you do not have to make new charges on credit cards that you are trying pay down.  Even if $5.00 a week is all you can do, $5.00 adds up. Try to put something away each week for the future.

Saving Pennies: Coins DO Add Up!

When I was little, my family had a Snoopy Bank that sat in our dining room. Whenever you went out and found coins on the ground, you had to put them in the bank. When this bank was filled, we would count the coins together, roll them and then go out to dinner the following weekend. It was a fun way to teach us about saving money.

Now that I’m older and have my own money I’m spending, I do something similar. I’ve started using cash for my everyday expenses (Food, Gas, Dry Cleaning, ect.) and have started saving my coins again. When I started this last year, I was convinced that I wouldn’t end up saving much. In August of last year, I filled my little jar, I had $75.50 in coins. I put the rolled coins in a purse and took them over to the bank and deposited them. I also asked for more coin wrappers, which my bank gave me for free!

What I did with them next amused my boyfriend. After depositing them I went home and moved them from my regular checking account to an ING Orange (now Capital One 360) account I made specifically for saving my pennies. The account has a 0.75% APY Interest rate on it so I ended up earning $0.19 on my original investment.

So after August I started filling my Jar again. I decided near the end of December to count out the coins and roll them to start fresh for the New Year. I was also given a bigger Jar for Christmas for saving my coins. This time I only had $44.00 to deposit. Since this is being put in savings, any money is good money.

Since adding the $44 into the account, I’ve earned a whole $0.14 cents more interest bringing my total in the account to $119.83! Not bad for the coins that could have gotten lost in the couch! I’ve earned $0.32 just by counting out my coins and setting them to work!

Some Banks (like TD Bank) have an in store coin counter that is free to use for their customers. There is a fee for non-customers. TD bank used to have a “bonus” if you guessed the amount of money before hand and were within a dollar or two. 

Many supermarkets also have Coin Star Machines, which charge you to count your coins if you are receiving cash back from them. The Coin Star Machine at my local supermarket will not charge you a fee if you are converting your coins to a supermarket gift card or a donation to one of their charities. The fee according to Coin Star’s website is “Fee for our coin counting service is 9.8 cents per dollar counted in USA; 11.9 cents per dollar counted in Canada. Fees may vary by location.”

If in 2012 I used coin star to count my change, they would have charged me a total of $11.71 to count it! Sure that’s not a lot of money, but it’s my money!

If you’re going to save coins, go to the bank and get wrappers and wrap it yourself. If your bank won’t give you wrappers, Walmart and Amazon and possibly dollar stores sell coin wrappers for around $5-10 depending on the pack size.

My hopes for my large jar is to fill it by the end of the year. I’d like to imagine having at least $150 in it by the end of the year. It may be more it may be less. There will be an updated on this when the jar is full. Maybe I'll make art before wrapping it!

Where to Even Start?

Saving.

Budget.

Debt Free.

Smart Credit Use.

Building credit.

All of those are words and phrases that everyone has to think about, but no one wants to. How do you start saving? How do I make a budget? What do I need in a budget? Debt Free, what does that even mean? I’m so lost in credit I don’t even know how to get out? These are all questions that have crossed our minds at some point in time. If you’re reading my blog, that means you want to start getting your life on a financially responsible track so that one day you can do your big financial goal. 

Before you start panicking, the first thing you need to do is be honest with yourself and with what you have in front of you. 

This was my starting point: 3 store cards with $250+ that need to be paid off, 3 credit cards with $1500+ that need to be paid off. Student Loans that look scarier and scarier the closer I got to the end of the month. Car loan, insurance, cell phone bill. A bank account with a very low balance. Gas prices going up. A boyfriend that lived an hour and a half away that likes going out. 

I lost sleep over that. Everything felt like it was against me. I was 23, out of college working retail. But I was smart, I knew how to use excel. I knew I needed to do something. And I started with google. I started reading different peoples thoughts on how to “snowball” your debt away. How to get this that and the other thing in line. And I started trying.

I think my first budget listed all my credit cards, store cards, student loans, car issues, the total owed on each card and the words “Help me.” An example of what my excel sheet looked like is this:

Debt	Owe	Minimum Payment	due date
Store Card 1	$250.00	$25.00	14
Store Card 2	$250.00	$25.00	3
Store Card 3	$300.00	$25.00	28
Credit Card 1	$1,000.00	$25.00	22
Credit Card 2	$1,300.00	$25.00	3
Credit Card 3	$3,000.00	$25.00	15
Student Loan 1	$2,000.00	$25.00	28
Student Loan 2	$7,000.00	$98.00	25
Student Loan 3	$13,000.00	$113.68	14
Cell Phone	$100 Month	$100.00	14

Listing that out made me realize: Yes I have a problem. Yes I need to do something about it.

Snowball payments: Looking at all your accounts and their interest rate. Finding the card with the highest interest rate and paying that one down first. Then when you pay off that account, moving that payment to the next highest interest rate. So if you are paying $50 on card 1, and $25 on card 2 and you pay off card 1, then the following payment to card 2 will be $75 until that card is paid off. Then continue this down the line of debt. 

When I started paying these off, I took that advice and changed it. Since the 3 store cards had smaller balances I wanted them gone first. I paid the min payment every pay check, while making sure to pay the other bills on time. Once those three cards were at zero, I took that money and divided it among the other cards. Slowly those balances began dropping and I started feeling better.  I will go into more detail about paying off debt in another blog.

I have been learning the hard way how to save money, get out of debt and use credit cards smart. This blog is things that I have learned along the way. Things that I am doing to save money.  I am not an expert in this field, I am only sharing things I have learned and things that have worked for me. I am also sharing my mishaps with finance, short coming with savings. And ideas that I tried . Ask me questions. 

Budgeting is scary, and I'll share what I've learned to do. 

It can be hard to get started saving money, but you can do it!

There are many resources out there. Not everyone will work for you, but keep looking, you will find one that does.