2009, “A Year of Less,” but it was a good thing!

Friday, January 1st, 2010
Now, going into 2010, we have so much more!

In 2009, we were forced to spend more than 2008 on the following bills:
3780.20 Increased mortgage payment 2009 vs. 2008
687.11 Increased property taxes
167.29 Increased electric bill
121.64 Increased water/sewer bill
1.60 Increased trash bill

We chose to spend more in the following areas vs. 2008:
1972.25 Increased charitable giving 2009 vs. 2008
2310.10 Increased educational spending (class tuition)
125.91 Increased spending on books
165.61 Increased cultural event spending (concerts, etc.)
We chose to spend LESS on the following areas vs. 2008:
310.81 Less in homeowners insurance (better coverage, different carrier)
76.68 Less in natural gas bill (weatherproofing measures)
54.24 Less in phone bill (removed unnecessary features)
789.57 Less in cable bill (downgraded plan)
1319.61 Less in groceries
1357.16 Less in dining out
494.78 Less in car gasoline
592.26 Less in car maintenance/repairs (deferring maintenance to buy newer vehicle)
731.53 Less in car insurance (better coverage, different company)
108.00 Less in health insurance (same coverage)
314.75 Less in life insurance (Went from $200,000 in coverage to $2,000,000 in coverage!)
1,080.39 Less in dental work (no fillings needed replacement in 2009)
446.92 Less in eye glasses
439.52 Less in gym memberships (put membership on hold June-Dec)
705.26 Less in clothing purchases
119.87 Less on personal grooming
485.28 Less on consumer gifts (spent more time making personalized gifts)
129.35 Less on assorted online memberships
100.19 Less miscellaneous spending
31.61 Less on crafts
34.93 Less on antiques
416.43 Less on pet care (no "catastrophies" in 2009)
4409.32 Less on assorted household items
49341.29 Less on remodeling
504.90 Less on photography
81.41 Less on cake decorating
1574.84 Less on electronics
995.00 Less on uncategorized ATM withdrawals/blow money
449.81 Less on movies and rental fees
1565.57 Less on travel expenses
277.12 Less on credit card interest fees (stopped using accounts Jan. 2009)

We were blessed enough to have the same income in 2009 as we did in 2008, no cut there. However, because we CHOSE LESS, we freed up $69,338.40 of our income to pay off debt, give more, further educate ourselves and save for the future instead of reveling in consumerism with no lasting gain.

Our big milestones for 2009 were:
18115.76 Paid 2007 Mazda 5 in full!
15000.00 Emergency funds in savings
3259.45 Paid credit cards off in full; closed accounts
5457.63 Paid refinancing costs out of pocket; reduced mortgage interest rate by 2%
2310.10 Completed Project Management certification at PSU

Now we can focus on more goals in 2010:
Pay off Home Equity Line of Credit
Buy Jeremy a dependable used car with cash
Take additional classes at PSU
Increase charitable giving
Raise emergency fund savings from $15,000 to $20,000
Visit family in other states

In 2011 we will see:
Fully funding retirement accounts with at least 15% of our income
Swank European vacation for a reward to our delayed gratification :)

How can this be done? Follow the baby steps:

We started them in January 2009 and have made better progress in 1 year than we could've ever imagined! You can do it to! :)

NYE resolutions: 5 months in…

Thursday, May 21st, 2009
Bad blogger!! Bad! BAD!!! Yes I've been M.I.A. for a while. I've wanted to update but I've been waiting until I get around to posting the new blog redesign, which is still in planning phases, so no one should hold their breath! We are still following Dave Ramsey's plan successfully since January. We have paid off about $5,500 in debt and saved about $25,000 in cash, which will be more like $28,000 by the end of this month (May). We've stayed pretty well within our budget that we revise each month. We are not participating in the recession as you can see! :) As I secure another work project for next year, I'll be paying off my car and saving to buy Jeremy a used car using the "Drive Free, Retire Rich" long-term plan. We have been working on a refinance so we've been piling up cash to pay closing out of pocket on top of our emergency fund. Once the refi goes through, we'll be pounding on walls and refinishing trim like mad men. Can't wait to have a (mostly) finished house! Flylady is going well. Anticipating an appraisal has helped motivate me to keep the house clean. We've really cleaned up the yard including reseeding areas that were trampled during the remodel. Health wise, my new year's resolution was to also start exercising daily, which has been accomplished. I'm down about 9 pounds too so I can't complain. 2009 has been a great year so far!

February budget recap

Thursday, March 19th, 2009
I'm a bit late on updating on the money front, but better late than never. The February budget went great. I also like to use the term "spending plan" as it doesn't sound as daunting or punative. We are telling our money what to do instead of wondering where it went! To recap:
  • $755 extra income through contract work and Craigslist sales
  • Emergency fund is up to $18,800. March goal: $20,000 total
  • Paid 3 mos. worth of car payments in one month
  • Shopped for car insurance. New payment $82.53 instead of $203.66/mo. AND we get better coverage.
  • Transferred home owners insurance. Similar payment but get extra $18,000 home business equipment coverage!
  • Spent $445 less than budgeted. Added extra $$ to emergency fund and car payoff to get close to 0 by month's end.
I've been modifying my tracking spreadsheet month by month for refinement. I know we will never have a perfect budget, but with weekly maintenance and tracking, we get pretty close. If you'd like to see my sample spreadsheet, download it now. This spreadsheet has both a running total budget and a weekly allocated spending plan in one. You will need some Excel skills if you'd like to add new rows and keep the auto-calculations running, but its a really simplistic template overall. Advice is per Dave Ramsey which has you prepare the budget before the month begins and spend every dollar on paper until you reach 0. I use this in tandem with MS Money, which I can download my bank statements to. MS Money tracks spending categories for me to fill into the spreadsheet each week.

January budget wrap-up

Monday, February 2nd, 2009
Month one of budgeting is complete using Dave Ramsey's budget method where we spent all our anticipated income on paper before the month began. We were actually pretty close our first month out and had a $97 surplus, not including the $3K we socked away into our emergency fund. We also paid off all our credit cards from Christmas purchases and took them out of our wallet. We are debit/cash only and loving it! Watch the documentary "Maxed Out" and you won't want to support creditors any more. We didn't estimate correctly in our food categories. We needed to flip flop the categories as we spent more in groceries than I initally budgeted. However, we equally spent less in eating out. This is a good thing overall as the main food cost was within limits. I think we can refine this further if I can use all our groceries before things go bad. Meal planning and preparation will be a work in progress. We also sold a number of items on Craigslist, returned unused items to stores, cashed in rebates, and received a large weatherization incentive from the Energy Trust of Oregon related to insulating our home during phase I of our remodel. We made an extra $1600 in unanticipated income in January after all is said and done. If we are on track, even without selling anymore stuff, we will be able to save at least twice as much next month thanks to no credit card bills. I'm happy to be able to tell our money how to work for us now! If we continue to sell junk (I haven't sold anything I really cared to keep yet) and get some more freelance work, we will be able to pay my car off soon and have a sizable emergency fund to cover at least 6 months of expenses. I will likely sell my Mazda 5 after we pay off the note, but I'm thinking of keeping it while we are still remodeling because it is large enough for hauling drywall, etc. It was purchased new so we already have to absorb most of that original depreciation (hello stupid tax DOH us!), so keeping it for a few extra months won't see much as far as dropping in value. Once remodeling phase II is done (hopefully by the fall), I should be able to sell it and maybe buy a used small hybrid of some sort with cash! Yay!

Looking forward to 2009

Sunday, December 28th, 2008
I'm working on getting back on a more normal schedule now that most of remodeling phase I is complete. I'm happy to say that besides a few paint touch-ups, kitchen and bath window restoration, and the back door (waiting til good weather for this), we are essentially done! Before we dig into the work necessary to start phase II (most of the original floor of the house: living room, dining room, hall and 2 small bedrooms), I'm working on Dave Ramsey's Total Money Makeover plan to make sure we have a substantial savings and emergency fund before we start spending on the house again. It will likely take us the next 2 months to build up the remainder of the 6-month emergency fund that I've been working on. I have about 2/3 saved so far. Our only debt is on my car, which I'd like to sell and buy one outright with cash in 2009 as well. The other goal is to buy only with my debit card. It's too easy to use CC and I know I would save more even though I pay those cards off every month. I'd also like to get a permanent position at PGE once the current project I'm leading comes closer to completion. Hopefully for a similar salary to what I make now. I'd also like to do a European vacation in 2009, but its the last priority in the current economy because I will only do this if we don't have to crack into savings or CC to go. I'd rather have the remodel done than take a fancy vacation as well. :) I also need to focus more on the Flylady system to keep the house clean and get back on the 6-day a week workout routine, instead of about 4 which it's hovering around now. Here's to a great year!