Archive | Thriftiness

Some people can get by without a budget.  I am not one of those people.  This is part of a three-blog arc on how Mr. Wetzel and I have been able to successfully budget for the last year: Know Thyself, Set Your Course and Be Faithful.

Some additional guidelines to help you stick with your budget…

Find Balance. Once or Twice a month, balance your accounts with bank records.  Go through your bank record and credit card statement and mark off the entries in your Budget Binder.  I like to make a note of the date each time I do this task and use a different color highlighter to make the section stand out.  Doing this check will help you make sure you don’t forget payments for auto-withdrawals or lost receipts.

Pay Off the Cards. If you have a revolving balance on a credit card, don’t use your card to pay for things until you have paid off your revolving balance.  This will force you to use the money in your checking account and remove the temptation of accessing the entire available balance on your card.  This habit is key to getting and staying out of debt.  Don’t spend what you don’t have.  You only will end up paying for it more in the long run.

If you find yourself tempted to spend on credit, step back and ask yourself why you want to purchase the thing in question.  Will you be fine without it?  If you need to, call a friend or partner before making the purchase so that they will hold you accountable.

Cut the Cards. As you pay off your cards, simplify your financial life and get rid of extra credit cards.  Mr. Wetzel and I only have 2 credit cards (one in each of our names, so that we’re both gaining a positive credit history), 1 store credit card and a debit card.

Cash counts! Never treat cash like its money already spent.  Cash always counts.  If you buy something with cash, make sure to save the receipt or note the purchase in your Budget Binder as soon as possible.  Save your change, as well.  If you put all your spare change in a jar, you’d be surprised how handy it can be on a rainy day.

Wish Lists & Shopping Lists. The best way to thwart impulse spending is to set goals for the things you want to purchase and then save up for them.  If you have an attractive goal ahead of you, you are less likely to blow your money on something you don’t really care about.  Currently, I have an ice cream maker on my wish list.

Shopping lists are handy on a day-to-day basis because they keep you from small impulse buys at the store.  If you see something at the store that isn’t on your list, consider writing it down for the next shopping trip.

Accountability. Tell someone what your budget goals are and ask them to check on your progress.  If you are budgeting with a partner, your companion doesn’t count!  As a couple, you need another couple or another individual to hold you accountable.  Telling others what your goals are also helps clear the air of needless spending; if you and your friends are both trying to get out of debt, you can think of cheaper ways to spend time together and it will help all of you out in the long run, whereas lack of communication too often serves only Mr. Visa, Madam AmEx and Master Card.

By ekwetzel
2010-02-04

Some people can get by without a budget.  I am not one of those people.  This is part of a three-blog arc on how Mr. Wetzel and I have been able to successfully budget for the last year: Know Thyself, Set Your Course and Be Faithful.

What spending categories do you have?  How much do you need to budget in each area? Think of these categories separately instead of lumping them together with all of your earnings and spendings.

The Budget Binder & Individual Account Pages. Once you know how much you are bringing in and how much you are spending, you can sit down and face your spending habits.  Find a way to balance your budget by continually re-examining your needs and your wants.  Decide on a goal to spend for each category: groceries, car payment, rent, etc.  Finally, create a Budget Binder to help you keep track of your spending on a day-to –day basis.

The Budget Binder works in the same way that a checkbook does, except the Budget Binder has a page for each spending category.  We call these “individual account pages.”  Before learning this trick, Mr. Wetzel and I would have spending goals for different areas of our life; however, it was impossible to keep track of our actual spending and to hold ourselves accountable to our goals until we used the individual account pages.

Sample Individual Account Pages: download from Google Documents. These are some sample pages that we have found useful.  Adapt the pages to your own needs, adding or subtracting categories as needed: View on Google Documents

How It Works. When you get paid, disperse the funds available for each of your accounts onto each of the individual account pages.  When you spend money, subtract the funds from each of those pages.  Let’s use Amy as an example:

Amy earns $100. First she notes +100 on her “Earnings and Disbursements” page.  She disperses $50 to grocery, $25 to household and $25 to fun, noting +50, +25 and +25 on each page.  She then goes back to the “Earnings and Disbursements” page and notes -100 for a final balance of zero.

As Amy spends money, she subtracts the amount she spends from each of the individual account pages.  She tries to keep aware of how much money is left in each area of her budget.  It is easy for her to quickly check the funds for her budget because each category has an individual balance, instead of being lumped together into a total sum in her checkbook or online account balance.  If she doesn’t spend all the money in a given fund, she sets it aside and lets it accrue. You never know when you’re going to need a little extra dough, after all.

For example, Amy knew that a blockbuster hit was coming out on February 10th and that she’d want to go see it on opening night with her friends. So, she made sure to keep enough in her “Fun” fund so that she could go out to the theatre and catch a bite to eat from concessions.  In order to have enough money available, she skipped a few lattes during the week, but she reminded herself, “I don’t need a latte.  I don’t need to go to the movies, either…but I’d get much more pleasure out of going to the movies than drinking a few lattes.”

Remember: this is a Tool, not Torture! The whole point of budgeting is to be a good steward of your finances.  Create your first budget plan, and if you find that your spending habits continually break the budget, re-examine the budget.  Sometimes you’ll need to crack down on your spending habits, but sometimes you’ll need to change your budget to suit your needs.  Everyone has different desires, habits and goals, so everyone has a different budget as well.  The important thing is to find a budget that works for you, and then stick to it.

By ekwetzel
2010-02-03

Some people can get by without a budget.  I am not one of those people.  This is part of a three-blog arc on how Mr. Wetzel and I have been able to successfully budget for the last year: Know Thyself, Set Your Course and Be Faithful.

You must be aware of where you start from.  Assess your current spending habits, as well as the attitudes you have about spending.

Keep track of all spending and earnings for 1 month. The easiest way to do this is to save all your receipts and all your pay stubs.  If you buy something that doesn’t have a receipt, or if you tip beyond what’s noted in the receipt, just write it down on a slip of paper, date it, and put it with the rest of your receipts.

Mr. Wetzel and I put all our receipts on a big glass plate by the front door until they are checked into our budget book (see Budgeting 102).  We have also been known to keep them in shoe boxes, tucked in our wallets or purses, or jammed into the pockets of a three ring binder.  Once we are through recording the receipts, we toss the ones for gas receipts and grocery trips, and save the important ones in a box.  We also hold onto all our monthly statements from credit cards or other accounts, as well as our pay stubs.

Don’t be materialistic. You are more than your possessions.  You do not need to be defined by what you have or what you buy.

One reason I like to watch the TV show Survivor is that it’s interesting to see Westerners come to realize the difference between needs and wants.  We need food, for example; but, we do not need a take-out pizza.  A baked potato (or plantain) will do.  Sometimes we use the things we buy or the act of shopping as a distraction to keep us from confronting things about ourselves or our lives.

Mr. Wetzel and I pray over our finances and try to grow in spirit, instead of growing in debt.  We have learned a lot about ourselves as we have given up things that we think we need.  By trusting God more and believing more in ourselves and our relationship, we spend less money yet find ourselves even richer than before.

By ekwetzel
2010-02-01

December is the coldest month of the year in Tacoma, and we wanted to heat our apartment as efficiently as possible.

Since we are renting, there are many things Mr. Wetzel and I cannot change about our apartment that would shave money off our heating bill, such as installing double pane windows or replacing our inefficient baseboard heaters.  We put some simple ideas into practice this fall; and, when we received our heating bill for the month of December, we saw that the ideas paid off.

The chart above is from our power bill. As you can see, we used 590 fewer kilowatt hours, cutting our bill down 67%.

We’ve gone through the usual rigmarole every year: turning lights off in unattended rooms, installing energy efficient bulbs, turning the heat off at night or when we’re away, and wearing sweaters and slippers.  In addition, we were thinking “inside the box,” being creative about the space that we are in and channeling its strengths to work for us.

The layout of our apartment is very open concept, with the kitchen, eating area, living room and entry all part of one big room.  In the summer, this area is airy and cool.  In the winter, it is a very hard room to heat because it is so large.

When Washington gets rainy and dark outside, Mr. Wetzel and I spend a lot of time indoors, watching TV, playing videogames, surfing the net or reading.  Last December, our television was set up in the open living area, but this year we moved the TV into the smallest room of the apartment, one that we used as an office.  This TV room is at the end of a hall, along with our bedroom.  We purchased a two-panel curtain set ($30 from World Market) and extension rod (a few bucks from Home Depot), and positioned the curtains in the hallway, just outside the entry to the two rooms.  This helped to insulate the heat in the rooms, while allowing our cat to roam freely throughout the apartment.

On warmer days, we wear sweaters and let the heat of the electronics warm the rooms.  Yes: we play videogames and watch TV to stay warm.  It makes me chuckle!  On cooler days, we turn the heat on for a while; once the rooms are warm, we shut it off.  The curtains help to seal in the warm air, and since the space is small, the warmth doesn’t have many places to escape to.  On the coldest days, we leave the heat on, and the rooms stay noticeably warmer than the rest of the apartment.

Without the television in the main living area, we now have the sofa and chairs in our main room set up to face each other.  When we have guests over, the TV no longer gets haphazardly turned on.  Instead, we sit around chatting and getting to know our friends and neighbors more intimately.  That too brings more warmth into our lives…590 kilowatts of “friendship” warmth a month, to be exact.

Mr. Wetzel and I support green power through the City of Tacoma.  Here is more information about Tacoma Public Utilities Evergreen Options .  For homeowners and renters, you can support green energy at the Frog, Salmon, Otter or Orca levels (more info here).

By ekwetzel
2010-01-13