Wednesday, June 10, 2009

The 2009-10 Fighting Foreclosure Budget

Here's the long awaited post about the June 2009-10 budget. (At least it was long awaited by me!) I've been crunching numbers and crumpling scrap paper and I think I finally have things worked out. One thing that really helped this year was that for the first time ever I was able to print off an entire year's past budget and see actual numbers. In the past when I have made budgets, I always jotted them on legal pads or whatever and eventually stopped using them, so at best I might have a couple of months of accurate figures. Because of my Fighting Foreclosure blog, I've actually kept every month's budget in a spreadsheet, and it was great to just click "print" and have 12 pages of data right at my fingertips.

I took most of the variable expenses and averaged them over the year. For example, most of my utilities are on a budget plan, all except for the electric on the house. Since installing CFLs I have been able to cut that bill about in half. I was originally budgeting $53.00 for it (based on my ex's 10 month average) and I was able to knock that bill down to about $27.00. However, what my full year budget showed was that there are peaks - during holiday season when I had Christmas lights up, for example. I was a bit surprised that my 12 month average was as high as $40, but that is where it came in at, and it does provide me with a little cushion. Here are some other things that have changed from June of 2008 to June of 2009 -

Mortgage payment - payment went down on the house due to lowering home insurance. I am no longer paying to insure my ex's photography equipment and that took a bit off the bill. Mortgage payment on the cabin also went down shortly after starting blog. I had been paying a mandatory premium to have the lake sprayed for weeds. That ended last summer.

Utilities - The electric budget at home went down, as mentioned, from $53 to $40. Gas went down from $132 to $109. I am on the budget plan so this is pretty much a fixed expense. Gas for the cabin remained the same, but electric went up a bit.

Insurance - In addition to lowering the home insurance through dropping the rider for the camera equipment, I lowered it again in May 2009 by changing carriers. I am hoping I will be able to do this for auto insurance as well. My renewal is in July, so we will see how I do.

Car payment - What can I say? I eliminated this all together! I went from $307 to $0! However, I have begun funding a new Car Maintenance account with $25 a month. I know that isn't a lot, but it should be enough for regular oil changes and small maintenance items. Eventually I would like to boost the payment into this account by quite a bit and make it a Maintenance/Next Car fund, but that will be down the road when I am feeling a bit more flush with cash. Last September I also started a Car Registration fund. This just takes $7.50 each month and puts it away so when my renewal comes up I have it ready. I am trying to do a lot more of this with annual bills - put a little aside each month.

Auto Fuel - Agh! I still don't know what to do with this! I had it as high as $150 for awhile when gas was $4 a gallon. Now gas continues to rise, are we going to hit those kind of numbers again? Summer is a busy time for me too, I do a lot of driving. For now I am leaving it at $100, though last month I only spent $23.41.

Groceries - This is still at $125, which is what I set it at last year. However... if there is ever a budget I break, it is this one. I considered raising the limit, but instead, I am going to try the envelope system for this category. Last Friday was payday for me and I took the money out in cash and have it tucked away in a special part of my wallet. What I would like to do is spend much less than $125, then take what is remaining and put it in a canning jar under my bed or something. That way when I have more expensive months, know I have a back up. For example, attending a bunch of holiday parties where I bring a dish, always seems to be more expensive month than I plan. I'm still not too sure about this though, so I will let you know how it goes as I go along. I am hoping this No Spending Challenge for June will really help.

Credit Card - At the beginning of starting my Getting Nine Hundred goal, I had my credit payment budget at $75. In January I was able to make some changes to my Flexible Spending Plan and get a little more income, half of which I put in my bank account and half I applied to my credit card payment, bringing it up to $111.68. This month I made the final payment of $114.13, so this is done! My budget now is $0.

Dining Out - In June of 2008 my Dining Out budget was $200. This was based on some very real estimates of what I had been spending on this... of course I had also just gone through a hard separation and divorce and had a tiny kitchen in the little apartment I was living in, so dining out happened a lot. By July I had dropped it to $150 and by October I had it down to $100. With a little thought, a lot of coupons and some frugal choices (like not dining out alone) I have been able to keep to that $100 budget. That is what I am sticking with for 2009.

Entertainment - My entertainment budget has stayed pretty close to $50 all year. Usually I don't use it at all, but occasionally I do see a movie, go to a museum or a play. This all fits in here. I rarely go over $50.

Christmas Fund - Even through the worst of times, I funded my Christmas fund. Why? Because I love Christmas! Now, if I had ever had to dip into it for emergency reasons I would have. As it turned out, I've never had to, so I had money for gifts and parties and all that jazz last year. At the time, I was putting away $12 a week, but after Christmas time last year I decided to bump it up to $13.50 per week. Again, I kind of consider this a back up emergency fund. Like car maintenance or any of the others that I stock away a little for each month, if I have to use the money I can. I also have a gift fund for year around birthdays and things. This year I am actually taking that amount out each month and putting it in a separate account, that way the quiet months can help pay for the months when I have three birthdays, a wedding and a 50th anniversary party to attend.

Home Improvement - As I have written about (until even I am bored with it) this is another of my danger categories. It has been $50 a month, yet with two houses, I have blown through it more times than I can count - sometimes by a lot. This month I am doing it like I am groceries - by the envelope system and I am doubling it to $100. I'll let you know how this goes.

Miscellaneous - Dreaded miscellaneous. All that stuff that just doesn't fit anywhere else goes in here. It was $50, it continues to be $50, and I know this is one of those weak areas I may go right through because I cannot plan what will end up here. All I can do is look for patterns and try to fix them whenever I can. This is actually where the idea of the gift fund came in.

eBay/Shipping - This started at $35 and went up to $55 through the course of the year. This is for all eBay fees and the costs of mailing books and other items that I sell. Frankly I could care less if I spent every penny out of here because spending from here means income is coming in.

Charity - Charity was at an ambitious $35, but over the last year I had to bring it down to $15. I still believe in giving, but I only do it when my nine hundred goal is met or when I have saved enough in other areas that I can afford it.

Emergency Fund - I put $50 a month away each and every month into the emergency fund, and more when I have it. This is a continuing plan for 2009.

Income - Fortunately, my income has gone up. Even though my company is on a wage freeze, I have still been able to increase my take home pay. I changed my payroll tax withholding deductions and my flexible spending plan, both which put more dollars in my paycheck. I also picked up several part time jobs, and even added a little more from online sales, taking surveys and mystery shopping. The only money I can actually budget though, is my take home pay. The other money is unreliable and variable.

The Bottom Line:

So, what does this all mean? It means that if I am careful and don't exceed any budget item I can actually make it each month. I don't need to get nine hundred each month, in fact, I will come in over budget by about $250!! I went from needing $900 each and every month, to now having that and being well over budget. How did I do it? The only way you can - I decreased spending by lowering bills and increased income.

However, my journey isn't over yet. Last month I got two sides of my house painted with the money I had saved up. Frankly, I thought it would take longer than it did, but he wrapped it up in pretty short order. The only problem is, I don't have the money to do the other sides! The whole thing cost more than I expected and I had to dip into my emergency fund as it was. Now, if I want to get the house finished by the end of this summer, I need to get about $900 in June, July and August. So, it is like I am right back where I started from!

Until the house is finished, I need to keep going the way that I have been - scrimping and saving and putting away every penny. It is great to know that I probably won't lose a house - and as long as things stay exactly as they are, I will be okay. Of course, tell that to the thousands of Americans who said the exact same thing a few years ago and are now losing their homes! My goal is to get enough money to finish the house paint job. Once that is done, then stock away every single nickle I can to get into the emergency fund. I need that fully funded and some better safety nets in place. I may not be fighting foreclosure right now, but I am very aware at how close to the razors edge I am.

I am also resetting everything to zero - no counting the changes I have made from last year. Everything you see me add in now is new... which is why I only have $14.14 in the kitty right now! However, I am going to do something new that I haven't done before - I am going to count money that I save. You and I both know that if I follow my budget to the core, I will have an extra $250 at the end of the month. If I overspend, I have less; if I save more, I will have more. So, at the end of each month I will add up my budget and see how I do. Whatever I can come up with will add to my $900 goal up there at the top and that will go to the house painting project. This should help keep the frugal wheels turning!

Photo by: Orfield Photography


Frugalchick said...

I know it can be really difficult at times, but you are doing so great! It seems you have given your budget a ton of thought and you know what will work for you. You've done a great job of challenging yourself to spend more/save less without setting yourself up for failure.

Dawn said...

Thanks Miss Frugalchick! This budget took a lot more work than last year's budget, which is funny because I had more information. All we can do is keep working on it, right?

Catie said...

Wow, when you put it all THAT way.... you have done a heckuva lot in one short year! I am inspired. And I know these summer months are going to be rough given that your part time jobs are minimal, but just keep looking at the big picture of where you are! It's quite amazing.

Dawn said...

Thanks Miss Catie!! I have to admit - I am pretty darn pleased with what I have been able to do in a year too. It was more than I thought I would, although I still feel unstable. I really am looking forward to when I feel like I don't have to worry anymore.

getting stuff done said...

am seriously impressed. to have a whole year's data! I manage about 2 months at a time. then it all goes a bit wobbly for some reason or other. how very satisfying to have it all on a plan thus.

Dawn said...

Getting Stuff Done - Thanks!! Having a routine really, really helped. I've never kept my budget this well before.

Over the Cubicle Wall said...

As far as a budget for auto fuel goes, I usually plan on two tank fulls per month (about 25 gallons). I use an average cost per gallon of $3. When gas is lower than this like right now, I put the excess away into my auto fuel fund. When gas is higher, I pull the extra I need from that fund to pay the difference. It works pretty good for the most part.

For gas used during trips (above the 25 gallons a month), I pull the money from my travel fund.

Michelle said...

Good, no - GREAT for you! That's is awesome...In the words of my semi-annoying boss - make a plan, work your plan, your plan works!You've mentionied many times that this blog has helped you - the discipline to track your expenses - and I just wanted to say you're helping us, too! I'm shifting to the envelope system for my groceries/household supplies & transportation (gas, oil, oil changes) this month, too - as these are my budget killers.

Michelle said...

Oh, and I meant to say...In reviewing our budget expenses for the last 6 months (we're 1/2 way to a full year!), we've made only two changes: 1) going to the envelope/all cash approach for food/supplies/gasoline and 2) this one is silly and might not be realistic/necessary for others, but I have a separate category for 'entertainment food & drink' - my DH is very very social and frequently plans spur of the moment barbeques & excursions... this budget line item is tracked because he truly does not appreciate how much it costs to feed 7 extra people one meal. It's set at $75/month (which also covers a bottle of wine & a take-along dish/appetizer when we are invited to another's home for a party/dinner/etc) and overages that are due to DH's impromptu parties (are going to) come out of his fun-money! But we would not have 'known' to make these adjustments had we not tracked to the dollar where our money has been going...Budgets and expense tracking RULES!

Anonymous said...

Wow. You are doing GREAT!!!! :) You should be very proud!!

Dawn said...

Over the Cubicle Wall - Hmmmm... interesting thought. I really like the idea of averaging out at $3 a gallon and doing 2 trips. I do drive more in the summer because I go up to my cabin. I don't have a travel fund right now to handle that, but I bet I could figure out some averages. Thanks for the idea!!

Michelle - I would love to hear how your envelope system works for this month. So far, mine has been working pretty good, but it is still a bit early. And I don't think your extra category is silly at all! I've thought about doing something similar. I love to entertain, but it can be expensive. In your case you are using it to show your DH the true cost, but it is also good to know you have a pool of money to draw from for those expenses.

I am getting so many great ideas from these comments! Thanks guys!!

Dawn said...

Frugal Dreamer - Thanks so much!

Serendipity said...

You are doing so awesome!

Dawn said...

Thanks Serendipity! I keep working away at it!