Tag Archives: Budgeting

The iPad: Meh…

Obviously, it’s been a looooong time since I last posted here.  There’s no real reason why I stopped writing on HotFrugal…  Life just kinda happened and I got busy with a new house, new job, new involvement with several local organizations, etc.  Things have calmed down a bit, and I really miss writing, so I’m going to start up again.  I’ll just go ahead and dive right in…

 

Used with permission from Debbie Ridpath Ohi at Inkygirl.com

For a long time, I have been absolutely green with iPad envy.  Two of my coworkers have iPads with fancy keyboard cases, and they (my coworkers) always make me jealous by showing off all the fun things they can do.  Even my mother has an iPad, and she’s not exactly someone I would consider to be an early adopter of new technologies.

So, a few months ago, I started an iPad savings account in true HotFrugal fashion.  I have an online checking account with ING Direct, and I also have several targeted savings accounts with ING.  My emergency fund is kept totally separate with another online bank.  I love ING because it literally takes about 30 seconds to open a new savings account, and you can have dozens of accounts at any one time.  With a few clicks, I had a savings account named “iPad” with the goal to save $800 for the mid-range model and the keyboard case.

But then a funny thing happened… Over the past five months since I opened the account, I’ve only put $40 in it.  Whenever I have extra money to save, I never seem to want to put it in the iPad account.  Instead, I find myself wanting to put the money toward my general savings fund or toward one of my other “just for fun” funds.  Today, it finally occurred to me that maybe I don’t really want an iPad all that badly, or rather, there are other things that I want more. 

There’s a good lesson in this experience that I hope I will remember in the future.  If I had just gone ahead and bought an iPad without deliberately saving for it, I never would have realized that I didn’t even want it that much in the first place.  Fortunately, ING makes it easy to change the nicknames for savings accounts, so the iPad account is now called “Roth IRA Starter Fund.” 

Viva la frugal!

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Filed under Frugal, Savings & Retirement, Shopping

Monthly Update: June 2010

Reality checks are an important part of measuring the progress made toward achieving a goal.  Discussing my finances publicly has been very helpful for me, so I’m going to start sharing my little reality checks with all of you, dear readers.  Around the first of each month, I’ll post a quick review of some of my key financial measurements.  June is the first month that I’m making these calculations, so it will be my baseline.  In future months, I’ll compare my stats to the previous month and explain any significant changes. 

I’ll also update the action items in my 30 Sense plan each month.  Click here to see the latest.

To be perfectly honest, I’m getting that uncomfortable feeling again because I’m about to put even more of my financial information out into the world.  But I know that this process will be good for me.  I’ve had such phenomenal support from friends, family, and strangers who have been reading HotFrugal regularly.  I can’t begin to explain how helpful all of the encouragement has been.  I’m a very lucky gal. 

So here goes… 

Net Worth

My net worth as of June 1, 2010 is $78,291.  My assets and liabilities are:

Assets Liabilities
Emergency Savings $9,819 Home Mortgage $110,461
Mad Money Savings $2,362 HELOC $19,309
Checking Account $477 Personal Loan $17,539
Health Savings Account $1,458 TOTAL Liabilities $147,309
401(k) (Vested Balance) $31,359  
Car Value (per KBB) $5,125  
House Value $175,000  
TOTAL Assets $225,600  
   
Net Worth (Assets – Liabilities):  $78,291

Spending

Over the past six months, my spending has averaged $2,449 per month (my goal is to keep this around $2,500 based on my current living situation).  This excludes savings, retirement contributions, health insurance, and healthcare costs.  All of these costs are deducted from my paycheck automatically, so my budget focuses on the spending I do with my take-home pay. 

There are two spending categories that I consistently struggle with in terms of staying on budget each month: Dining Out and Groceries.  I’m often appalled by how much money goes in my mouth each month, but that’s a subject for another post.  The following table shows my actual spending in these two categories for June vs. my budget.

  Budgeted Amount Actual Spend (June) Variance
Dining Out $160 $156 $4 under budget
Groceries $238 $272 $34 over budget

Summary

I’m feeling pretty good about the current state of my finances.  It will be interesting to see exactly how things shake out after my house is sold at the end of this month.  Everything seems to be going smoothly, but I won’t count that chicken until it hatches.  If all goes as planned, selling my house shouldn’t have much impact on my net worth, but it will affect the way my net worth is distributed.  July’s update should be interesting.  Stay tuned!

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Filed under Monthly Updates

She’s a Super Freak (Control Freak, That Is)

When it comes to money, I’ve become a total control freak.  It’s paying off; I’m starting to see significant improvements in my financial situation.  In our highly automated and digitized world, I’ve realized that I prefer a manual, hands-on approach to personal finance.  There are thousands of resources out there that are designed to make it easier to manage your money.  There are software programs like Quicken and websites like Mint.com.  There are automatic bill pay services and spending trackers.  There are tax services and financial planning services.  I don’t use any of ’em. 

Instead, I use my own custom created spreadsheets.  My financial spreadsheets are massive and exceedingly detailed.  They have color codes and abbreviations that wouldn’t mean anything to anyone but me.   They are not particularly efficient and they are definitely not pretty.  But I love my spreadsheets.  I dutifully and obsessively use them to track my spending, monitor my savings, and identify potential trouble spots.  I also use them to run “what if” scenarios.  I make projections based on different levels of future income or rates of return to see how the changes affect my goals and the time it will take to achieve them.

Sure, using financial software or websites to perform these functions would save me a lot of time.  But I don’t think that would be the best thing for me.  My cumbersome, manual approach to personal finance has many advantages:

It forces me to spend a lot of time thinking about my money and financial goals.  There are programs that will automatically link to your debit and credit cards to download and categorize transactions.  This is definitely an easy way to keep track of spending by category.  But if I relied on automatic processes, I know I’d only review my spending every couple of weeks.  Because I enter all of my receipts and categorize them by hand, I am forced to review my spending every couple of days.  This enables me to spot troublesome spending patterns and correct them immediately. 

It provides me with 100% flexibility.  No two people’s priorities are the same when it comes to spending.  When I was a blonde, I spent a lot of money maintaining my do.  In fact, I spent so much that I had an entirely separate “Hair” category in my budget.  None of the software programs I could buy would come with a Hair category built in.  Whatever it is, we all probably have some quirky spending categories that are significant enough to be tracked and monitored.  We might also have quirky goals that we intend to meet through creative means (yard sales, side jobs, blackmail, etc.).  A customized spreadsheet is the best way to handle these unique situations.

It helps me better understand personal finance and how wealth is accumulated.  Being actively involved in my finances has demystified the process of accumulating wealth.  Now I can see firsthand how debt drains resources that could otherwise be used for building a strong financial future.  I now realize that there is no magic to personal finance… It’s simply a matter of making a plan and sticking to it. 

It makes me feel more confident.  With greater understanding comes greater confidence.  I really like feeling like I’m in control of my own destiny, and that my destiny is not in trouble with me in the driver’s seat.  I have a long way to go to achieve my goals, but I never worry about my financial future any more.  I know I’m doing the right things.  I know I’ll be just fine. 

I’m not saying the manual approach would work for everyone, but it seems to be a good fit for me, at least for now.  I consider myself a financial beginner.  I’m still learning the basics of personal finance and defining my long term goals.  My net worth is relatively low and I don’t have a lot of investments that I need to manage.  At this point in my life, being a control freak is both manageable and educational.   

Now if I could just get Rick James out of my head…

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Filed under Personal Finance