Living Paycheck to Paycheck

Thanks in large part to my tax refunds/rebate, my net worth went up a fair amount!  Yay!  You can access my page here.

Last month’s net worth: -$9,406
This month’s net worth: -$6,293

For a difference of: $3,113

Reasons for this:

Even though money is only being added to my 401K currently (about $78 each paycheck), the money in all three retirement accounts has grown a little.

Tax refunds+rebate= $2294

$100 owed to me was paid back.

$35 from Revolution Money Exchange.

Didn’t spend too much last month while budgeting.

Final Tally! 

Income (from beginning of May):

Paychecks: $2409.97
VA State Tax Refund: $165
Revolution Money Exchange Pay-Out: $35
Federal Tax Refund: $1529
Money Paid Back to Me: $100
Federal Rebate: $600

Total: 4838.97

Expenses (for this week):

Gas (three trips): $144.82
Tolls: $35.00
Entertainment: 17.65
Rent/Water/Fees: 1033.66
Groceries: $158.69 (Got a lot of June’s groceries, hair dye, and allergy medicine)
Other:  $9.00 Service Charge on my bank account…I had less than $750 in my checking at one point, I guess.

How does this look for my Bare Bones Budget Categories?

Category 1:  Rent/Utilities/Phone/Internet/Food — $1467.78 / 1,345
Category 2:  Savings — $50 / 250*
Category 3:  Loans — $262.72 / 262.72
Category 4:  Gas/Tolls/Car Insurance/Car Maintenance — $460.26 / 480
Category 5:  Entertainment/Gifts/Clothing/Donations/Miscellaneous — $121.04 / 70

TOTAL: $2361.80 / 2409.97 from the original budget, with $48.17 going into savings (*along with “extra” tax money and things).

This also goes to $2361.80 / 2610.80 (the ACTUAL amount I have per month because of the two extra paychecks per year) for a difference of $249.00.  So this isn’t so bad, especially since my June groceries won’t be so expensive.

My savings will be allotted thusly:

$25 into Gift fund
$25 into Emergency fund
$1500 into Car Lump Sum (due NOV 2008!) account
$83.17 into Revolving Savings — this account is for when I go under or over on a given month and to fund “wants” periodically.

Other ”extra” money will stay in my checking for now.  My car insurance lump sum will be coming up this summer and I can’t even guess how much it will be.

Also:  Anyone closely following the blog might note that I’ve switched things from different categories and removed some expenses (like the Target bill payment).  I switched the Loudoun car tax to Misc., and I removed the bill payment because the point of this was to show what I spent vs. earned in May, not what I’m paying for now because of April or March.

I’m glad that I did this, but in the future I might just put down my Bare Bones Budget categories instead, since this turned into a lot of searching online for my online banking totals and credit card “recent activities”.

My take-home pay each month is $2,409.97.  Knowing that I have not been living within my means, I decided to make a “Bare Bones Budget”.  What always screws me up when keeping a budget is budgeting per expense, instead of grouping things together.  Each month when I pay my rent, I have to pay mandatory fees and my water bill together with it.  So that always varies between $1032-37.  I could choose a number within that range, but why not add my other utilities in?  And if I’m adding necessary utilities, why don’t I add in the unnecessary ones like cell phone and internet?

So I’ve broken my budget into a few categories:

Category 1:  Rent/Utilities/Phone/Internet/Food — $1345
Category 2:  Savings — $250
Category 3:  Loans — $262.72
Category 4:  Gas/Tolls/Car Insurance/Car Maintenance — $480
Category 5:  Entertainment/Gifts/Clothing/Donations/Miscellaneous — $70

The only problem with a bare bones budget is that it doesn’t leave room for surprises (unless you count Category 5’s “miscellaneous” option.  Already this month I paid my county car tax for $64.39…technically, that could go in either Category 4 or 5…or 2, “Savings”.  With my $250/month, I want to put $200 into the savings for paying my car loan, $25 into an “Emergency Fund” which I don’t really have yet, and another $25 into a Gift Fund.  It seems like every month, I have another gift to buy, and sometimes more than one.  In July, I have two weddings and my grandmother’s birthday.  I want to start putting money aside specifically for that.

To do that, I’m going to start splitting up my bank accounts.  I have two checking accounts, two savings accounts, and one Money Market account.  The Money Market has the most money in it and is the savings for paying off my car.  My most often used checking account will stay the same pretty much; it’ll be used for Categories 1, 3, and 4.  One savings account will be the Emergency fund, one will be the Gift fund, and the lesser used checking account will just hold whatever money is leftover at the end.

If this is too hard, I may I have to fiddle with the numbers as I go.  For example, $250 is more than 10% of my take home income, and I already have 3% of my salary before taxes going into a 401K (with 50% match), so it might be best to put more into travel as this summer approaches and gas gets higher.

In other news, this weekend my boyfriend went grocery shopping for Saturday night’s dinner so that he could cook for me.  I told him that I didn’t want him to buy food so that I could stick to the pantry diet, but apparently he disapproves and didn’t want to stick to it himself.  So he bought me a package of lunch meat and bread for this week’s lunch while he was there.  I’m so used to not having that kind of food that I cooked lunch and came to work before remembering.  That’s the best part of this diet-that’s-not-really-a-diet:  I’m finally learning how quick cooking can really be.  This gives me hope that in the future, when I’m a parent, my children won’t starve to death.

I realized the other day that I really have to start earmarking money for some upcoming expenses.  I am way past due to have my oil changed, for example.  I’m saving money by not taking it in, but I’m running the risk of much more costly expenses if I don’t, so I’ll use the $5 off coupon to Jiffy Lube from their website (instead of the $4 off coupon I received in the mail) this week or next.  I realize that it’s probably much cheaper to change my oil myself, but I honestly don’t know how to do that, and I like going to Jiffy Lube and knowing that they’re looking at more than just my oil.

Along with cars, I’m going to have to pay for my car insurance in July or so.  I pay the six-month lump sum up front so that I’m not charged an extra $4 a month.  Last time, this total was around $371, but I’m expecting that to go up because of my accident.

I’m also planning some beach trips this summer.  I’ll have one week in North Carolina at the end of July and one week in Ocean City, MD at the end of August.  Both times I will have free lodging because they are family vacations; I’ll only have to pay for gas.  I’d like to do a couple of day-trips, as well, where I’ll once again have to pay for gas, but not much else.  I’d like to buy a couple of beach chairs, an umbrella, and a cooler, but I can borrow all of these from my parents, so I most likely won’t.  Either way, the gas itself will be expensive, despite the 5% back I’ll be getting from it from my credit card.

The other major expense looming on my horizon depends on whether I move or not.  That I won’t know until July, though.

I may start putting aside some money each month into my ING Direct Savings account to earmark all these travel expenses.  The rest of my savings will continue to go in my Vanguard Prime Money Market account.

On Saturday morning I closed out my Bank of America savings account that generated almost no interest for me.  I’m keeping that money in my checking until I pay off this month’s credit card bill and my rent due 1 May.  Because my mom’s name was also on the account, I wrongly assumed that she had to go with me.  It turned out that she didn’t, but it still worked out well for me because we went shopping afterwards.

Both of my parents hate clothes shopping.  My dad dislikes the hassle of going somewhere where other people are waiting to annoy him by shopping near him.  My mom dislikes shopping because she can never find anything that fits (more on this) and when she comes home with something, it’s usually twenty years too old for her or twenty years too young and my dad is not shy about telling her so.

My mom said that if I came shopping with her, Dad said that she could buy me “something”.  “One thing or lots of things?” I asked.  She confirmed that she could buy me whatever I wanted (within reason), so I jumped at the chance.  I consider that any clothes they buy for me on an outing like this is actually payment for being a personal shopper.  It didn’t take too long to find what my dad wanted:  two pairs of pants and a couple button-down, short-sleeved shirts…except he’s particular on colors and they had only one shirt that I deemed acceptable.  This is why my dad likes for me to go:  I’m not going to let my mom buy him shirts that he won’t like just so that she can say that they didn’t have anything better.  The rule is not to buy unless you really like it / will wear it a lot, etc.

I don’t know why my mom has horrible taste in clothes or where she got it from.  Firstly, she wears a petite size and this particular department store had a reasonable, but not extensive section.  She told me her size and we found a bunch of things for her to try on–nothing fit, but one shirt. 

“Well, I’m just going to put all this back and go to Penney’s,” she said when I insisted that she try on everything again in a larger size.  I responded that she’d have the same problem at Penney’s and I wasn’t going to spend another two hours helping her find too-small clothes to try on and nix in the end.  We ended up finding a few of the things she tried on in her true size and she bought those.  I felt bad that I didn’t sound more understanding.  I do understand how hard it is to shop for clothes because you’re too big for the ones that you have; I don’t understand being okay with looking like crap until you can fit into your smaller size again.  My mom actually tried on a pair of skintight khakis and told me that they fit…convincing her that they didn’t is what earned me the expensive sweater I got!

All in all, I picked up a summer sweater, blouse, pair of brown flats, a dress, a couple summer nightgowns, and a few pairs of underwear.  I put away two skirts, even though Mom said I should get them, because I thought that she was spending too much on me (everything was on sale, though!) and the skirts are the kind that flare out at the hip, making a woman with hips look even hippier…and I am a woman with hips.

If I’d known that my dad was seriously okay with all the money spent, I could have gotten free gas and maybe a new purse, too, but all in all, I did all right.  This will help me be less tempted to spend my own money, too.  I hope.

Yesterday I began freaking out because I thought that I was going to be short enough money for rent and things (if I didn’t close out my money market account and use that cash).  I didn’t know how I could have made such a mistake.  From what I could tell, I thought that the $1000 I’d just contributed to an IRA had already been taken out of my checking account, but it hadn’t.  So I was quite surprised to see just how short I was.  I was incredulous that I had allowed this to happen.

Fast forward to this morning when I logged in to Bank of America only to find more than twice the amount of money in my checking than it had had yesterday.  I saw that I’d made a similar mistake from before.

Both times I forgot about the lag on money transfers between accounts from different banks.  I transferred money from my credit union account to Bank of America and the money was taken out almost right away, so my portfolio showed the new balance for the credit union, but did not show anything pending for Bank of America.  So I forgot about the money or subconciously assumed that it had already transferred over.  Even after I’d already made the mistake about Vanguard, it never occurred to me to look around and see if I made any similar mistakes.  This could have saved me a lot of stress and time.  It also almost made me impulsively close my money market account.

I find myself to be ridiculously impulsive.  It probably stems from my ridiculous laziness; it would take so much time to make a thought-out decision that it’s easier to decide something quickly and go for it.  Sometimes this leads to regret, but mostly it works for me.  It’s also something that my boyfriend likes about me; if a decision needs to be made quickly, I can make it.  The problem is that there are some decisions that don’t need to be made so impulsively.  Like closing the money market, for instance;  I was all set to close it today only to find that it’s unnecessary.  I would have done something foolish for the sake of getting it done as quickly as possible.

So now I find that I am close to fine for the next month or so until I get a few more paychecks.  And that tax refund and tax rebate.  Once I get those, I can really start building my savings.

When I bought my 1999 Toyota 4Runner in 2006, the best interest rate I could have gotten with my credit score was 9%.  I didn’t have BAD credit, I just hadn’t had enough for a long enough time.  At the time, I didn’t realize that getting a car loan would have actually helped my credit score by having different types of credit; that’s why I took a loan from my parents at a great deal.

I borrowed $5000 at no interest to be paid in full November 2008, and $5500 at 7% interest for three years, to be completed in November 2009.  My monthly payment became $169.82, not including the $200/month or so that I *should* have been putting aside each month, specifically for the $5000 balloon payment.

I was putting money aside; in fact, I saved a LOT during that ten months as a teacher.  But when I was out of work for essentially six months, my savings dried up quickly.  I now don’t have enough for that November balloon payment and I have to work to get to that point.

I decided to refinance my loan with my lender, Dad.  Yesterday, we worked out a new schedule and a new interest rate.  I had 18 more payments left, so I increased it to 30, with a 31st balloon payment of $500.  The interest rate changed to 6%, which leaves me with a monthly payment of $88.71.  I already have over $3400 in my Vanguard Money Market account, with $200 automatically going in each month.  By November, I will have over $5000 ready to go if I also put in the $81.11 I’m saving each month.

The only problem with my Money Market account is that I have to keep at least $3000 in it, which I will be unable to do at that time.  When I get to November, I will close the account (sadly) and move my money into a high yield savings account like the ING Direct one everyone’s been talking about, until I have that $3000 again.  Since I’ll still be saving $281.11/month, hopefully it’ll take under a year.  Also, hopefully by that time I’ll already have received a raise that beats the rise in my cost of living, so that I’ll be able to save even more.