This Week’s Carnival of Personal Finance

This weeks Carnival of Personal Finance was hosted by Broke Grad Student and my post about Lowering Expenses by Keeping Receipts was included. Definitely check the carnival out. Here are a couple entries that caught my attention:

Job Happiness”: The oxymoron of the century
Cutting Back Can Make Changes to Your Health
Quitting Smoking – One Month Later
When to Cut Your Losses

Weekly Budget – Week 8

This past week I ended up spending a bit more than I was expecting but part of that was my purchasing groceries in advance for the upcoming week a cost that my wife normally covers. Here is my weekly budget for this week with some adjustments made:

Weekly Budget
Feb 23 – Mar 1
Budget Actual
Alcohol $50.00
Food-Lunch $0.00
Food $50.00
Gas $20.00
Entertainment $0.00
Smokes $40.00
Misc $40.00
Transportation $20.00
Stupid $10.00
Total $230.00

Budgeting weekly has helped me keep an eye on my spending and this past weekend I had a chance to review my actual receipts. My wife and I had divided up some of the spending in that she covered a chunk of the food costs and I covered smokes and any wine we would have in the evenings. I was truly surprised when I realized I had spent over $100 on alcohol this past week. I could have made these purchases smaller by buying cheaper wine or even sticking to bargain priced beer but we were splurging a bit. I have left the budgeted amount for this week $50 knowing I am going to be making a conscious effort to keep this cost down.

I know that this expense is really a luxury and we could do without sharing a bottle of wine in the evenings but we enjoy it and up until now I didn’t see it as a real hindrance. But with the costs being as high as they are and my mental drive to get out of debt it is becoming excessive and unnecessary. I want to balance the lifestyle with the budget and this week we will try keeping the costs down.

Other than the food and alcohol costs everything else is pretty much the same.

Lowering Expenses by Keeping Receipts

When times start getting tight the very first thing people will do is to start cutting back on their expenses. Unfortunately a great many people don’t know where all of their money goes – they inevitably loose track of a few dollars here and a few dollars there. Although this is a generalization I believe that it’s very true since it happens to me the moment I stop tracking my spending.

To help me track my spending I keep all of my receipts and ask for them all the time. I don’t keep these receipts for tax purposes or anything of the sort. I keep my receipts to track my spending to the penny, and it helps.

How I track my spending with receipts:

Step 1 – Get the receipt

Every time I spend money I ask for a receipt – it takes a bit of time to get used to asking for one but most stores will give you one when you ask (assuming they don’t give you one right away).

Step 2 – Track the Spending

Using the receipts I input them into spreadsheet so I can see exactly where my money has gone. The receipts help keep everything honest and free of a poor memory. Rather than thinking I spent about $50 for groceries I will know I spent exactly $55.43. This level of detail can be very useful

Step 3 – Adjust budget

Having the receipts allows me to see real numbers and adjust my budget appropriately.

Some people advocate using one trackable source for their spending such as debit or credit cards but I find that small purchases get lost in the shuffle.

The only drawback to using your receipts is the fact you have be somewhat vigilant in putting the receipts into whatever tracking system you use. If you let them collect for too long the sheer amount of receipts can prevent you from tracking them.

Keeping my receipts has helped me keep my spending under control and allowed me to adjust my budgeting to be more realistic.

The latest Carnival of Personal Finances is up!

The latest Carnival of Personal Finance (#192) is up and its hosted by Canjun Finances. The theme for this weeks carnival is Family Day which is a holiday in Ontario. I have to say its nice to have this day off in the middle of the winter. Here are a couple entries that caught my attention from the carnival:

Stop Thinking About True Value and Just Buy What You Need
Could you get by on half a million a year?
Forget Economic Stimulus: Get Your Own Financial House in Order

Weekly Budget – Week 7

This weeks budget is back to more normal levels as Valentines has passed and I’m not expecting any additional expenses at least not the same size as those required for Valentines day. I also managed to get all of my reciepts for the year up to date unfortunately I haven’t had the time to really look at where I’ve been spending my money so I can better adjust my budget. With that said there are a few smaller changes that can be seen in this weeks budget:

Weekly Budget
Feb 16 – 22
Budget Actual
Alcohol $50.00
Food-Lunch $0.00
Food $85.00
Gas $25.00
Entertainment $0.00
Smokes $40.00
Misc $40.00
Transportation $20.00
Stupid $10.00
Total $270.00

I don’t have all of my weekly spending brokend down in detail but I did notice that I was in fact spending more money in a couple categories: Alcohol and Smokes. This is something that I will need to adjust and eventually fix but for this week I’m just going to increase each cateogry by $10 to cover closer to real amounts. I can’t say I’m proud about either of these and its about time to start decreasing the amounts. Its not that I can’t continue to afford paying money for them I just want to get out of debt before I start enjoying my money.

Other than the Smokes and Alcohol categories I am not going to spend money on eating out for lunch. I had success with this last week and if I manage to keep this category down over the long term I will be very happy. Its extremely easy to spend $10-15 a day eating out for lunch. Over a week that adds up quickly. Watch for some updates on the budget page in the next few days – hopefully I’ll have time to review my expenses and start putting together a plan to clean up some of the debt, that is my goal for this week.

Comments are Back!

Comments are finally back up and running on the site. Its been a while since they were working properly but its nice to have them back.

Handling fear of Money

Being scared of your financial situation and money doesn’t mean that you’re necessarily scared of a pile of coins. For me having a fear of money revolves around having your life controled by your finances. For example if you’re in debt and collection agencies are calling you might be hesitant to pick up the phone. Another example is living from paycheck to paycheck not knowing exactly how you’re going to pay for your lifestyle. For me this hesitation and fear is what I am refering to as having a fear of money.

First off I want to admit that I am still living from paycheck to paycheck and althought I am getting caught up now I did end up getting some collection calls not that long ago. I knew what the calls were about yet I still wasn’t able to get everything in order. I am to some extent still a bit afraid of my money situation. My fear now isn’t how am I going to pay for everything but finding a way to get out of living from paycheck to paycheck. The reality is that this might continue to be the case for a couple months until my wife goes back to work.

How do I handle the fear?

Emotions – I understand that my emotions are going to influence my decisions and I have to keep this in mind. If you’re getting a collections call getting upset at the person on the phone doesn’t help you at all – they’re just doing their job. You’re just upset with yourself and there is no need to take it out on them.

Facts – remembering that emotions are involved go back to the basics – the facts. I keep track of all my spending so I can see where my money is going. If I have to I can alter my spending to get more money

Lifestyle – The reality is my lifestyle dictatates my financial situation. I have grown accustomed to certain things and because the situation isn’t dire I choose not to change anything. But I know that the choices are mine and I can alter the situation, I have the ability to change my lifestyle to control the money.

Help – When it comes to money I really don’t like asking for help it makes me feel like I’m doing something wrong or I’m inadequate and I’m sure that a lot of people are in the same boat. The truth is you need to admit when you need help. For me I turn to my wife – she’s far better at controlling her spending and paying her bills before everything else. When in doubt seek help.

I started this site about two and a half years ago and although a lot about my financial situation has changed a lot also has not. Part of this is my fears around money and actually getting them under control. Sometimes the day to day aspects of life really bog me down and I get lost in the details, when that happens I go to a few sites and get inspired by other peoples successes. Specifically I use Tricia’s Blogging Away Debt because of the success she’s had and the fact that she’s now almost debt free.

Inspire yourself and you can get over your fears.

Are you Scared of your Money?

Emotions and money go hand in hand but it’s something that people fail to think about when it comes to their finances. Most finance books that talk about investments suggest that we keep our investments in vehicles that we are comfortable with. Having no money causes us fear because of the lifestyles that we have become accustomed to. When you’re heavily in debt and collection agencies are calling you hesitate to pick up the phone when its a number you don’t recognize. Conversely if you happened to win the lottery and money is in vast abundance you don’t worry about it and you’re happy with everything you can spend it on. Money and emotions are tied together because of the deep impact that it has on our day to day livelihood.

Personally I would have to admit that I am afraid of my finances. I have been trying to keep a budget for the better part of two years but for some reason I haven’t gotten a hold of my debt. It hasn’t grown at all but it definitely hasn’t decreased very much. I worry about being able to pay all of my bills on time and in this tough economy I am very conscious of the impact loosing my job could have.

Why are we afraid of our money?

There are a number of reasons why I would say we’re afraid of our money and they’re each as unique as we are as individuals.

  • loosing your house
  • loosing your job
  • being able to feed yourself and your family
  • continuing to live the lifestyle you’re accustomed to

This list can continue for pages but the reality is we live our lives a certain way, regardless of what it is, and we want to keep living it this way. To do this we need to have a certain amount of money coming into our bank accounts. If you were to take away this money you instantly have to take away at least parts of the lifestyle. In my opinion its natural to want to keep the lifestyle you live but unfortunately our consumer society suggests that we spend more money than we make and we use credit to get what we want.

In tough times looking at your finances when there is little or no money can bring lots of anxiety and that is a perfectly natural reaction. Do you fear your finances? What do you do to get over this fear? I’ll post my approach to my fear tomorrow but I’d love to hear your thoughts, you can email me at matt@onemillionandbeyond.com as I still haven’t gotten the comments fixed (yes more complacency).

Book Review – Rich by Thirty

Being Rich by Thirty was something I wanted to do when I was younger and had just started working; unfortunately for me the reality is that I’m now 31 and still not rich. I will freely admit that the title of this book really caught my attention and was the main reason I bought it. I didn’t buy this book in some vain hope that I would learn some magical secret to getting rich. I did hope to find some good information about what people have done to get them some measure of wealth.

What I did find was something entirely different; Lesley Scorgie has written what I would consider to be a pretty basic introductory book to personal finance. Rich by Thirty is a great first place to get a good sense of what money and personal finance are. From here you can expand your learning with some of the fields more ‘classical’ works.

I have to admit I was a bit disappointed with Rich by Thirty because it really focused on people who had no experience with money. The book was writing keeping in mind people who are at the end of high school and at the beginning of college and have little to no knowledge of money, saving, or how investment vehicles work. The nice thing about the book is it makes no assumptions about your previous knowledge and starts with the basics.

I won’t pretend to have a vast array of knowledge about investments or even personal finance but I have been interested in the topic for a few years and as a result I’ve learnt a thing or two. For me the book was a good refresher to remind me where I was not too long ago. If you’re just starting out in life and want a good book to give you some basics for Personal Finance then Rich by Thirty really is a great investment.

On the other hand if you’ve read a few personal finance books and know how to put together your own budget then this book might serve as a refresher but it might also not be worth the time it takes to read. Overall having that reminder about all that exists in the world of PF at a high level was nice.

2009 Weekly Budget – Week 6

The budget for the upcoming week is pretty similar to the previous budgets in that most items are the same. The overall budget is higher because this week is Valentines day and my wife and I are planning on going out for dinner. Here is this weeks budget:

Weekly Budget
Feb 9 – 15
Budget Actual
Alcohol $40.00
Food-Lunch $10.00
Food $75.00
Gas $15.00
Entertainment $75.00
Smokes $30.00
Misc $40.00
Transportation $20.00
Stupid $10.00
Total $315.00

The entertainment expense is as a result of going out to dinner. I know that we could potentially do this for free and cook ourselves a nice dinner at home but we don’t go out very often and this is really a treat to ourselves. I have budgeted $75 and hopefully this is more than sufficient for the restaurant that we are planning on going to.

Other items on the list such as alcohol, smokes, food, miscellaneous, gas and transportation are pretty standard from previous weeks and I’ve left them as is, mostly because I haven’t taken enough time to review spending in these categories as of writing this. I think that once I’ve had a look and see just how much I’m spending I’ll have a better idea how to update the budget

The one item that I am going to try keeping down this week is my spending on lunches. I have always struggled with this expense because I don’t like bringing my lunch. I actually enjoy the idea of going out for a break and eating food that someone else has prepared for me.