Should you budget for this?

When we first started budgeting, we were unsure if we should budget every month for things like clothing, our semiannual car insurance or even things like Christmas.

At first, we did. We were building up funds for lots of irregular expenses. Each month we would put away a small amount for clothing, one-sixth of the car insurance and one-twelfth of the Christmas budget, plus money for a bunch of other things, like car maintenance and car taxes. As this money was building up, it bothered me. Here was all this money sitting there in a savings account making nothing, while we were paying interest on our debt. At the time, our car taxes were about $100 a year. Car insurance was $300 every six months. The Christmas budget was $400. None of these items were going to break the bank. We could easily cash flow these things in the month the bill came due or the event happened.

I stopped putting money aside for them and used the money toward the debt. How do I decide what to budget for monthly?

If I can pay the amount in full in the month I need to, I don’t budget for it monthly.

We could pay any of our regular bills that come due without setting money aside each month. Even when we had to replace the transmission on one of the cars, we cash flowed it. My snowball took a hit that month but we were still able to pay all of our bills, put some money toward extra snowball payments and not touch the emergency fund. Replacing the transmission was an emergency and we could have used that fund, but we didn’t need to.

If a bill is so large I can’t budget for it in a single month, I budget for it monthly.

If we had to pay our house taxes in a lump sum rather than paying into escrow, that is something we would need to budget for monthly. We could not afford that payment in July (in our town house taxes are paid annually). Look at the things you pay for on a quarterly, semiannually or annual basis. Could you afford to make that payment in full out of your monthly budget and still pay all your bills and buy gas and groceries? If the answer is no, you need to put money aside monthly for it. If you could pay for it, then you don’t need to put the money aside.

Some people like creating sinking funds or funds for larger irregular bills even if they have the money to pay them out of the monthly budget. If you want to do that, that is fine. Just consider how much you are paying in interest while the money sits there. Could you knock out another debt and free up more cash because you don’t have the monthly payment anymore?

The other thing I realized is that if I put money aside for clothes, I’m going to buy clothes. If I put money aside for home repairs, I will find something home related to spend it on (not necessarily repairs either). Stay intense and get yourself out of debt. Think of that you could do without any debt!

Your pets and the Christmas tree

Yesterday we brought home the Christmas tree. As you can see, the boys were very interested. Laura asked about keeping the tree and your pets safe from one another on the Facebook page. I thought it might be a good idea to explain how we deal with this in our house. Since we have four cats, each one has his or her own pet peeve with the tree. We’ve had to figure out what this is and plan accordingly.

As I stated in yesterday’s post, we opted for a real tree since one of the cats liked to climb into the fake tree and bump all the branches down. It’s very hard for the cats to climb a real tree because it is so dense. When purchasing a real tree, make sure to get one that is very full.

If you are worried about your ornaments, make sure that any breakable ones are higher up on the tree and out of reach of your pets. Opt for shatter proof balls, which we found work very well. We had a number of them knocked off the tree and they did not break. We also keep soft ornaments near the bottom of the tree. Keep the shiny stuff on the top half.

We have found that garland works better with our cats than tinsel. They don’t eat the garland, but they might try to knock it off the tree. You might want to try beads or ribbon on the tree since it’s not so shiny. Tuck ends of the garland into the center of the tree to make it harder for pets to loosen it. They also don’t see the dangling ends and try to play with it.

Finally, if you are worried about pets eating the tree, there are spray products you can buy at the pet store that are supposed to deter them. The one that we purchased was a garlic/chili based spray. It doesn’t smell like either but it is supposed to deter pets because they won’t like the taste. The problem is our cats like garlic and chili. One of our cats loves BBQ chips, so we woke up one morning to find the cats licking the stuff off the tree. Our cats are strange so it might work for your pet.

For cats, make sure you have a water bottle handy to spray them if they don’t behave. After a few days, your pet will most likely lose interest in the tree and you’ll be ok. Our cats have already lost interest. After the first hour, the boys had enough of trying to get into the tree and haven’t touched it since.

Just remember that you love your pets and this is a very exciting time for them as well. Christmas trees are shiny and have fun things to play with. Don’t get frustrated when they act like pets should. Keep a good spirit and enjoy them.

Can I justify a tablet?

For the past few months, I have been contemplating a tablet computer. I have looked at them, played with them and talked to other people who use them. I have done research on different models to see what they can do. Now, Jeff has decided that he wants to get me one for Christmas… I am torn.

There are a lot of things I could do with a tablet that would make my life so much easier. It would be extremely helpful for bringing documents to meetings and taking notes with clients and in board meetings. It would allow me to get many of my magazines in digital format, clearing up a lot of clutter in my house. I could use it to write notes for my classes and bring the tablet to class when I teach. It would also be much easier to use than the laptop for storing and using recipes. I could even see myself writing blog posts and working on my novel (yes, I’m writing a novel) while waiting for appointments. There are certainly a lot of uses for a tablet that make it much more convenient that carrying a laptop around with me. Plus, I have a bad back and am not supposed to carry my laptop around with me.

There is also one huge con… the price. The tablet pictured above is a Samsung Galaxy which will cost me about $500. My other issue is that I always get the new technology in the house. Poor Jeff gets my hand-me-downs. When we get a new computer, it’s generally for my business and Jeff gets the old one. It would be nice for him to get the new toy productivity device for once. He has stated that I am the wife and I should get the new toy productivity device (he’s such a good husband).

It’s not that we don’t have the money. We actually saved up a bunch of money for vacation but due to our busy schedules, we aren’t going to be able to go. We’ll still have money left in the fund. It’s just the idea of spending that much money. I’m terrible about big purchases for myself. I was willing to drop $450 on a leather coat for Jeff (luckily we found one for 70% off that price), but I would never dream of spending that kind of money on myself.

Jeff has given me a week to decide if I really don’t want the tablet. I could use any and all advice on this one. I’m out of my frugal comfort zone. HELP! Also, if you have a tablet let me know what you think of it. Was it worth the money? How has it made your life easier?

Do you Black Friday?

I have never been one to wake up at 4am for anything, especially Black Friday. It’s too early, too crowded and unless you are looking for the 10 laptops that Best Buy is selling for $3 each, the deals aren’t that great.

My husband, the techie, seems to think that Black Friday as a day is almost dead. I’ve been getting emails for the past two weeks about Pre-Black Friday, Not-Black-Friday Friday, and Super Not-Black-Friday-Black-Friday-on-a-Thursday Sales. It’s pretty insane. All these retailers trying to get your cash before the Black Friday sales begin. With the internet, most of the sales have already been leaked so other retailers can try to do better beforehand.

I also learned a few months ago that retailers have to order their holiday merchandise in April. In April of this year, the economy looked like it was growing at a good clip and economists had a rosy outlook for the rest of the year. Retailers, therefore, ordered a lot of inventory. The economy has cooled a bit and many retailers are now worried they are going to be stuck with excess inventory this holiday season. I think this is why we are seeing so many early sales. Retailers understand that the days of huge credit card Christmases are over for many people and there are very limited dollars out there this season. Those retailers are going to be scrambling for your business.

So what is my plan? I’ve put my budget together and I’m going to start my list. I will be checking Amazon’s deals on Thanksgiving via my smart phone since they generally have some interesting deals. I will then check the retail sales figures the Monday after Thanksgiving. If the numbers are worse than expected, the sales are going to get much better in the coming weeks. If the numbers are good, but not great, the sales will continue after Black Friday is over. If the numbers are somehow great, I’ll be doing most of my shopping online. I have signed up for emails from all the retailers I plan to shop with and I’ll be checking my ebates.com and Upromise.com accounts for bonus cash back offers.

I will be sleeping in on Black Friday and enjoying my day off. Where will you be? How do you do your holiday shopping? What’s your plan to be the best deals?

I’m sorry

I’ve been under the weather for about a week now, which is why I haven’t updated at all this week. I’ve also been extremely busy with work and school, which is a terrible combination when you are sick. The great thing about being sick is that you really don’t spend any money.

WARNING: Getting sick is not a good way to start being frugal!

I hope your October budgets went well. We did really well on our food budget and didn’t spend much on other things. I started my Christmas shopping and I had a wedding to go to this month. Thank God for the gift account. Having that money put aside saved me from breaking my budget this month. I haven’t make November’s budget yet, but I haven’t spent any money either. I’ll try to get to that tomorrow and will report soon.

Christmas Shopping

I’m pleased to report that most of my Christmas shopping is finished. That doesn’t mean all the Christmas knitting is finished, but I’m pleased with my progress.

The biggest problem I have each year is the nephews. The nieces are easy. I knit them something pretty and they always love it. Nephews don’t seem to like anything that doesn’t involve a video game or flashing lights. As the boys get older (2 in high school and one in the high single digits), they are harder to shop for. Since we don’t have kids yet, we don’t know what the latest cool thing is. Plus, have you seen the prices for the latest cool things? Yikes.

So, I call out to you, my frugal clan to ask for your help. How do you satisfy the male children in your life?

WARNING: The holidays are coming!

Today is the last day of September which means that tomorrow is October first. Soon it will be Halloween, then Thanksgiving and Christmas is right around the corner. Now, I’m sure you all know that these holidays are the same time every year. Yet, every year we all start to panic. We didn’t save as much as we wanted. We didn’t start making gifts in May like we promised ourselves we would (my yarn was shipped today).

It’s not too late to start a plan for the holidays. There are still a lot of things you can do to make sure you don’t have to whip out those credit cards to make the holiday great.

  • Make a budget. If you haven’t been saving up all year for this, you need to figure out how much money you can scrape up for all your holiday obligations. Don’t forget Halloween and Thanksgiving. You have to pay for these things too.
  • Once you have a budget, make a list of everyone you need to buy gifts for. Don’t forget teachers, babysitters and other people that we tend to forget until the last minute. It’s because of those purchases that you end up over budget. Also jot down some ideas for each person. When out and about, look at your list to see if there is anything on sale that you could pick up early.
  • Allocate your budget between everyone on your list. If this seems impossible, maybe you need to have a family meeting at Thanksgiving and propose a secret santa instead of trying to purchase gifts for everyone.
  • If it looks like your budget for your kids is out of control, it probably is. I always think it’s funny when people buy gifts for kids and the kids end up playing with the box. I’m not suggesting that you give your kids a box but think of other things you can do instead of spending money. Consider giving the kids your time. Most of us are so busy that the one thing the kids really want is more of mom and dad’s time. Give your kids movie night with mom and dad or bowling night. Make up a cool looking coupon on the computer and wrap it up. Make up a cooking class and give that to your kids. Be creative.
  • Make things. Consider taking family photos and framing them with inexpensive frames. Create a family cookbook. Make cookies or candy. I love homemade gifts. They are cost effective but the recipient appreciates the effort you put in.
  • Be realistic. Don’t plan to make 800 pairs of mittens between now and Christmas. It’s not going to happen. You’ll stress yourself out and then end up going over budget as you rush to the mall at the last minute.

Start thinking about this now. Start budgeting for this now. Put the cards away and pay cash this year.