Friday, January 29, 2016

January 2016 Expense Report

This is a review of every penny we have spent in January. I am doing this early because I have decided not to post on the weekends and we are done spending for the month. Blogging takes a lot of time and energy so I need some down time to play. If there is a category that you don't see, it is Here and it has been updated because I forgot to tell you how we do charitable contributions which was pointed out to me by "anonymous" in an accusatory manner.

Electricity&Gas        $ 162.64        Heating season

Cable TV, Int.&Tel.      129.83        $10. Cr.-Bad Svc.

Netflix                          7.99

Alarm Monitoring          29.85

Household Goods        258.09        Non-Food

Property Taxes          3399.21 

Rest.&Take Out             17.48       OOP-McDonalds

Medical                      571.91       Drs.,Drugs&Ins.

Groceries                   462.12       Food Only

Lottery Tickets             22.00       

Gifts                          191.75       OOP Only

Gasoline                       16.30       Auto

Salon&Barber                82.00      Hubby&I

Total Expenses          $ 5343.17 

It was a spendy month but fortunately our available cash in our checking account was higher this month than normal. So we were able to pay our property taxes without touching our investments. If you back out the taxes, we spent $1951.96 for everything else. Not a bad month.  

We will try harder next month to lower the everyday expenses. However, we were able to save $5,000. this month. And by save, I mean actually add it to our investments and our net worth. So we are on our way to our $50,000. goal. We hope we can keep that total rolling up even without extra cash in the checking account. We'll see!

I hope you all have a wonderful weekend. I'll be back posting on Monday.

Thursday, January 28, 2016

Did You Notice Any Debt?

The one thing that you did not see in our minimum spending plan yesterday was debt.  If you are aiming for financial independence or retirement, you want any outstanding debt that you have paid off.

Actually any money goal that you want to reach should be done only after all debt is paid. Debt will prevent you from reaching your goals.

When you are paying interest on a Visa, Mastercard, Discover or any other credit card, you are actually sabotaging your goals. You can't be financially independent if you owe money to anyone. That interest accumulates 24 hours a day. Getting rid of it as fast as you can should be your only goal.

So how do you start?  Take a look at all of your credit cards. Make a list with the highest interest card at the top of the list and the lowest interest card at the bottom of the list. Pay the highest interest card off first. On the highest interest card, make the minimum payment plus all the extra money you can accumulate that month by being very, very frugal. Do this every month on the highest interest card and just pay the minimum on the other cards. When the highest interest card is paid in full, work your way down the list doing the same thing until they are all paid off.

What else do you have to do? Vow to never use a credit card again until all of your credit card debt is paid in full. Then cut up all but one or two cards. No one needs more than a Visa and a Mastercard or a store card. Then vow to never use a credit card again for anything unless you can pay the bill in full every month. If you do, you are derailing any goals that you finally are able to set now that you are debt free.

Next I would work on paying off your mortgage, a home equity loan, college debt, an auto loan, personal loan or any other debt you owe. Do the same thing paying the highest interest loan first, with the exception of your mortgage. Pay that off last because it at least gives you an income tax deduction. Although lawmakers are trying to get rid of that tax deduction. If that happens, then use the formula of paying off the highest interest loan first, etc.

Some people feel that they can make more money investing than paying off their mortgage early. Good luck with that especially with the market today. I have seen people's nest eggs dissolve in the stock market. They have visions of making a fortune in the market and so they turn their money over to a broker who is more interested in making a large commission than what happens to your little nest egg. They lose your money and you still have your mortgage. 

We paid off our mortgages as fast as we could knowing that we would never be financially independent until we actually owned our home. We have paid for the last two with cash.  In retirement especially, you do not want to be owing a mortgage. Paying property and school taxes is enough of a burden.

So without owing any debt, it would cost us  $27520.44 yearly on a bare bones budget. If we had debt you could see how that could add hundreds even thousands to how much we would need to have to just live in retirement and keep our home. So be sure to add in your debt payments to your bare bones budget when you are figuring it out. Then see how much better off you would be if they were paid off. You would be so much less stressed if you lost an income or had some other kind of emergency.

I am not in any way scolding you for having debt. I just want you to realize what that debt is doing to your life. Wouldn't you rather be able to set life goals and be able to work toward them than be burdened by your debt?

We are not rich. We are comfortable and live well below our means so that we can always stay comfortable. We will be retired 15 years this year.  Costs have gone up over 33% in those years and they will continue to go up. By saving every month and investing wisely, we make sure that our money will outlive us.  We have almost no stress in our lives and that is because we owe no debt. Our money belongs to us. That is what you should be aiming for.

Wednesday, January 27, 2016

Have You Ever Looked at What Your Bare Minimum Spending Is?

Have you ever looked at how little you could spend each month - your bare minimum amount? I haven't done this in a few years now and I think it is time to take a good look. Especially since we are trying to save $50,000. this year out of our net income, which is after Federal and State Income taxes.

You all know that I track my spending and investing every month to the penny. But it has been a while since I took a good look at how much over the minimum I am spending. So in order to do that, I am going to set a baseline. I suppose you could call it a budget. But to me it is just the minimum amount we have to spend each month for the way we want to live.

So let's take a look and we will start with utility bills.
Our yearly electric and natural gas bills were $1736.65 for the past year. It averages out to $144.72 a month. Is that high? I don't think so considering we have a 2000+ sq. ft. home and live where it is cold and snowy all winter. Would I like to reduce that amount? You bet and I  try every month by carefully watching our usage. 2014's bill was $1998.66. So I reduced our bill this past year by $262.01 or about 13% even though we have had rate increases. If I can do that again this year, I will be very happy.

Our garbage and recycle costs are included in our property tax bills. We also have no control over this cost because garbage and recycle pickups are required by our town. I yearn for the days when I could just take the garbage and recyclables to the dump each week for no cost. I just took the kids along with me when they were little. They thought it was fun.

Water and sewer is billed quarterly and we also get a large charge included in our property taxes for maintenance of those systems. The quarterly bills for the year were $ 234.05 or about $19.05 per month. The water was a very low year for us because we only used the sprinkler system 3 times all summer since we had lots of rain.

Cable TV, Internet and Telephone is about $ 1677.96 a year or about $ 139.83 (I fought for a reduced rate) a month. Each month changes by pennies. I have no idea why. These are a necessity in our home because Hubby insists on having it. If I had my way, I would cancel the Cable TV and just watch shows on the computer, the Roku Netflix and Amazon Prime. That should be enough entertainment for anyone. Time Warner just had a rate increase for both TV and Internet so I don't know how much it is going up until we get the bill after the increases. Then they will try to increase the bill again in May on our yearly anniversary. I will fight to keep the bill the same. The telephone is a necessity for now. If we went bare bones, we would drop TV and telephone and keep internet. We would get another cell telephone with nothing but dial tone to use for our alarm system.This would cost about  $50. a month total.

Guardian Alarm System monitoring is $29.85 a month or $ 358.20 a year. Many people ask why we pay for alarm system monitoring. If your home has ever been broken into, you wouldn't have to ask.     

Netflix was $ 7.99 a month or $ 95.88 a year but it is about to go up to $ 8.99 a month or $107.88 yearly. 

Amazon Prime is costing me $ 106.92 yearly or $ 8.91 a month because our state requires 8% sales tax. We order so many necessities through this service that we get free shipping on that it has saved us a bundle. We also enjoy all of the movies, music, books and cloud storage of our photos. This is priceless to us. This is an example of spending money to save money. Sure I could shop for everything in local stores and just use Netflix but Prime saves me time, energy, and gasoline and at my age that is a bonus. 

Food which is groceries. I have been spending a lot in this area lately. I believe that if Hubby and I ate all of our meals at home we could with careful planning reduce the $ 400.+ bills a month to $ 200. a month. But that would not leave me wiggle room right now to feed guests, be charitable to someone in need for a dinner dish, etc. So I would be happy if right now I just spent  $300. a month heading down to $200. So I have to work at this.

Restaurant meals I would like to keep below $ 50. monthly or $ 600. per year. Bare bones we would eat at home all of time so our minimum would be 0.  

Household goods (no food) runs about $75. per month or $900. yearly.

Haircuts for both of us run $810. per year or $67.50 a month including tips. Bare bones would be $ 150. per year for Hubby and I would grow my hair and just have him trim it once in a while. 

Medical is extremely high. The total for the year was $7500. out of pocket which is $ 625. a month. I have no idea what the bare minimum would be. Sure I know what the insurance is but we see a lot of doctors and the dentist quite a bit for both of us. Yes when you get old they have you running to appts. and for labs constantly. We are trying our best to lower these bills. So I honestly right now would have to say this is the minimum.  

Auto insurance and homeowners insurance bills totaled $1337. last year or $ 111.12 a month. I will be working on getting these down.

Automobile maintenance is usually just oil changes and snow tires put on and taken off. We also pay about $80. for AAA. Those things run about $ 380. for the year or $ 31.67 a month. This could go up as the car ages but for now the car is running great.  

Gasoline last year averaged $80. a month for a total of $ 840. a month. This includes many long trips a year.

Household maintenance ran $2500. last year. It was high because of exterminating services for voles in our lawn which cost $1000. We have decided not to hire them next  year because it did not get rid of them. With fields behind us we will just have to live with them until they build behind us which may be this year. We do pay for lawn service for fertilizing which runs us about $ 350. per year. The rest of the $2500. was for furnace and A/C checkups and miscellaneous maintenance. I am hoping to reduce this down to $ 1500. for this year. 

Gifts have been budgeted for $ 1640. for this year or $ 136.67 a month which will include wrapping paper, cards, and any shipping that has to be done to get them to where they need to go. I could make all homemade gifts and ship all year and that might save me 1/2 or $68.33 a month.

Entertainment such as going to the Zoo or some other place usually costs us about $ 300. per year. 

Vacations have been an every other year occurrence and we usually end up spending about $3500. So I don't budget for them. I just pay them out of current funds when they occur and they could be given up all together for a minimum spending plan. I believe as we get older and older, we will not take vacations anymore. P.S.: Hubby does not like to travel so it is usually me that goes.    

Property and school taxes for the year were $  7862.66 out of pocket (which is after a state reduction of school taxes) which everyone can apply for).  We get no reduction for old age on property or school taxes because we have too much income. These taxes are totally out of our control. Taxes always seem to go up so we have to plan for them. I suppose we could sell our home and rent but it would cost us more than that a year to rent. We do have home maintenance costs but it is worth it not to share walls with neighbors.

My cellphone is $596. yearly using my son's account. That is about $ 49.67 a month. Many of you have shown me how to get it cheaper and I will be looking at that come December. I already paid my son one year in advance. The cellphone is a necessity for when we leave the house especially when we are out in the car for a  medical emergency or to call AAA.

We are buying no clothing this year.

Here would be our bare bones budget monthly if it became a necessity:

Electric and Gas:               $ 144.72
Water:                                  19.05
Internet & Telephone:            50.00
Alarm Monitoring:                  29.85
Netflix:                                   8.99
Groceries:                           200.00
Household Goods:                 75.00
Haircuts for Hubby:               10.83
Medical:                              625.00
Auto & Homeowners Ins:      111.12
Auto Maintenance:                 31.67
Gasoline:                              80.00
Household Maintenance:       125.00
Gifts:                                    68.34
Property & School Taxes:      655.22
Cellphone:                            49.67

Total:                                $  2293.37  

That would be $27520.44 yearly. In the bare bones budget there would be no eating out, cable TV, entertainment, or vacations.  We are spending a lot more than this now but I am happy to know that we could live on less.

If you haven't looked at what it would cost you to live on a bare bones budget, do it this week. Anyone could have a cut in income at any time. A spouse could die and you could lose income. A wage earner in the household could lose their job or even take a pay cut. Maybe you have an extremely sick spouse who only has a couple of  years or months  to live.    For seniors when one spouse dies, sometimes their partner would lose some pension or social security income. Now is the time to look at this before something happens. Better to know ahead of time if you can afford to live in your own home or if you would have to sell it. If you know that you will have  the income to cover something like this, you can breathe easy. If it shows you don't, now is the time to do something about it.

Tuesday, January 26, 2016

Spent a Bit Of Money Today

I love my Hubby dearly but sometimes he can be a  big pain. Can any of you say that about your Hubby?

Mine stood in front of the snack pantry yesterday with the door wide open just starring at the contents and after about 3 minutes he closed it. Then he went to  the regular pantry and did the same thing. Then he went to the refrigerator and did it again. He didn't take anything out of any of those places. I asked him what he was looking for. It was lunch time and he says "There's nothing to eat!" He should have added to that statement and said "There's nothing to eat that I don't have to cook or prepare." This was not the first time he has done this and it is frustrating to watch.

He actually reminded me of my boys when they were teenagers who would do the same thing and make the same statement. I sometimes think that men never grow up.

Now I have to tell you all three places were full of food as were both freezers. I was not going to stop what I was doing and cook something for him. I am in the middle of organizing our home. I was not going to break my rhythm. He finally went back to the pantry, took out a can of tuna and made tuna salad. But he was pouting as he cut up the apple that he put in it. :-)

Thinking more about it last night, I decided to do something about it so that it never happens again. Not having the time to do what I really wanted to do which was make a whole bunch of homemade things, I made a list and went shopping today.

At the bank yesterday, I had just cashed a $ 187. check that we got back as a property tax rebate. I took all of that money with me and I spent every last penny. 

I purchased healthy snacks and some not so healthy snacks. I purchased some organizing things and some plastic containers. I purchased the first cold cuts that I have purchased in a long time. I got turkey, Virginia baked ham and salami. And while I was at it, I got some wrap for the baby shower that I am going to, some adult birthday wrap and three different rolls of ribbon. I also bought six items for the baby gift basket. While I was at it I purchased an office letter tray to put next to my computer to corral what I am working on there. I also picked up 4 rolls of select grip easy liners.  

When I came home, I put everything away except the cold cuts and snacks. I corralled them into some containers I had and a few of the new ones. 

I put the cold cuts in the container pictured above along with our Swiss cheese, provolone, and American cheese slices. I also added some pepperoni slices that were left in my meat drawer and a bottle  of Dijon mustard. Then I put it in the deli and meat drawer. When Hubby needs a sandwich all he has to do is take the bin out, grab some mayo, and put it all on the table. Next to that bin are all kinds of 8 oz. cheese bars, some pub cheese, and a port wine cheese ball.

Next I organized three snack bins for the refrigerator that he can just pull out and take out what he wants. Then I made up bags of carrot sticks and celery sticks and put them next to the ranch dip for vegetables. I added a container of hummus, some Breakstone cottage cheese doubles, and some Wholly guacamole. Theh I added another container of mixed fruit cups, some SF parfaits, and some applesauce. The last container has light and regular Babybels, some cubed cheeses that I cut up, and some peanut butter and Polaner 100% strawberry fruit. There are crackers in the pantry and we always have an assortment of bread. We also always have tortilla chips. Did you notice that I labeled everything? I wanted to make sure that he can find whatever he is looking for.

Lastly, it was time to corral the pantry snack items. One basket holds the bagged chips, etc. The other basket holds salsa, cheese dips, craisins, raisins, snack crackers, and granola bars.

With all of this organized, I hope Hubby can manage to feed himself so that I can continue to get things organized in the house. 

When I get going on a project, I hate to be interrupted. I hated having to spend the money on ready made snacks but it was money well spent. I don't have the time and energy to make my homemade right snacks now. It will get done and  eventually all of the ready made will get replaced with homemade.

Monday, January 25, 2016

Using Up What We Have and Other Things

I was driving in the worst rush hour traffic that I have ever seen very early this morning to get to an appointment. After the appointment I stopped at Top's to pick up eggs that are on sale this week for  $1.00 a dozen. I haven't seen that price in a while so I grabbed 3 to add to my 2 dozen I had in the fridge. I also picked up some boneless chicken breasts at  $1.88 a lb., some creamers and juice. That is all I will be buying this week.

Then I went to the bank to cash a check. I also ordered 100 checks which are free to me once a year because of a special account we have with them. Since hubby and I use our rewards credit card for almost every purchase, the free checks will last us about a year and a half. 

When I got home, I made us cheese omelets and rye toast for breakfast. Then I decided that today would be an odds and ends day.

I have been working on a baby shower gift basket for a neighbor. I decided to add the Burts Bee's gift set  that I showed you I purchased the day after Christmas for Mommy and a set of those special scissors I showed you for Daddy that I bought for  service people at Christmas time. I had just one left. They open kids toys and battery packs easily. They are already bought and paid for and will help fill up Baby Boy's basket. I will take a picture of the basket when it is finished which should be soon.

I have also been putting together a basket of items for guests to use when they stay with us. I am going to add the pictured towel set. I got these for free when the supermarket was giving them away for purchases. Everyone likes using nice new white towels. I will also show you that basket when I am finished with it. Right now it is a slow work in process.

Then I decided to clean the third bedroom closet. This bedroom is used only when my grandchildren come to stay. The closet was a mess even though I cleaned it a while ago. Hubby had tossed a whole bunch of photo albums on the floor. I had thrown Christmas wrapping paper after I used in on the floor.  My gift box was a mess.

So I emptied it. Yup, everything came out. All of the items that belonged other places were put in a very large laundry basket and taken to the rooms they belonged in. The photo albums are neatly tucked away on the closet shelf to keep them safe. Other items were discarded.  Then I thought about how I wanted to use the space below the clothing rod. I decided it will be my gift and gift wrapping closet. I also store the extra leaves to our dining room table in it and a heater to use in the winter when the grandchildren come. They are stored on the right hand side out of the way. The only other space I have is the basement where those items would get ruined from moisture.

Here is the empty closet with my gift wrap containers. I took inventory and realized that I have hardly any wrapping paper except Christmas paper. So I will fill in some of those spaces the next time I go to the Dollar Tree. I need ribbon too. Most gifts I use the decorated brown paper for. You can just see the bottom of that box to the left of the Christmas wrap.  As soon as I get the gift container organized, it will be placed in there also.  

When I emptied the closet, I found two rolls of wallpaper that I have had forever. I had purchased them years ago to do a project that never got done. They are beige with delicate pink flowers with leaves. I hated to throw them out. So I have decided to line the drawers in my nightstand and dresser with the paper.

So in this year of using what I already own, these are just some examples. I will be using many more examples during 2016.

Dinner will be leftovers from last night. The rest of today and  tonight, I will be working on other odds and ends. I seem to have a lot of energy today. 

Sunday, January 24, 2016

A Busy Weekend

It has been a very busy and tiring weekend for us.
Our grandson came to stay overnight about noontime yesterday. We spent the afternoon playing Buggo board games. It was so much fun with him. He is very competitive and for a logic game, he does really well.

After picking up a Chicken McNugget meal for him and chicken sandwiches for us, he and I spent a bit of time watching "The Octonauts".

It was off to bed a little earlier than normal after reading some of the Berenstein Bears. We had to get up very early this morning to drive him to swimming lessons. We just love watching him in the water.

When we got home I made a Blueberry Croissant Breakfast Bake for breakfast. I forgot to take a picture before we ate it, so here are the leftovers.  I had to spread a little frosting on because he asked for some.  Everyone loved it. 

Then I took my grandson bowling since our local bowling alley had $ 1.50 games today. We bowl whenever we can because we both love doing it together. It doesn't matter what our scores are, we just have such a good time. 

When we got home his Dad was here. He asked if he could watch some "Octonauts" again. We said yes. That gave Hubby, my son and I a chance to chat and  for him to tell us all about the party they went to last night.They just left to go home a few minutes ago.

We had a wonderful weekend without spending a fortune on entertainment. We spent under $26. for bowling (2 of us) and McDonald's (3 of us). We don't spend money every time he stays with us. It's a special treat for him that stays within our budget.

I love having him come to stay for a weekend but he really tires me out. So I am off to bed to take a nap.

We will be having a late homemade spaghetti with hot sausage dinner when I get up. 

I hope you all had some wonderful family time this weekend too.

Saturday, January 23, 2016

Extreme Frugality? You Be The Judge!

Do we practice extreme frugality? That depends on your definition. If saving money on both the big things and the little things over the past almost 50 years is considered extreme, then we must practice it. Did we save that money just for the sake of  saving it? Heck no! We always had goals and still have a goal that we are working towards.

Our very first three goals in order were: saving for early retirement, putting Hubby through his last two years of college for his B.S. and then putting him through for his M.P.A, and saving for a down payment on our first home.

As our lives changed, our goals changed. When our children were born, college educations were added to the goal list. But the saving for retirement goal was never taken off the list until we achieved it.  

Did we have to be extreme to achieve these goals? The answer is complicated. If you think watching every penny is extreme, then I guess we were extreme. However, we watched those pennies so that we could reach our goals without sacrificing anything that our children needed. We only had one income and it was an average middle class income during the years they grew up. They went on vacations, had an in ground swimming pool in their backyard, went to private schools for junior high and high school, and both got college educations without a lot of debt. Did they always have the most expensive "in crowd" jeans? No, they wore Levi's. Did they get money to always go to a movie every weekend? Not always. Were they involved in expensive sports teams? Of course: soccer, football, basketball and track.  Did they lack love in our household? Absolutely not! They knew how loved they were no matter what was or wasn't purchased for them. 

If you were to ask them today if they lacked anything, they would tell you a resounding NO. But they knew that money didn't grow on trees because we taught them the value of a dollar. They didn't graduate from college and think that the world owes them a living. They had to work right away because it wasn't our job to support them any more. Have they had some rough spots? Sure every one does. Did we help during those rough spots? Of course we did. But they watch their dollars today the same as we do. They are saving for early retirement and their children's college educations and have been since they got jobs years ago. They already own homes.

Our list of what we do frugally will be different from someone else's list. Our list may seem extreme to some people the same as their list may seem extreme to me. But we all have a right to do what we want and make our own choices with our money.

We may make substitutions to save money, make repairs the DIY way rather than hire someone, never go to a movie in a theater, and rarely eat out because my food is healthier and better. But I will never save money at someone else's expense. For example, I won't stiff a waitress or hairdresser their tip to save money. I won't take more condiments than are needed at a fast food restaurant just to bring them home. Other people pay for that greediness when the prices need to be raised.

Someone who is really extreme may use cloth for toilet paper. They may make their own cloth pads to save that expense monthly. They may use the gym or work shower everyday to save water at home. Sure you have paid for your gym membership so you can use the shower. But I have known people who have gone to the gym or the Y before they go out at night just to take a shower. These are not things that I have ever done nor would I do. But if other people do them, I will not judge their choices.

So am I extreme? Perhaps. But we have lived well, done everything we have wanted to do and still do. Have we ever gone to a movie in a theater, you wonder? Yes, may times over the years. But we prefer these days to watch our movies in the comfort of our home on the big screen TV while making our own snacks. Do we live any different than we did years ago? Yes, we have a few creature comforts that we didn't have then. Mostly being able to hire people to do things for us that we can no longer do. But we saved for those circumstances so we are reaping the rewards. 

So if someone thinks that we are too extreme that is their problem not ours. We love our life and how we do things and we are not about to change any time soon. If someone wants to spend and spend and not save for tomorrow then that will be their problem when tomorrow comes. I will not judge nor do I want to be judged.  

All I can tell you is that if you watch your pennies your net worth will grow. You will reach your goals and you can retire early and be your own boss.  Just make sure that the goals you set are within reason. It takes determination and we can all find that within ourselves.