With Good Things



It’s been awhile since we set up our spending plan (aka “budget”). How has it been working for you? Mine has been been messed up lately due to some unexpected expenses and purchases. The good news about a spending plan, is that it’s all about SPENDING, so it’s okay if we need to spend a little extra money sometimes (especially if you’ve planned for it and have already saved up). Let’s look at a couple of common budget pitfalls and how to avoid them:

Annual Expenses
By now we should be really good at tracking our ongoing expenses (utilities, groceries, etc.). However, annual expenses, like property taxes, are another story. An easy way to plan for these is to take the yearly expense amount and divide by 12…then set aside that amount every month to be ready for when that expense is due.

Unexpected Expenses
Here is where a spending plan can get majorly derailed (like mine has this month). Who knew that the clutch would go out on the Subaru…the Civic would also need a new clutch (and a water pump, and a timing belt)…the Fit would need new brakes…and the Subaru would get a nail in a tire (resulting in the need for 4 new tires)–all in the same month?!?! Good thing we’ve been working on our emergency fund and had money on hand to pay for these expenses!

While we may not be able to plan for every unexpected expense, we can do a bit of planning: have an emergency fund/savings plan in place, and use past events/expenses to plan ahead. For example, the Fit lasted 4 years before having to replace the brakes. So I know that 4 years from now, I’ll have to dish out for new ones…

Be Flexible
Don’t be too restrictive with your budget or you may just give up on it. A spending plan can change from day-to-day or month-to-month depending on your spending habits and income changes. If you need a new pair of shoes this month, you can plan to spend less in another category to pay for them. Over time you may find that your original budget doesn’t work any more, so make sure you review at least once a year and make necessary updates.



Our previous two posts had us track our spending and analyze our debt…so now that we have our expenses totaled up, it’s time for the next steps in our spending plan.

  1. Record & Total Your Sources Of Income
    Be sure to include any outside sources of income (self-employment, investments, etc.) and notate both the gross (total) income and net (take-home pay) income. It’s important to know exactly how much we make, but for ease of the budget, we are going to use the net income amount in our spending plan.
  2. Subtract Expenses From Income
    Test the first stage of your spending plan by subtracting your monthly expenses and debt payments from your monthly earnings. If your end result is more income than expenses, you are off to a good start! If your expenses put you in the negative, or if your “excess” income is less than you anticipated (remember, we haven’t factored in extra debt payments or (gasp!) savings yet), this is a good time to:
  3. Make Adjustments To Your Expenses
    Go back over each expense and look for places to make cuts. Some quick ways to cut expenses are: cancel your landline, eat out less often, and downgrade your cable subscription. We will look at more creative ways to cut expenses later on, but for now our top priority is to get our spending plan in place and at minimum, to where we are spending less than we make.

OK, step back, and take a deep breath! You’ve completed the most difficult parts of creating a spending plan! Next time, we’re going to learn how to put our spending plan to work for us, but for now…you’ve got the basics down: how to track your spending, analyze your debt, and make adjustments to your expenses in order to stay afloat.

Are you proud of yourself? You should be!



Now that we’ve got our recent spending tracked, it’s time to get a good look at everything we owe, and what interest rates we are carrying with that debt.

  1. Analyze Your Debt
    Once again, we need to pull out all of our bills and statements to find out everything we owe. It might not be pretty, but the sooner we assess the damage, the sooner we can get on track to reduce and eliminate it! If we are going to fight this, we need to know our enemy!

Gather all the information about each debt, including total debt amount, interest rate, minimum/monthly payment, and due date. Create a table or spreadsheet with this information.

Creditor    Balance    Interest Rate    Payment    Due Date   
XYZ Mortgage Co. $123,500 5.5% $879 1st
Student Loan Co. $43,000 3.0% $75 20th
ABC Motors $19,750 6.9% $450 25th
Visa $6,800 18.9% $183 15th
Amex $3,900 23.0% $126 15th
Dept. Store $495 29% $68 1st


Have you accounted for all of your debt? It’s a good idea to contact the 3 major credit bureaus (Equifax,Transunion, and Experian) and ask for a free credit report to make sure that you don’t have any debts in collections or debt you’ve forgotten about. Be sure to check your report for any late payments, or even any incorrect information you may have to dispute.

Now that we’ve laid out all of our debt and gathered information needed for our plan of attack, we need to commit to eliminating that debt! (New rule: don’t add to your debt!) Ready for the next step of our spending plan?

What have you discovered about yourself in this step?



Everyone from millionaires to paycheck-to-paycheck spenders should have a spending plan. A spending plan will help you get out (and stay out) of debt, save for the future, and achieve your financial goals. Don’t know how to get started? Here are the first steps to get you on your way to financial freedom using a spending plan:

  1. Track Your Spending
    This is probably one of the most important pieces of putting together a spending plan or budget! If you don’t know where your money is going, how can you make a plan for it? Now, for those of you tempted to cheat and either just “estimate” your spending, or to start cutting back on spending just to make it look good on your statement…don’t!

The best way to track your spending is to gather up your past 2-3 months financial statements (bank accounts, credit cards, etc.) and use them to compile your recent spending habits. This way, you will get an honest, full look at everything you’ve spent recently and have unaltered data to work with.

You don’t have buy new financial software to manage your spending plan; there are plenty of free sites (like Mint.com), that will automatically retrieve your transactions and categorize them for you. Be aware that you will have to manually adjust some of the automatic categorizations. For example, if you shopped at Target and bought a few groceries, a pair of shoes, and a bottle of shampoo, Mint.com might categorize the entire purchase as “shopping” and you’ll have to tell it that you spent $23.64 on groceries, $18.95 on clothes, and $3.95 on personal care.

Now, I realize that since we are looking at transactions from the past month or two, you might not remember how much you spent on groceries, clothes, and personal care on that particular trip to Target. (New rule going forward: keep all receipts!) The main purpose of this step is to get a handle on how much you spend on a regular basis (even if you can’t put it in a specific category). If you are spending more money than you make, it doesn’t really matter if it was shoes or shampoo, you need to be aware of your spending habits in order to make changes to those habits.

After you get your recent spending totaled and (mostly) categorized…are you surprised by any of the numbers? Do you spend more on lunch during the workweek than you thought you did? Are you wincing at how much your credit card payments are? Did you tithe at all? The results of this exercise can truly be eye-opening! Don’t cry (just yet)…we’re going to take this data and use it in the next steps of our spending plan.

What have you learned about yourself from tracking your spending habits?



As the movie buff I imagine myself to be, I truly enjoy watching movies at home. As you would imagine, I do have a “few” gadgets to help facilitate this…but as the frugal shopper I am, I also have to be able to save on home entertainment.

Where We Spend:
TV – We recently purchased a new 46″ LED 1080p TV…for our bedroom. Incredibly, not only did we get a great deal on it at Best Buy, but they had an online sale a few days later, and we saved an additional $35 using their price-match guarantee. We have a 50″ plasma in the living room that we got a good deal on a few years ago.

Xbox 360/Xbox Live – We’ve had our Xbox 360 since 2007, so getting our dollars’ worth on this one. We do subscribe to the Xbox Live service (paid annually to save $$), which gives my husband access to gaming features, Netflix, and ESPN content. We have the Xbox hooked up in the living room.

AppleTV – I got an AppleTV for my birthday ($99) and have really enjoyed it. It’s about the size of a square hockey puck, and not only can I stream most services, but also, YouTube, iTunes, AirPlay with my iPhone, and more (I can also use my iPhone as a remote for the AppleTV).

Where We Save:
Cable – We get the “basic” (first 10 channels) cable subscription…only because spending $9/month on cable saves me $15/month on my internet service.

Netflix/Hulu/Amazon Prime Video – We get most of our television content from streaming services.

DVDs/Blu-Rays – I have over 400 movies (and an Excel spreadsheet of my collection…I’m a nerd, I know), but I have rarely paid “retail” for any of them. Most of my collection comes from places like used book/media stores and pawn shops, where you can get movies for about $2-3 each. The only movies I buy retail are Disney movies, but I find if you buy at Target and Walmart the first few days after release, they are usually about $5 less.

Movie Theaters – Other than trying to find a coupon for tickets, the best thing we do to save is just not go. We probably go to the theater 1-2 times per year at most, and just wait until we can rent from Redbox or get it on Netflix.

Accessories – Whatever you do, don’t get talked into spending an additional $200 on accessories like a TV wall mount and HDMI cables for your new TV while at the store! Go online for these purchases…we got a great low-profile wall mount from Amazon for $20 and6′ HDMI cables from eBay for $3 each.

Of course, there are tons of more ways to save (and even more ways to spend!) on home entertainment, but this is a good summary of how I enjoy movies at home.

How do you save on home entertainment?