Financial Embarrassment

I bounced a freakin’ check.  Really.  It’s embarrassing.  We make too much money for crap like this. 

What?

The “bouncing” actually occurred a little over a week ago, but I was too mortified to write about it.  Thankfully it was our water bill and not a check to someone we actually knew.  That would have been so much more embarrassing. 

When I logged into our bank account a day before pay day and saw RED in the balance column.  I didn’t believe it at first.  I somehow miscalculated $176 and some change in our checkbook.  Don’t ask me how it happened, because I really don’t know.  Additionally, being a terrible forensic accountant, I was unwilling to go through more than 4 months of bank statements to try to find the error. I never did find the error, so I still don’t know where I went wrong.

What makes me upset is that we have money.  I mean, not “we’re ridiculously rich” money, but we have some stashed away in several places. I have almost $1,500 in cash at home, Henry has almost $1,000 in what he calls his “crusty cash” stash.  We have almost $9,000 in Online Savings, and at that time we had approximately $1,200 in local savings.  There were no excuses for bouncing a check.

How Did This Happen?

The answer to that answer is multi-fold.  1. We have a lot more expenses now that we pay $560+ every month for child care, not to mention the extra expenses of a baby.  2. Sometimes I really push the envelope in bill repayment.  I tell myself “If I pay X amount on the student loan, we won’t spend this money.”  It’s true, with us, out of sight, out of mind works with money.  That payoff strategy would probably work IF the CFO of the house (me) could count (I cannot). 

The Solution

To prevent this from ever happening again, I decided to create an “invisible buffer” in our checking account. I took $500 out of our local savings account and put it in the checking account.  Then, I drew a line in the check register both adding, and then “hiding” this money.  That way, if I make another screw up, we will not have to pay a $30 insufficient funds fee.  There’s probably a better way to prevent bouncing a check, but this was the best solution I could muster.

Link

This past weekend, my sister-in-law and I got together to “batch cook.”  We had been talking about it for a month, and we finally decided to do it.  I’ve read on so many blogs, namely on The Simple Dollar about cooking large quantities and freezing them in smaller containers for later consumption.   Some people call it “once a month cooking” or batch cooking. 

This seemed like the perfect idea for a busy family who is trying to eat healthy and not spend so much money eating out.  My SIL and I were not willing to tackle an entire month on our first go-round.  Instead, we settled for two weeks of prepared and frozen meals.  We made 9 dishes.  It’s just her and my brother at their house and just Henry and myself eating “real” food at our house, so 9 meals is about 2 weeks worth of meals once you count leftovers for lunch and the one or two meals Henry and I usually eat out.

The surprising thing to me about the whole process was, it was not as exhausting as I thought it would be.  Maybe it was because we were working as a team, or maybe it was because we had an awesome 90’s music station blaring on iHeart radio. 🙂  Either way, it was pretty fun.  I realize that if we keep doing this every 2 weeks, it may get less fun as we go.  However, right now, I am enjoying not cooking again for 2 weeks.  I feel so super woman-ish having food all ready to go in my freezer.  I think it’s a new form of empowerment for a modern woman to be able to take care of work, children, AND dinner.  haha!

Another benefit of this system, all of the supplies to make these 9 meals (18 total with SIL’s share) was just a little over $100.  So, two families, 2 weeks of meals, about $115.  Not too shabby.

The State of Our Finances (part 4 of 4)

I have laid out the other 3 areas of our finances:  income, debt, and assets.  Now, we move to the part I struggle with the most–The Budget.

The Budget

The Early Years:  Henry and I are terrible, terrible, terrible at sticking to a budget.  We’ve tried the envelope system.  Didn’t work for us.  It seemed like we spent MORE money not less when we used envelopes.  We would look in our coupon folder (our version of using envelopes) and see all this money and think, “yeah, let’s go eat out tonight.”  Or, we would forget our envelopes at home and have to use our debit or credit cards.  Kind of defeated the whole purpose. 

The Not-As-Early Years:  After I graduated from law school, our income doubled and budgeting kind of went out the window.  We were flush with cash and it seemed like we didn’t need to budget.  Then, we decided we wanted to buy a house.  That meant saving money.  We tightened our belts and just saved what we could after we had paid our bills and set aside some money for fun.  If we didn’t have money in our checking account to go to the movies, we just didn’t go.  There wasn’t a lot of rhyme or reason to it, but it was sort of working.  We saved enough money, put the downpayment on the house, and did some “fixin’ up.”  At that point, we realized, we owed a lot of people a LOT of money.  Neither of us like that feeling of owing poeple.

The Nasty Now & Now:  We want freedom.  Not freedom to the point of where we can quit our jobs and live on the beach (although that doesn’t sound too bad right now).  No, we just want freedom to not have to pay so many freaking bills every month.  We want to invest and earn interest instead of paying interest.  So, we have come up with a quasi-budget.  It’s not overly restrictive, yet it allows us to throw all our “leftover” money at debt every month.  This is what it looks like:

Paycheck 1 $1,300
Car Payment $355
SallieMae #2 $265
Groceries $125
Eating out $75
Gas $175
Child Care $160
Total $1,155
Paycheck 2 $1,381
MOHELA $64
auto insurance $150
electric (avg.) $150
water (avg.) $60
Child Care $160
Groceries $125
Savings $200
Savings (automatic) $345
Total $1,254
Paycheck 3 $1,300
Mortgage $940
Groceries $75
Gas $125
Child Care $160
   
Total $1,300
Paycheck 4 $1,381
Trash $30
Citi student loan $117
Phone $144
Internet $51
Child Care $160
Miscellaneous $50
Savings (automatic) $345
Groceries $125
Total $1,022
Total Income $5,362
Total Costs $4,731
extra payment fund $631

I’m too technologically illiterate to know how to import my Excel spreadsheet, but in Excel is where I keep the budget.  I have it divided according to paycheck because the makes the most sense to me.  Child care is a pretty expensive category, but that is because we have someone come to our home to watch Baby Girl.  Starting in 2 weeks, Henry is taking a position where he will only work 3 days per week.  This should chop our child care bill down to $120 per week and free up $160 more per month to throw at debt.  There are areas where we could trim, but we are pretty happy with our categories as they are right now.  They are loose enough that we don’t have to micromanage every penny, thus ensuring that we actually will stick to our “budget.”  Also, any extra money we get, Henry’s overtime, tax refunds, bonuses, etc. go towards debt. 

How do you budget?  Do you manage down to the penny or are you like us, prefer it a little more loosey-goosey?