Now that I have a year of making do under my old-ass belt, I think I’ve got my stuff problem more or less under control. One of the serendipitous side effects of making do was supposed to be all the extra money I’d have, which I would have used to pay down my consumer debt. That didn’t really happen. I have my suspicions about where all my money went in the last year. Since I wasn’t buying stuff, I got very lax about watching my money in other areas. I also had some surprise costs. The primary focus of this year is making better use of my money.
Here’s a little background on the how and why behind my Year Two Rules.
1. Track all spending.
This is something I started out doing last year, but quickly fell off. I want to get back to doing a weekly post of how much I spend on stuff, so keeping daily track is going to help with that.
2. Set and stick to a monthly envelope-style budget for all necessary and discretionary expenses.
I use an app and website called Goodbudget. I’ve used it for years (clearly sporadically). It’s free for a base-level membership and that’s all I really need. I have ten envelopes for monthly expenses, and ten more for annual expenses or savings goals. It also keeps track of my chequing balance. I fill my envelopes when I get paid, and once they’re empty, that’s it.
3. Food and other necessary consumables are not limited but must stay under budget.
It seems that since I was allowed to buy food last year, I just bought more of it. I stopped paying attention to how much of my money was going to consumables because I didn’t think they’d be a problem. This is the year we find out for sure.
Food budget this year is $206 per month. That’s $125 for the CSA and $81 for other grocery items. This does not include food prepared outside the home.
4. A predetermined personal monthly allowance can be used to purchase discretionary items or services.
Here’s the real departure from the first year of making do: I can buy stuff. Not a lot of stuff, but I’m not restricting any broad categories of purchases (except one, keep reading).
I am giving myself an allowance of $200 per month for discretionary spending. Just like any other budget envelope, once it’s spent, it’s gone. If I happen to have money left in that envelope at the end of any given month, I can choose to roll it over or put it towards a savings goal or annual envelope that’s looking a little thin. I can also borrow from this envelope if another necessary expense goes over budget, but I can’t borrow from other envelopes to top this up.
5. Discretionary items and services include clothing, shoes, tickets to stuff, all book/media formats, crafty supplies, haircuts, stuff for the house, and all food that is not home-prepared.
I will be the first to admit that my definition of “consumables” got pretty loosey-goosey along the way. I probably spent too much on movies and concerts and ebooks and I definitely spent too much on snacks. I also managed to put on quite the sixth birthday party by purchasing only art supplies which, while technically not cheating, was still rather dear. This is the part that I think will be the hardest for me, maybe even harder than not buying stuff.
6. Purchase no toiletries of any kind, unless I happen to run completely out of something I need. (I still have enough of these to go at least another year.)
I wish I were exaggerating, but I really am set in this category. I shouldn’t need a single item for at least six months, and I probably won’t need to buy shampoo until 2017. I will probably need toothpaste at some point this year. Let’s recall that this includes makeup purchases, which is a necessary rule because my first inclination when I’m having a rotten day is still to go buy a lipstick.
7. Clothing purchases must pass the Dollar-per-Wear Test. Thrift shopping is encouraged.
For those unfamiliar with this standard for clothes-buying, a brief explanation: Before you buy an item, imagine that it depreciates by one dollar every time you wear it. The goal is to let the item depreciate fully. If something costs $7 on Old Navy clearance, and you’ll only wear it once, it fails the test. Conversely, if something costs $50 and you know you’ll wear it at least 50 times, then it passes because it will have paid for itself. If that seems like a high bar to clear, you’re right. It is. That’s why it’s a lot easier to find things that pass the test when you buy second-hand. I love thrift shopping, so this isn’t a tough one for me. I do, however, have a certain pair of black ponte skinny pants in my closet that are probably floating around $0.25 per wear now, and I paid $49 retail for them. So it can be done.
8. Gifts may only be purchased with extra cash earned, and not from regular income.
I’m challenging myself a bit here. I am planning on taking any earnings I get from consigned clothing, plus I’m going to take another crack at selling some stuff myself. Selling my stuff is the only way I can think of to fulfill this requirement. Unless someone wants to pay me to teach them to pack or something. That would work.
9. Loyalty rewards and gift cards are not money, and thus may be used without restriction.
I told my husband today that Optimum Points are the only reason we have a Christmas some years. I am only half joking. I earn points at the drugstore and at the grocery store. I am thinking of canceling my gas card and doubling up on PC points at the pump instead. They are far more valuable to me. I still have a couple of gift cards in my wallet that I can use when needed. I shouldn’t be keeping them around. I got burned by a $100 credit note for Jacob which is now out of business. I got all those Target cards used though. Phew!
10. Keep credit card balances at zero and add nothing to existing debt.
If I keep to rules 1 through 9, this should happen naturally. The reality, as I’ve learned over the past year, is that I can’t control everything. I am starting Year Two in essentially the same financial position as I started Year One. It’s disheartening, until I remember that something’s changed. The most important variable in my little experiment is different this year: me.