Week 2.3: Well, That Was Predictable

This week, I managed to bust three of my four discretionary envelopes. The fourth one is the dog’s and that’s been depleted since the beginning of the month. I spent a lot of time with some pretty cool babies, and running around so much is not conducive to eating at home and tracking each dollar. I did some fancy accounting this week but basically I need to be benched till October.

Groceries: $19.41, which includes money spent on dog food. We ran out and the little guy has to eat. He doesn’t know it’s not October. This envelope is now overdrawn by $1.69, so we are on a Pantry Challenge till October 1st. It won’t actually be challenging. We have plenty of food in the house and our CSA comes every Wednesday.

Monique: I spent $72.43 this week on discretionary things for which I will take personal responsibility. You may recall much ado about my envelope being consumed by a rather large vet bill, but I forgot that I had previously borrowed some money from my envelope to pay for tuition (which is normally set aside in another envelope, but it was more than I anticipated this semester), planning on paying it back once I got my mid-month pay. So I did that. And then I spent it all. I took some food into the hospital for one of the new sets of parents; I had to get a birthday gift for a kid in my son’s class (this would ordinarily come from his envelope, but he didn’t have enough); I got some takeout coffee and I bought myself a fall-smelling candle. My envelope is now overdrawn by $9.19.

The Kid: $13.50 this week, mostly on school supplies. I am doing really well on my quest to keep his entire supply list under $20. He also wanted a fall-smelling candle and I was not in a position to refuse. His envelope is now overdrawn by $3.26.

The Dog: Still zero, other than taking from the grocery envelope for his food. We’re not due at the vet again for a couple more weeks.

Savings/Goals: I heard something this week that, while I’ve certainly heard it before, made sense to me for the first time: Pay yourself first. My goal has always been to pay off debt at the fastest rate possible, but I have all these other expenses that will inevitably come up in the meantime. I find myself scrimping on other things to avoid going further into debt, and I feel like I’m always having cashflow problems. This week, I decided to shift my focus to filling all of my annual and short-term goal envelopes as my first priority, while continuing to make my required payments on existing debt. Once the envelopes are full (which will take $10,100), I can pivot back to throwing whatever I can at those debt balances without worrying about property taxes or tuition or car maintenance. As of today, I have $1,580.70 of $10,100 saved.

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This week’s takeaway: Cute babies are a distraction from pretty much anything ever but we’ll forgive them.

Kinderbudget

I met with a financial adviser a while ago, and when I found out he had a son a couple years younger than mine, I asked if I could pick his brain a bit. First, I asked if he gave his kid an allowance (yes), how much (eight quarters a week), and what he was expected to do with it.

I liked what he told me, so I decided to implement it at home.

My son, having just turned six, gets six dollars a week. I budget for it as part of his $100 monthly envelope.

wpid-wp-1442364068430.jpgThe main idea here is that the kid gets three jars, labelled “spend”, “save” and “share”, respectively. I saved up some empty protein powder jars because they are huge and I’d like to give him room to fill them, should he want to. We decorated them with stickers.

He gets his allowance in change, loonies or smaller. The rule is that he has to put one dollar in each jar every week, but he gets to choose where he puts the other three dollars.

The Spend Jar is pretty self-explanatory. This is for stuff he wants to buy. There is still an element of saving required, since most things cost more than a few dollars. He’s keeping a list of items he wants and their prices, and learning about sales tax.

wpid-wp-1442364152471.jpgThe Save Jar is for long-term savings goals, like an expensive toy or a trip. Eventually, some of this will go into a bank account.

The Share Jar is my favourite. This is money he has to spend on others. It can be used for birthday gifts for friends, or Christmas gifts for family, or donated to charity. He’s got plenty of ideas already.

This week, the extra three dollars went right into Spend. He saw this silly calculator at Staples last week with a ball bearing maze in the back of it, and it’s all he’s talked about since. I was kind of hoping he’d get over it, but no luck yet.

wpid-wp-1442364586483.jpgHe’s pretty proud of his jars, and I think it’s an easy way to teach budgeting in an age appropriate way. I’d love to hear your thoughts.

What other lessons in financial literacy do you think it’s important for kids to learn? Or do you think kids just shouldn’t have to think about money at all?

Week 2.2: (Still) Summertime and the Spendin’ is Easy

This has been a crazy week, mainly because two of the people closest to me had a baby (each) within three days of each other. That was really nice of them. It saved me gas and parking meter change!

Groceries: $37.45 this week. Cheese was on sale. We also got rained out of an outdoor movie, so we made it an at-home movie, which meant buying our own family-sized concessions.

Monique:  Zero. (See: last week.) Actually, I used some of my son’s envelope to buy a specific calculator that I was told I needed for a Stats class I am taking, but it turns out I may not need this particular model and one I already had might suffice. I will know for sure tomorrow. It’s still sealed and I’ll return it if I can.

The Kid: $43.73. A trip to Staples to get the aforementioned calculator, and I decided to get a couple things from next year’s school supply list that were on sale. I don’t think the lists for each grade level change much from year to year. His first two years of school, I sent a cheque for the supplies: $30 for Primary (Kindergarten) and $35 for Grade One. Next year, I am on my own. It follows that supplies for Grade Two should cost me around $40. I’m shooting for $20, pre-tax. I’ll let you know how I fare. I also took him out for lunch after he got his hair cut.

The Dog: Zero! Thank goodness. Although he is going to need food before the month’s end, so that will have to come out of the grocery budget, or elsewhere.

Savings/Goals: This year’s rules require that I use extra cash, and not regular income, for any gift purchases. This week, I sold an old text book for $80, so I’m happy to report that we will probably have Christmas this year.

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I promise I didn’t buy this PSL.

This week’s takeaway: Don’t highlight your textbooks and your kid might get that Lego Advent Calendar he’s got his eye on.

Week 2.1: Back to School

This is the first of what I hope will be 52 weekly posts detailing where in the hell all my money is going.

I am using an envelope system and budgeting monthly. Most of my expenses are fixed, so for the most part, it’s that handful of discretionary envelopes that I’ll be tracking.

Groceries: $25.83 spent. We needed toilet paper this week and my favourite stuff was on sale. We didn’t need much else.

Monique: $25.65 spent. I bought a digital download of a record and a scarf from the Sally Ann; 3x takeout coffees.

The Kid: $26.72 spent. The Sally Ann had kids’ clothes on ten for $5, so I got a few back-to-school outfits. The rest was a birthday gift for a kid in his class and a very small Millennium Falcon. (I made a budget envelope to cover some of his wants and needs each month. He also gets a weekly allowance, which will get its own post at some point.)

The Dog: $226.00 spent. This dog has chronic ear problems, and we’ve been treating him for infection for much of the last year. This is just the latest in a string of vet bills I’ve had to pay for him. I had budgeted $100 per month for his expenses, hoping we’d seen the last of the vet for a while. I was mistaken. This one appointment emptied not only his envelope but mine too. It got me down, since it was so early in the new year and I was so committed to staying on budget. I didn’t expect to see my resolve so thoroughly tested this early on.

Savings/Goals: I have my $1,000 emergency fund in place, which should keep me from going further into debt.

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This week’s takeaway: Shopping is fun; Dogs are expensive.

The Roses Project

I have a rosebush in my front yard. I thought it was done blooming for this year, so imagine my surprise when I returned from vacation to find a measly four blooms still hanging on. It gave me an excuse to try this homemade rosewater toner that I’ve had on my mind.

I put the remaining petals in a mason jar, covered them with distilled water and a teaspoon of vodka as a preservative. I also had some dried lavender so I added a few sprigs since there are fewer rose petals than I’d like.

I’m going to steep it for two weeks before following the rest of the toner recipe.

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Total cost: zero dollars.

Cheeky

A few months ago, I broke a blush I’d been using almost every day. Most of it stayed in the compact, so I tucked it away until I had time to do something else with it. I had the inclination to turn it into a sort of creme blush using the same compact.

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I used the broken pieces of the blush, a tiny bit of beeswax, some coconut oil, a few drops of primer and two drops of essential oil (for fun) for this little recipe.

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I melted it all down on the stove over low heat. The beeswax takes longest to melt, so you’re better off starting with that.

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Once it was all melted, I gave it a stir then poured it into the same compact. The surplus went into another little container I had on hand.

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It should work as a lip and cheek stain, just in time for dry skin weather.

Make Two

wpid-wp-1441674915083.jpgNow 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.