The KISS Budget: Budgeting made simple

This week, I’m going to be talking in greater detail about my approach to budgeting.  It’s loosely based off the Dave Ramsey method, but a little bit simpler (hence the KISS budget).

Have you ever wanted to have a budget, but didn’t know where to start? Have you ever wanted to know where your money is going? Have you ever gotten to the end of the month and wondered where the heck all your money went? Have you ever felt incredibly overwhelmed by big, long books about budgeting? This week of posts is for you!

I know how you feel because this was me, until about six months ago, when B. deployed. Before that, budgeting was his “chore” and I just let him do his thing. But I took over budgeting once he deployed and have been responsible for keeping our spending on track.  The budget method I’m going to share with you this week is one that I have managed to keep going while a) working full-time and b) parenting a toddler full-time, so you know that it takes very little time or effort on my part.

Today and tomorrow are all about the pre-work that goes into “developing” a budget.  Wednesday and Thursday are all about the day-to-day budgeting experience.  Sound like fun? Let’s go!

Conducting a Spending Audit

Still here? Excellent.  I know this sounds big and scary and a lot like getting audited by the IRS, but I promise it’s much better than that.  Conduct a spending audit is really just a fancy way of saying “figure out how much money you’re currently spending.”  To do this, you’ll need bank statements (either online or paper) for the last 3-12 months and probably a calculator, pen and paper. Or some slightly better than basic Excel skills.  Your choice 🙂

The goal of the spending audit is to take everything you’ve spent over the last three to twelve months and figure out how much you’re spending on different budget categories. This doesn’t have to be complicated!! If this is your first time conducting a spending audit, I recommend the following categories:

  • Rent/Mortgage:  Your housing costs, not including utilities
  • Utilities: Water, sewer, garbage, electricity, recycling, gas, internet and cable (including subscription services like Netflix or Hulu)
  • Childcare costs
  • Groceries: Excludes eating out- only food you buy in the grocery store.  You can choose to include cleaning products and personal care products in this category or not.
  • Transportation: Gas and car maintenance- do not include any car payments here
  • Cleaning/household products: toilet paper, dog food, toilet cleaner, paper towels, sponges, etc.
  • Insurance: Home, auto, life, etc.
  • Personal care: clothing, haircuts, waxing, make-up, pedicures, etc.
  • Restaurants: eating out, including convenience food
  • Non-restaurant entertainment: movies, shows, anywhere you take kids that costs money
  • Doctor/Vet: All medical care for you and your family, including pets.  This includes any prescription medications
  • Miscellaneous: Things you aren’t sure of that don’t easily fit in any other category
  • Debt: Credit cards, car payments, student loans, etc.  Includes all money owed to others except your mortgage.

That’s it.  I wouldn’t try and refine these categories any more at this point- the point of the spending audit is to get a first-pass look at where you spend your money.  If you find your miscellaneous category is getting big, don’t worry. We’re going to sort that out together tomorrow, because that says something about where most of your money is going.

Step One: Assign expenditures to spending categories

The first step of the spending audit is to assign each expenditure to a spending category. There is not right or wrong way to do this.  I personally have an affinity for markers and paper, so I started out by printing out all my monthly bank statements (sorry trees!) and physically wrote in the category of each expenditure.  You can do whatever works for you.  This doesn’t have to be perfect. You can see my expenditure assignment exercise below:

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See? Not pretty! It doesn’t have to look nice to be effective.

Step Two: Add up your categories by month

Most people get paid on a cycle that makes monthly budgeting make sense. This may not be you- adjust as needed.  But we budget on a monthly basis, so that’s what I’m going to detail here.  Go through for each month (I recommend going back at least three months, but a full twelve will give you a good picture of seasonality) and add up how much you spent on each of the above categories.  Again, this doesn’t have to be fancy, as you can see from my scribbles below.

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Sorry for the truly terrible lighting!

That’s it! We’re going to do something with all these numbers tomorrow, but for now, you’ve completed the first phase of the KISS budget.  You now have a fairly accurate picture of how much you spend on what for each month.  Congratulations and stay tuned for tomorrow’s installment!

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Frugal Friday

It’s Frugal Friday!  Time for my weekly round-up of frugal wins and frugal fails. How did you do this week?

Frugal Wins

  • I brought my lunch and breakfast to work every day this week (and ate it!) Staying out of the very easy cafeteria at work helps keep our food spend low.
  • I bought a box of tea that I really like and took it to work.  This has been keeping me out of Starbucks, which is definitely a win.  I first got introduced to this tea when I lived in Minnesota (thank you, Granny) and I was thrilled when I found it on Amazon! It seriously tastes like Christmas in a cup. Sweet, spicy, so good.
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The best tea ever.  Photo credit: Good Earth

I think that might be it for the week. Ugh. Not a very inspiring week of wins! But hey, they can’t all be winners, right? This one definitely isn’t because up next- Frugal Fails!

Frugal Fails

  • The biggest fail this week was definitely locking my keys in the car on Monday.  I had to pay $53 bucks to get my keys back out.  This is a fail particularly because I’ve been procrastinating getting spare keys made for the car. If I’d done that, I’d have had a spare key in my desk and $53 bucks still in my pocket.
  • Thursday night = McDonalds drive-thru. I got off work super late and it was well after dinner time by the time we got home. McDonalds was totally worth NOT having a melting down toddler.
  • Oh yeah- giant vet bill. Not frugal.  I am a terrible pet owner because apparently brushing teeth is something dogs need on a regular basis or their teeth become really gross and then have to be cleaned professionally.  I did not know this. I don’t ever remember brushing teeth for our dogs growing up, but I really don’t remember well. I know now.  Brush your dog’s teeth. Seriously.  A toothbrush costs $4. Teeth cleaning cost well over $400.

Ugh. Not a great week.  I’m happy because the vet bill ended up being less than I had budgeted, but still a LOT of money. Anyway. Onward.  Next week is a new week. Clearly I need to be a little more intentional in making frugal decisions.

 

What I love Wednesday: Potato Sausage Soup

As promised, my potato sausage soup recipe.  I LOVE this potato soup recipe (even more so because this is the ONLY recipe I can think of that I actually made up myself. I am not a creative cook).

I also love it because it can be modified to use up whatever veggies you have laying around as well as a bunch of different types of meat. This is a great, hearty soup and I love it with some nice, crusty bread or a salad on a cold fall day.

Potato Sausage Soup

Ingredients

  • 1 carton (32 oz) of chicken stock (or vegetable stock)
  • Potatoes, cut into chunks (I usually use 3-4 large potatoes or 8-10 smaller potatoes. You want enough to pretty much fill the chicken broth in your pan)
  • 1/2 bunch of green onions, chopped
  • 1-2 cups of whatever veggies you have on hand (Peas, carrots and corn are some of my favorites)
  • 1 lb of meat (I’ve used Italian sausage, pork sausage, ham, ground pork, bacon and turkey in different versions of this soup).
  • Optional: Milk or shredded cheddar cheese

Directions

  • Combine broth and potatoes in large saucepan on medium high heat. Cover and cook until potatoes are able to be easily mashed with a fork. Using an immersion blender, blend potatoes in chicken broth until all chunks are smooth. At this point, your soup should have a fairly thick consistency.  If your soup is too thin, add some shredded cheddar (about 1/4 cup – this will make it taste amazing and thicken the soup).  If your soup is too thick (closer to mashed potatoes than soup), add a little milk or water (about 1/4 cup).
  • Meanwhile, if needed, cook whatever meat you’re using until done. For sausage, ground pork or bacon, brown in a skillet.  For ham or previously cooked turkey, no pre-cooking is needed.
  • Finally, combine all meat and veggies in potato/broth mixture.  Cover and cook on low medium heat for about 10-15 minutes.  Season with salt and pepper to taste.

And that’s it! Fair warning if you have leftovers – this soup will get REALLY thick when it’s cold, but will become more liquid as it re-heats.  Happy cooking!

Freezer Challenge Update

As many of you know, I’m currently working on emptying out my freezer (so I can replace with new food!)  My first week was a little rough, but the  last week and a half has been going much better. In fact, I think that after one more week, I’ll be done cleaning out the freezer!

Food I used up successfully

  • A pound of Italian sausage-  I made this into potato sausage soup, which was a double win because it used up some potatoes about to go bad as well as some Italian sausage that had been in my freezer forever.  Plus it was delicious.  I use my own made up recipe, which I will post tomorrow.  It’s dairy free, which is the best part of it since my body no longer tolerates high levels of dairy.
  • Pork…chops?- I received a random package of some cut of pork (from my dad) and had leftover chicken, peas and carrots laying around.  So I made a chicken/pork soup that I’ve been making into a pretty basic chicken/pork ramen bowl for lunch this week.  Super yummy and perfect for fall.
  • Baked pork chops- F. and I had some baked pork chops last week for dinner.  I liked the recipe, but F. was not a fan.  She’s been going through a “meat is gross” phase though, so I’ll probably try them again.
  • Chicken nuggets and tater tots- These aren’t gone yet, but we used some more of them up.
  • Frozen peas- F. really wanted some new veggies last week so I made her some peas out of the freezer.  Win-win! Also, apparently, my toddler thinks frozen peas are just as good as cooked peas…
  • Spaghetti- I used up our last pound of ground beef to make some spaghetti sauce, which we’ve been enjoying with spaghetti squash.  F. really loved the spaghetti squash- she thought it was cheese and was really disappointed when it wasn’t.
  • Two bags of bagels- I bought bagels for a work potluck about a month ago and then F. ended up being sick on the day of the potluck, leaving me with about two dozen bagels. I froze three of the four bags and have been slowly using them up. I’m down to one bag  left!

 

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Not my ramen, but similar.

Freezer food fails

  • I had frozen some BBQ chicken a few months ago, but I used regular Ziploc bags. Needless to say, the chicken was freezer burnt to the point of being wholly inedible.  I ended up having to throw it away.
  • I had a bag of random chicken parts and old veggie ends that I had frozen to make stock, which I put in the crockpot overnight on Friday.  However, something must have actually gone bad before getting frozen, because the broth smelled and tasted AWFUL! I ended up throwing the whole thing away.

Overall, I’m going to call this a big win. I’ve used up a lot of food, considering it’s just F. and I eating right now and I’m at a point now where I’m going to have to start buying meat again. F. will be happy- I think she’s tired of pork! How are all of you doing?

Money Monday: The stupid tax

On Mondays, I try to post about topics related to budgeting and money. Today’s installment talks about a topic that Dave Ramsey loves to harp on: the stupid tax.  He often talks about this in the context of the lottery (i.e. your odds of winning anything are so low that it’s stupid to think you’ll ever see a return on your investment. Therefore, buying lottery tickets is not a smart financial plan).

I think that stupid is a little harsh, but there are definitely times when we have paid  financially for less than ideal decisions.  Here are the most common reasons B. and I end up paying the “stupid tax” and how we try to guard against these in our budget.

Lack of pre-planning

This is, without a doubt, the largest reason we spend money we don’t need to. Going on a trip? Pack some snacks and extra water.  Running errands with a two year old? Make sure there is food in the car (and a change of clothing!) Birthdays/Holidays?  Keep an eye out for gifts year round, when prices are cheaper and used items are more plentiful. These days, we don’t go anywhere without an arsenal of snacks and food in the car.  Having a toddler has actually made this easier, because we tend to stop at rest ares more on road trips (since some have playgrounds)! Also, I keep a box of individually-sized goldfish packs in the car, for emergency snacks on-the-go (this has the added benefit of cutting down a little on grocery store whining).

This also applies to meal-planning.  When I put less effor tinto preping an dplanning meals, we almost always end up eating out at least once.  This is the “stupid tax” at work- avoiding work I didn’t want to do (meal-planning) led to more spending down the road.  Finance managment requries some a bit of a time invesetment, but putting in that time can save real dollars down the eroad.

Procrastination

I am a horrible procrastinator.  I was born to be a journalist (even though I’m not), because I can only work effectively under hard, close deadlines. Huge project due in two days? I am ALL OVER IT.  Huge project due in two months?  I have 58 days to start that!

However, procrastination can often end up costing you a lot more money than if you’d just done something originally.  Case in point- we’ve know for a while that our dog’s teeth could use a cleaning, but we’ve been putting it off.  Now, they need a cleaning and it’s at a much higher cost than if we’d just gotten them cleaned earlier and invested in a toothbrush and muzzle (or bite proof gloves).

Another example, from as recently as this morning. When we got our minivan, approximately two years ago, it came with one key.  Since we bought it,  I have been meaning to make key copies, but I keep putting it off. Well, this morning, I locked my keys in my car. If I had made copies and put one in my desk, as intended, I could have avoided a $50 charge to have a locksmith unlock my car.

Stress

Finally, for us, stressful situations often lead to paying the stupid task. These aren’t necessarily situations we didn’t plan for, but situations where we feel stressed and don’t make the optimal choice.

For example, when F. was sick a few weeks back, we had to pick up a prescription and I was NOT looking forward to taking a sick toddler to the pharmacy. We had already sat in urgent care for 2.5 hours, F. had been puking in the office, and I was definitely feeling stressed. I didn’t check which pharmacy Tricare uses and we ended up going to one that doesn’t accept Tricare.  Since I wasn’t about to drag my toddler to yet another pharmacy for amoxicillin, I ended up paying full price for it.

For me, this is the budget area that is hardest for me.  When I get stressed, I’m willing to spend almost any amount of money to make the stress go away.  Unfortunately, that rarely works, so then I’ve spent a lot of money and I”m still incredibly stressed.

Fortunately, as we continue to encounter new spending situations, we’re able to modify our behavior (and budget!) going forward, but even after so many years on Dave Ramsey, we still end up paying the “stupid tax.”  How about all of you?  When have you paid a “stupid” tax?

Frugal Friday

It’s frugal Friday!! Time for my weekly (sort of) catalog of frugal wins and fails for the week. Here we go!

Frugal Wins

  1. I made a potato sausage soup for lunch this week that used up both Italian sausage in my freezer as well as some potatoes that were about to go bad.  This is doubly frugal, because not only did I use up food that needed to be eaten, but I also took my lunch every day this week to work (except today, as some friends and I had a lunch date!)
  2. Aside from a planned-for apple orchard trip, F. and I didn’t do anything that cost money last weekend.  I’m trying to remember exactly what we did.  On Sunday, I think we walked to the park in the morning and then walked up to play at the mall in the afternoon.  Oh! I remember- we went to the library on Saturday afternoon to exchange our library books.  All free and all fun.  We also made these awesome bird feeders from pine cones we found at the park and peanut butter and bird seed we already had.  Unfortunately, they attracted more bees than birds, but F had a blast making them.20171001_171449
  3. I borrowed my dad’s apple peeler and dehydrator and dehydrated some apples that were about to go bad.  I think we’re going to have do another batch this weekend. My dad and I often share kitchen gadgets back on forth, which cuts down on both of us needing to own them. For example, right now I have his dehydrator and he has my pressure canner.  Sharing is a frugal win-win for everyone.
  4. I think we actually ate at home every night this week as well! I can’t remember exactly what we had every night, but I’m 99% sure we didn’t go out.
  5. I planned a dish for a girls night I attended that mostly used ingredients I already had- I only had to buy two cans of black beans and a bag of tortilla chips, which cost approximately $3.50.  I also used up a surplus of vegetables.

Frugal Fails

  1. I chose to sleep in this morning (after girls night, imagine that…) so didn’t have time to pack anything for breakfast.  So I ended up grabbing breakfast at work.  Eating at work is cheaper than a lot of other breakfast options (and healthier) but still more expensive than bringing food from home.
  2. Starbucks- ad infinitum (I ordered some really really good tea that I love in hopes of replacing my desire for afternoon coffee with afternoon tea.)  Luckily, I guess, it’s been raining all week, so neither my co-worker or I have been very interested in walking over to Starbucks.

Well, I think that’s a pretty good week! 🙂 How did your week go?

 

October Budget

Here’s our budget for October- a few extra things, but this looks pretty good!

Yucky Yucky Debt

  • $139,302 – I’m going to just celebrate the fact that we’re under $140k. Celebrate the wins, celebrate the wins…
  • Planned payments: $1215
  • Planned over-payment: at least $2800

This should be easily attainable. It’s a four-Friday month and we have very few extra expenses planned this month. I’m hoping to have more than $2800 left at the end of the month.

Necessities

  • Rent: $1300
  • Utilities: $280
  • Phone: $51
  • Groceries: $500- I know it’s only a four Friday month, but a Sam’s Club trip is in order, so I’m not sure we’ll make it with only $400.
  • Gas: $300- I may or may not be going on a trip later this month, so I’m making sure to budget a little extra for gas in case that pans out.  Plus, gas prices have gone up a bit so gas has been costing a bit more. Or maybe I’m driving more. Not sure.
  • Daycare: $996
  • B. Cash: $500- We’ll see if this covers it- as his return date approaches(!!!), he may need slightly more to start shipping some of his stuff home. We’ll see.

Other Items

  • Netflix: $11- So affordable.  So wonderful.
  • Restaurants: $100
  • Pet care: $500- The dog is badly in need of having his teeth cleaned (turns out that being bitten every time is a good way to avoid brushing teeth. Don’t do this- it costs so much more later, I didn’t even realize. Plus, he’s more at risk of infection now until they get cleaned up).  The vet doesn’t know exactly how much it’ll cost (see above: biting- so far, she hasn’t been able to accurately assess what needs done) so I’m hoping that $500 is the high side of things.
  •  Clothing: $75- We’re mostly set for winter (I think) so we shouldn’t need much this month for clothing. I think I need some new tights for cold weather (as mine conveniently waited until winter was over last year to develop holes), but otherwise, spending here should be minimal.
  • Sports and entertainment: $75- Gymnastics plus miscellaneous.
  • Miscellaneous: $200
  • Hair care/Cosmetics: $50
  • Fun money: $100
  • Doctor: $50
  • Maid: $200
  • Lawn service: $150- Why oh why is the grass still growing?? A very rainy and hot September has led to a lot of grass growth.  JUST QUIT. Summer is over. Stop growing.
  • F. Birthday present: $50- F’s birthday is coming up and I want to get her something for her birthday. I’m not sure whether I’m going to get her an actual present or instead use that money for a birthday day of adventures with her. Just mommy and F. 🙂  I asked her if she wanted a party or to just spend the day with mommy and she picked spending the day with me 🙂 So that’s what we’re doing for her birthday.
  • Tree/Bush Trimming: $250- We are the (un)proud renters of a house that has a TON of bushes, all of which need to be trimmed back each year (This, right here is what I hate bushes. Too much work. I hate yard work).  I’m not totally confident in my ability to handle the electric trimmer, plus time is at more of a premium right now, so we’re hiring someone to do this.
  • WOW subscription: $78 (yearly subscription)
  • Charity: $50- The Food Bank of Iowa sent me a thing in the mail asking for donations, so I’m donating. Direct mail works, people.

You may notice that I don’t have anything budgeted here for Halloween.  We generally forgo any Halloween “events,” largely because B., F. and I all hate crowds of people.  And Halloween events are always crowded.  We usually just go trick or treat around our neighborhood on Halloween- it’s a great way to meet your neighbors! Our candy purchases get folded into the grocery budget (eggs or candy? decisions, decisions…) and a costume for F. usually gets folded into the clothing budget.  Last year, she went as a Care Bear (wearing the delightful Goodwill-purchased Care Bear costume below) and this year decided she wanted to be a Care Bear again.  Done and done.

Fiona Care Bear
The cutest little care bear ever.

Total Planned Expenses

  • $5941
  • Percent of total income: 59% – Higher than I would like, but c’est la vie. Pets are expensive. So are bushes.