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?

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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.

Monthly Budget Roundup- September

It’s the beginning of a new month, so time to go through the budget I posted at the beginning of the month and see how I did.  For this post, you’ll get to see the amount I budgeted in black and the final amount I spent in red or green (depending on whether it’s over or under budget).

Yucky yucky debt

  • Planned: $1215 plus at least $2800 at the end of the month
  • Spent: $1215 plus $3500 at the end of the month
  • Total: $4715 ($715 over our $4000 target- YAY!)

Necessities

  • Rent: $1300                                      $1300
  • Utilities: $280                                  $271
  • Phone: $51                                       $42
  • Groceries: $500                               $493
  • Gas: $200                                          $149
  • Daycare: $1245                               $1241
  • B. Cash: $500                                   $532

Other Items

  • Netflix: $11                                     $11
  • Restaurants: $100                         $96
  • Pet care: $20                                  $42
  • Clothing: $150                               $81
  • Sports & Entertainment: $100   $93
  • Miscellaneous: $200                    $193
  • Hair Care/Cosmetics: $100         $59
  • Her money: $100                         $72
  • Doctor: $50                                    $0
  • Maid: $200                                    $198
  • Lawn Service: $75                       $74
  • Thank you gift: $75                     $50
  • Soccer: $90                                   $90

Look at that, guys! After a rash of bad budget months, I think I might actually be under our planned spending for September!! This month has been great- I only ended up over on two categories.  The first is vet- the dog did need a prescription refill, but said prescription refill was more expensive because his dose needed adjusting.

Second is B., who had a few unexpected expenses this month (like a new laptop keyboard) that upped his spending.  I won’t give him too much grief though- he regularly stays within the $500 we budget. 🙂

And, as predicted, now that I remembered to budget money toward medical expenses, none occurred.  F. was sick, but Tricare pays for everything 100% while B. is deployed so we didn’t end up incurring any expenses.

Here’s hoping October continues the trend of good spending!

Final Spending Tally (excluding debt) 

  • Planned: $5157
  • Actual: $5087
  • Percent of total income: 50%

(For those of you following along with the math, that means that we put roughly 47% of our income toward student loans this month. UGH but yay?)

Tune in tomorrow for October’s budget.  How did your month go?

Freezer Challenge Update

Alright, time for a weekly check-in on this freezer challenge.  Infamous oil-soaked fish aside (still so gross), this week was pretty good, both for using stuff up AND freezer challenge.  Up first: freezer challenge.

Things I used up out of my freezer

  1. Country-style pork ribs

I’m super pumped that I used these up.  I had no idea what I was going to do with them.  I ended up making slow cooker carnitas (using this recipe) and mixing the following together for a very delicious burrito bowl:

  • 1/3 cup rice
  • 1/3 cup pork
  • 1/4 cup black beans
  • 1 tomato, chopped
  • Salsa
  • Guacamole (to your taste- I firmly believe that there is no such thing as too much guacamole)

I’ve been eating burrito bowls for lunch all week and they are still completely delicious. Plus, the pork was great cooked this way. And I used up something that I was not excited about eating.

2. Chili

I had one lone container of chili hanging out in my freezer, which I heated up tonight for F. and I along with a homemade quesadilla that we split.  Easy and delicious.

3. Fish

So there is less fish in my freezer, although it definitely wasn’t a win, since I ended up throwing it instead of eating it.

4. Ice Cream

MMMMM….ice cream. This wasn’t part of the freezer challenge, but I did use some of it up.

Other Frugal Food Wins

I used up a whole butternut squash– I like the idea of squash more than the execution in almost every situation.  But I was the lucky recipient of a large butternut squash (thank you Dad!) and needed to find a recipe for it.  I ended up making a butternut squash, bacon and pasta casserole and guys….IT WAS DELICIOUS.

20170927_174629
I am not a food photographer. Clearly. But how good does this look? 

I’m serious, this pasta was easy and amazing.  It was salty and sweet and tasted like a big old bite of fall.  This is a Cooking Light recipe, but I modified it slightly.

Ingredients

  • Salt, rosemary, pepper
  • 3 cups peeled, cut butternut squash
  • 6 slices raw bacon (or more- since you can’t really have too much bacon)
  • 8 oz. uncooked mini penne
  • 1/4 c. flour
  • 2 cups milk (don’t use skim- you need something with some fat in it)
  • 1 cup shredded mozzarella cheese

Directions

  1. Mix squash with salt, pepper and rosemary. Spray cookie sheet with cooking spray and arrange squash on cookie sheet.  Heat oven to 425 F and roast for 45-50 minutes. Once the squash is done…
  2. Cut bacon into pieces and cook over medium heat. Once bacon is mostly cooked, drain fat (if you want)  and add squash to the pan. Saute for one minute.  Remove from heat.
  3. Cook pasta according to package directions. Drain.
  4. Combine flour and 1/2 tsp salt in a deep pan (dutch oven or something similar). Slowly add milk and whisk to combine.  Heat to boiling- boil one minute, whisking fairly continuously. Add cheese, stir until melted, then remove from heat. Stir in pasta. Once combined, stir in bacon and squash.  Serve warm.

Seriously, you have to try this recipe. I was so hesitant about it and IT WAS PHENOMENAL. At least, I thought so.  F. wasn’t so certain- she picked out all the bacon and deigned to eat a few noodles.

Anyway, all in all, not a bad week.  One big miss, but two things used up out of the freezer and one butternut squash used up.  I’ll take it! How’re you all doing?

 

Money Monday: Saving for a Rainy Day

Note: This was supposed to be yesterday’s post (which, dear readers, I’m sure you will note, is also not Monday. What can I say? Life is beautiful, yet exhausting, so sometimes I’m just not up for blogging!)

As I write this blog post, it is currently pouring down buckets of rain.  The forecast for tomorrow is cold and rainy too, so this week’s Money Monday post seems appropriate.

One of the most important ways to win with money is to be prepared to weather a financail storm. A 2012 study by FINRA foudn that 40% of Americans couldn’t come up with $2000 in an emergency and 60% don’t have three months of basic expenses saved up.

This is one area where B. and I have significantly deviated from the Dave Ramsey plan.  In order, his steps involve saving $1000,  paying off debt and saving up 3-6 months of expenses.

I don’t know about you all, but $1000 in savings when you’re looking at a minimum of a five years paying off debt just doesn’t really feel that secure.  In the last two years, I can think of at least three major, surprise expenses that required more than $1000. Plus, five years is a really long time. There are a lot of things that could happen during that time- one of us could lose a job, we could have a major health event, or some other life event could happen.  I’m just not comfortable living for five years with no savings to fall back in, just in case.

Anyway, we’re doing this out of order, because we saved up about four months of expenses before we started paying down debt and I haven’t regretted it for a minute.  Still not convinced? Here are three good reasons why you really need to have three to six months of expenses in savings.

  1. Life happens all the time– Cars break down, kids need surgery, dogs eat something stupid and rack up huge vet bills, and things in the house break (like the time our trees decided that growing through the drain line was a GREAT IDEA!) Three to six months of expenses in savings will more than cover almost any major life event.
  2. Job security is not a real thing– Given that neither B. or I are tenured professors or union workers, we don’t have a whole lot of job security.  Sure, we do our jobs well, but it’s impossible to predict whether our positions will still make sense three or four years down the road.  Layoffs happen and it’s irresponsible to our family to not plan for that eventuality.
  3. Major health events are no joke–  I work in health insurance, so maybe I’m paranoid, but I’ve seen firsthand just how much a major medical event can cost. Medical debt is the leading cause of bankruptcy in the country.  Most out-of-pocket maximums are set around $7000 a year- that’s a lot of money before insurance kicks in.  Having expenses in savings helps to absorb both the costs associated with a major health event as well as the opportunity costs associated with missing work.

So there you have it.  Three reasons why you need three to six months of expenses in savings.  It wasn’t easy for us to get there- we were often saving only $50-$100 a month, but we’ve been building for a long time and our savings are finally in a good place. Start small and you might be surprised how easy it is to find more money to save.

The usual caveat: none of this applies if you are struggling to meet basic needs such as food, shelter, clothing, health insurance and utilities. A lot of what I write about assumes an income sufficient to meet basic needs, but I fully recognize that there is a significant part of the population that doesn’t fit that criteria. I still think that Dave Ramsey can be helpful in this situation, but the application is quite different. 

Some days are better than others- food edition!

So tonight’s post was supposed to be something completely different, but in the spirit of full transparency, I’m going to share my evening with all of you instead.

I was so excited about dinner tonight- I had found a recipe for homemade fish sticks, which F. would love and would use up some of the god-awful old fish in my freezer. Win-win.  I was already composing the blog post on using up fish in my head.

WELL. AHEM.

I asked our housekeeper to clean the stove yesterday when she was here (I know, first world problems, but bear with me). She (apparently?) pulled off all the knobs to clean under them and then put them back on upside down.

20170926_195112
These burners are all off.  But they look on.  I’m lucky I didn’t burn down the house…

Which, of course, I failed to notice until I was cooking dinner.  So my oil got hot (after sitting forever, because, oh wait, it was on LOW, not HIGH) and then I tried to turn it down but actually turned it off.  After I put the fish in. After which the fish soaked up all the oil in the pan. SO GROSS.

Enter the back-up meal. Scrambled eggs, banana and tomato slices.  You may remember that scrambled eggs was one of my easiest last minute meals. So that’s what we had tonight, because at 5:30 my toddler was sitting at the table screaming for food and I had absolutely nothing ready to go.

So…my freezer clean-out is not off to an auspicious start.  Hopefully the rest of the week goes better!