Budget Update - Month 1 Lessons Learned

Hello Y'all,

So April ended and we added up the  receipts from the groceries and incidentals (remember, we had budgeted $300 for groceries and $400 for incidentals) and we were pretty much spot on with our budgeting. We spent $298 on food and actually closer to $450 for incidentals, but there were a few unexpected things that came up in there, so a $50 surplus wasn't actually too bad. It was the first month doing this and our goal was to practice and just begin setting up good habits around our spending.

Things we observed;

• it was easier to remember to keep the grocery receipts than the incidentals
• you have to remember to actually keep cash on you when you go out, so that you don't end up using your debit card
• don't take too much cash with you, so you are able to stick to your budget
• you definitely become more conscious of your spending and start to question every purchase
• you need to write down all the money you take from each box and change you put back in with the receipts

We want to do this the same way for two more months to be able to average it out and see what our spending trends look like. We also thought that for this month, it would be a good idea to think about and write down the things we know will be coming from the incidentals, like a hair cut or getting the oil changed in the car...that kind of stuff. Then you can deduct those things and see what you are really left with for "other" stuff. It can help set you up to balance your spending for the month.

So, now we're off to the races for May and we'll update you again in the beginning of June!

Thanks for watching!

-E & D

Get a Financial Life: Personal Finance In Your Twenties and Thirties

Kitchen Revamp Challenge: Part II

Everything and the Kitchen Sink: Remodel Your Kitchen without Losing Your Mind

Hello All!

So Dave and I popped out to a tile showroom today on our lunch break to have a look around. Our idea for the backsplash is to use subway tile (roughly 35 to 40 cents per tile) - great, clean look for a very low cost - and to accent it with a more expensive tile. This is a great way to add a lot of beauty to a space without spending a huge amount of money. We had spotted some tile at Lowes that we really liked for the accent. It was $22.22 per square foot (these small fancy tiles are sold in square foot sheets). They also have a 20% off sale right now (until the end of April), but there was no signage to that effect; we only found out because we spoke to the guy who works there. Since we'd only need two sheets to do our basic accent (one row of the accent tiles across the backsplash), this would have cost us around $40. Great price!

We decided to wait and check out another tile place first. This store is one that specializes in tile and only tile. The showroom was stunning and they had some amazing tiles. The prices here are generally high because they deal in high quality tile. Dave and I, however, were going with a purpose. When these stores discount their tile, it can be a great place to find amazing deals. After a stroll around to look at the regularly priced stuff :) we moved on to the clearance section and found a beautiful green glass tile that is just perfect for our backsplash. It was regularly just over $17/sq ft, and was marked down to $8.60/sq ft. We did a quick calculation of our needs and decided to purchase 5 sheets. This brought our grand total to $48 and some change - more than what we would have paid at Lowes - but we got a tile we really love, and we are now able to do a 3-inch row of tile across the wall, instead of 1-inch, and we are going to try a vertical design behind the stove, which looks stunning in Sketch Up! (I really can't wait to take some pictures and post them here...We'll be sure to take befores and afters.)

So here's the running budget so far;

Supplies                                  Budget                          Actual
Paint                                        $60                                $16.98
36 Hinges                                $150
Countertop                              $220 (Ikea)                  
Backsplash                              $347                               $43
Countertop lighting                   $60 
Miscellaneous                          $50

Subtotal                                  $887                               $59.98
Taxes                                     $133.05                           $7.80

Total                                      $1,020.05                        $67.78

Not bad so far! Looking forward to continuing this challenge. I'm going away for a few days this week and Dave will have his exams early next week, so we'll pick this up again then...and actually get started on painting those cupboards!!

'Til then, party people:)

-Erin and Dave


The Black & Decker Complete Guide to Kitchens: *Do-it-yourself and Save *Third Edition *Design & Planning *Quick Updates *Custom Cabinetry *Remodeling Projects on a Budget

Kitchen Revamp Challenge: Part I

Been a while! This has been a crazy month for Dave and I. He's trying to get everything wrapped up for school and I'm working on a few new projects for work...all the while managing the kids and trying to live within our newly formed budget. (That's going pretty well...but more on that at the end of the month...)

Recently, we decided that the kitchen in this house needs a lot of work. Okay...it wasn't so much a decision as an acknowledgment. I've been dying to replace my kitchen cupboards and countertop for many years now. Dave suggested that we could just paint the cupboards and replace the countertop and maybe do a backsplash and that would give it a whole new look and feel. I hemmed and hawed for a few minutes because I detest the cupboards, but then I saw his point and also accepted the fact that I want it done and don't have the finances to afford a full kitchen reno. (I have long ago accepted the fact that I won't be applying for any more credit, so anything I do or buy has to be with cash.)

So we started pricing stuff out and came up with a budget that was roughly $1,000 (see the table below). We think this is a reasonable estimate for what we want to do. But then the spark of genius; let's see just how far under budget we can do this for! That's the challenge: we will paint the cupboards, replace the hinges (the knobs are newer and very nice, so we will reuse those), replace the countertop and get some new countertop lighting, and do a backsplash for as inexpensively as possible against our original estimated budget of $1,000. The table below shows our budget and I will keep reposting it as we purchase the different parts required with the actual costs filled in.

We achieved our first big savings this past week when we took an impromptu trip to Lowes, just to look around, and found gallons of paint on sale. We purchased 2 gallons of paint, regularly priced at just over $33 each for $8.49 each. (As a side note, we also found a small can of white touch up paint that we needed for the ceiling on sale for $3.49.) This brought our budget for paint down from $60 to just under $20 (see table below)!

Another idea we had was to have some paint that I have in my garage re-tinted. Some places will do this for you for free or a nominal charge. That is another great way to save money and also spare the environmental costs of disposing of unused paint. We will still do that for another project, if at all possible.

Supplies                                  Budget                          Actual
Paint                                        $60                                $16.98
36 Hinges                                $150
Countertop                              $220 (Ikea)                  
Backsplash                              $347
Countertop lighting                   $60 
Miscellaneous                          $50

Subtotal                                  $887                               $16.98
Taxes                                     $133.05                           $2.21

Total                                      $1,020.05                        $19.19

We'll keep you posted as to how this is going as it develops! If you have any time/space/money saving ideas for a kitchen project, let us know!!

'Til next time!


-Erin and Dave

Bring it on, Debt-Load!! You're goin' DOWN!

So, task #1 is to get a handle on the debt we have. It's not that bad, really. I've seen scarier numbers than $30K in debt. It's actually a bit higher than that when you take into consideration some personal loans we've both had (thanks to amazing family who are nothing but supportive:)). We want to take care of those debts as well, but as any of our family would tell us, taking care of the ones that are charging interest is the priority right now!

So here's the plan, I have a house that I have to remortgage anyway to take my ex off the title (he graciously gave me two years to get my income established as a self-employed individual before I had to take the mortgage on myself). So going through that now gives Dave and I the perfect opportunity to draw on some of the house's equity (though there isn't much) to take care of the most costly debt; the credit.

Credit is a wonderful thing when you know how to use it properly, but unfortunately for most people, even if we know how - we don't. The road to hell is paved with good intentions, and never in my life have I found that more true than in how i intend to use credit and where I actually end up!

Credit is great when you have the discipline (and that's all it is, people - discipline) to only use it when you actually have the cash on hand to pay it immediately. Doing that can help you establish an outstanding credit rating, which makes getting a mortgage or other loan super-easy when you need it. Also, if you have a credit card that earns you some kind of reward points, that can be a great way to build those up and reap those benefits. Those are the good intentions:)

The reality is that we end up using our credit for purchases we don't have the cash for but believe we can pay off easily or to help sustain us through periods when money is tight. That is how we end up with maxed out credit cards we can only make the minimum payments on and paying hundreds of dollars a month just servicing our debt and making the credit card companies rich on our interest. Credit Hell.

So with the remortgaging we are going through right now (as soon as I manage to get my taxes done :P ), we can pay off both credit cards and more than half the line of credit. Dave also has a decent tax return coming and we will use most of that to pay off more of the line of credit and some personal debts. With these high interest-charging debts taken care of, we can use the money we were putting towards servicing those debts every month (roughly $1000) towards paying off the rest of the line of credit (now much more manageable) and those personal debts (...not to mention my taxes from '08...YIKES!! The joys of being self-employed :) ).

In this way, by the end of the summer we will have about $30K of our debts completely paid off (well, about $20K will be refinanced into the mortgage, but that is a preferable option to simply maintaining high interest debt) and be well on our way to financial recovery! Sounds very ambitious, I know, but doing this work now will have so many long term benefits, that the few short-term sacrifices will be well worth it. And it's the first step in working towards the simple, sustainable, abundant, worry-free and joyful life we want.

In the next posting, I want to talk about how we are decreasing our household expenses and managing our cashflow in an intelligent way.

'Til then, folks!!

e

An Idea so Simple It's Brilliant!

So Dave said to me, "we should keep a journal of all these ideas and the process." And I said, "Let's blog it!"

So here we are...blogging:)

First we should introduce ourselves; I'm Erin and he's Dave (you'll hear from him later). Both divorced, both in our early 30's. I have a child from my first marriage and we have one together...both beautiful boys:) And we're madly in love. That's not the point of this blog, but it's an important key to the success of the adventure we've embarked upon. Without that, I'm not sure we could actually do it. With it, it all seems completely doable!

The Plan 
Dave and I are going to pay off our debts within the next year (roughly $30,000 combined), make some upgrades to our current house (a suburban townhouse), learn to scale back our lifestyle (living on a budget that allows for savings, but does NOT deprive us of life), and plan for the purchase of land on which we want to build (ourselves) a home that is "off the grid" (not dependent on regulated sources of energy) and as self-sustaining as possible.

The Invitation
We want to blog our journey through this process to record it for ourselves and our children, but we're also hoping that there are others out there (you!) that might be able to learn from us/with us, offer us advice and be our teachers along the way, and just plain enjoy the journey as we share it with you:) We plan to share all the tips and tricks we pick up along the way and post links to all kinds of cool online resources.

Welcome:) Let the journey begin!!