Are You Ready for Rising Gas Prices?

The headline in my local paper on Wednesday was "Pumped UP". There was a graph showing the price of gas as of Tuesday was $3.29 vs. last month's price of $3.11 vs. last year's price of $2.69. Sixty cents more than last year. Yikes!

A petroleum analyst, who was quoted in the article, was projecting that we could be paying anywhere from $3.65 - $4.05 by Memorial Day. It sounds like we might be headed back to the summer of 2008. Double Yikes! Of course it is only a projection and hopefully he is WRONG!

I don't want to be a Debbie Downer, but I am keeping my eye on gas prices. Our business was affected by higher gas prices in 2008. Some customers confided that they couldn't continue to buy our product because gas prices were taking a bigger chunk out of their budgets. Many businesses and families were affected by the summer of 2008's gas hikes.

While my husband and I will continue to charge forward with our business, I'm still going to keep a sharp eye on gas prices.

Personally, I'll be more watchful over wasteful driving and idling. With the warmer months coming, we'll frequent the businesses within walking distance instead of driving distance. And I'll combine all of my errands into one trip. While I don't consider myself a wasteful person; these are things that I have taken for granted when gas is $2.69/gallon.

How will you deal with rising gas prices? Were you severely impacted the last time gas hit $4/gallon? Let us know in the comments.

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Do You Track Your Cash Flow?

Do you know how much cash comes in each month? Do you know how much cash leaves every month? Do you know much you spend on groceries, gas for your car or even your mortgage?

I have used Quicken software since the mid-90's when I bought my first computer. Quicken lets me assign every transaction that I enter to a category. Except for the cash allowance that we allot ourselves each month, every dollar that comes in or is spent is assigned to a category. We have around 20 categories.

I work a budget around what comes in, what we spend and what I would like to spend, hopefully leaving some leftover to devote to more debt reduction or savings. It doesn't always work out in my favor.

Recently, I ran a report in Quicken to see what we spent by category for 2010. I then entered these numbers in Excel to get the percent to total for each category. Yes, I am a total nerd!

I wasn't surprised that our mortgage was our number one category at 19% of our spending. But I was surprised that the "Household" category was 9%. Our "Household" category could be anything from light bulbs to major home renovations.

I have a little investigating to do now. Thankfully, I can run a report that will list all of the transactions that I tagged as "Household". I'll be doing that immediately. It's been a long year and I obviously have forgotten about some of the purchases.

The Road to Financial Freedom
Do you want to head down the Road to Financial Freedom? Great, but if you answered NO to my first question in this post, I'm afraid you might end up spinning your wheels.

We have to know how much money is coming in and where it is going. Unfortunately money doesn't just grow on trees for us to use to reduce our debts or increase our savings. We have to either increase our income or reduce our spending. The latter always sounds really painful, but if you track your spending and know where the money is going, there might be some red flags that will make the job a little easier.

How do you track your cash flow? Let us know in the comments.

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Perform Your Own Home Energy Audit To Help Trim Your Utility Expenses

This post was originally published in July 2009.

Our utility bills account for about 10% of our total household budget. I'm not sure how that compares to everyone else, but there has got to be some room to reduce those expenses.

With clipboard in hand, I recently did a walk-thru of our house and performed my own home energy and utility audit. I was looking for things that needed repaired, replaced, and reduced, hoping that I would also find some savings as well. This is what I found, in no particular order.

1. Replace more bulbs with CFLs that are energy-star rated.

2. Unplug the old refrigerator in our basement.

This fridge came with the house and our house was built in 1969. Who knows how old it is, but I'm thinking that it does not have an energy-star rating, LOL. Not only is the fridge in the basement, but it is in my husband's workshop in the basement, so I honestly forgot about it. We used it in the past as a second fridge for beer, drinks, perishable stock-pile, but we acquired another fridge from my parents that I put in the garage for the same use. That fridge in newer, more efficient and in a more convenient location. We DO use it, otherwise I would not have accepted it. BUT I forgot about this lonely old fridge and it has been running, unused and empty for about a year...OUCH.

This can be checked off the list as complete!

3. Reduce the water flow in the toilet in our half bath. It is an old toilet and the water level seems so full compared to our new toilet in our full bath.

4. Schedule a service appointment for the central air conditioner & Replace air filter. It has been several years and we have a very old unit. It has only been turned on twice this summer for about two days each time, but when it has been on it seems to run A LOT. Thankfully, it has been a mild summer in the northeast so far. (Fast forward to 2010 and it has been running all summer with the temperature firmly planted at 95, but it is still working. The service guy told me the unit was at least 15 years old and probably has 2-3 years left in it.)

5. What temperature should our water heater be at? I have no idea. I will have to research and look for the dish washer manual. (2010 - Still have no idea. I forgot about this one and will look into.)

6. Unplug the televisions in our living room and basement. We hardly ever use them, so it shouldn't be difficult to keep them unplugged.

Have you done a walk-thru lately of your home? What have you found?

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This post is linked to:

• Thrifty Thursday at Coupon Teacher
• Making Dollars out of Change at Madame Deals
• Frugal Friday at Life as Mom

When Automatic Billing Isn't So Green.

Over the winter, I reviewed our budget and to try to reduce any unnecessary spending. One glaring unnecessary expense in my mind was our cable bill. When I approached my husband about reducing or even canceling cable, he replied, "what would you do without Bravo TV?". He always knows how to throw it back at me as he knows Bravo TV is my vice.

He suggested that I call the cable company to review our bill and inquire about smaller cable packages.

I made the phone call and after a 30 minute conversation with a customer service rep, my brain was mush from all of the talk about bundling, broadband and Internet speeds. We bundle our cell phone, Internet and cable and because of that we receive a discount. If we reduce or cancel cable, we will pay more for Internet and our speed will slow down. GRRRRRR.

Sensing my frustration, the customer service rep dangled free 3 months of HBO in front of me to appease me. I bit and hung up the phone.

I was glazed over and hubby was going to have to figure this out. After all, electronics are his domain. If it were up to me, cable would be gone, but it's not so easy for us to cancel cable as it will affect our Internet speed which we have grown accustomed to. The bundling makes each service attractable.

Fast forward to July 2010 and my husband asks to see a copy of our cable bill to review. He was finally going to help me figure out how we can reduce our cable bill. Because I signed up for paperless billing, I needed to go online to print a copy of the recent bill. Our monthly bill is automatically paid via a credit card.

I printed the bill and without even glancing at it I handed it to my husband.

"Why are we paying for HBO?", he asked.

"What did you say?", I replied.

"$22.99 for HBO", he said.

Until that very minute, I completely forgot about the free HBO that we were given several months ago. We might have watched a few movies initially, but we forgot all about it.

He called the company to talk about our bill and found out that the free HBO ended two and half months ago and we were now being charged $22.99 a month. He told the customer service rep about the free offer and that we weren't interested in paying for the HBO. The rep refunded our account $71.82.

The new paperless billing that I signed up for is great, because I don't have to worry about missing a payment. But I don't see a bill unless I take the time to look at it online to check for inconsistencies. And obviously I have not done so. Lesson learned.

"You owe me", my husband said with a wink.

My husband just saved us $71.82 because I was asleep at the wheel. I might be the Family Office Manager, but it goes to show that 2 minds are still better than one.

How many of your bills are paperless? Do you still review them regularly?


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This post is linked to:

• Frugal Friday at Life as Mom
  
  

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The January Spending Diet and The Eat From The Pantry Challenge = SUCCESS

I challenged myself twice in January.

For the first challenge, we went on another spending diet in January. We had a successful spending diet in October and I decided that after the holidays we needed to diet again. I just wanted to let the dust settle from the holidays.

My goal with the spending diet was simple...avoid miscellaneous spending. I didn't want to spend any money except for essentials. I stayed out of the stores and only came upon one conflict with not spending.

My four year old has had a growth spurt. Most of the clothes that we got her back in September for fall and winter have now become too small and too short. If you remember I also challenged myself for 2010 to shop second hand for myself and if possible my kids. I looked in two second hand stores, with not too much success on things her size that looked in decent condition and that she liked and would wear. So, I headed to The Children's Place and Old Navy for their clearance sales. I spent about $40 on clothes for my daughter, at prices ranging from $2.99 for a new winter hat(even her head grew) and $9.99 for a 'shirt with a bow' that she fell in love with. One nice thing about spending money on clothes for my oldest daughter is that I can save them for my second daughter.

The second challenge was the 'Eat From The Pantry Challenge' that I participated in along with many other bloggers. It was hosted by Money Saving Mom and Life As Mom.

My goal with the Eat From the Pantry Challenge was to reduce our grocery savings to $300 from our budget of $400. I decided that the difference from our actual spending and our budget of $400 would be split with half going into our savings and half going to a local food bank. My freezer and pantry are not quite as stocked as many of the other women participating. I didn't have too much chicken or turkey in my freezer to begin with so I knew when those items were going to be on sale in January, I would have to take advantage of the sale and I did.

So how did we do...

Our grocery spending in January came in at $ 290.01 for the month. I came in under our goal of $300 with $10 to spare. Honestly I don't know when I have ever spent that little on groceries.

Our total household spending was reduced by $250, with $110 of that being from groceries. The balance was from just not spending on frivolous and miscellaneous stuff.

This week, I will write a check for $55 and send it to a food bank in our town. The other half I have decided to send to Haiti instead of putting in our savings account. I will find another way to fund our savings account, right now those people in Haiti need that money more than we do.

How did you do in January? Did you go on a spending diet? Did you eat from your pantry? I would love to hear about your month, your successes and your challenges.


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January Spending Diet & Eat From The Pantry Challenge

Whew, another holiday season under our belts. I don't think that we over-spent, but I need to let the dust settle a bit and I am proposing that we go on another Spending Diet in January.

We were on a Spending Diet in October and it was successful as we reduced our spending by $500. Although that $500 was quickly eaten up by sudden car and household repairs.

From our experience in October, I learned that the best way to be successful at a Spending Diet is to AVOID THE STORES. Not surprisingly, avoiding the big box stores is a goal of mine for 2010. I will write more about that on January 1st.

Another key to our success in October was reducing our grocery expense. In October, we reduced our grocery spending by $125 by planning our menus and using food in the freezer and pantry.

This leads me to our next challenge in January. I am going to participate in the Eat From The Pantry Challenge that Money Saving Mom and Life As Mom are hosting.

I will buy our basics, like dairy, eggs, oj, fresh fruit and veggies, but I want to really stir up those creative juices and see what kind of menu I can come up with from items in my pantry and freezer. I don't know how long my pantry/freezer will last me. I don't think my stockpile is as extensive as other people taking the challenge, but I will go as long as I can. My goal will be to reduce our grocery bill down to $300 for January. Our grocery budget was $500 back in October, but because of the success we had that month, I reduced our grocery budget going forward to $400. Can I reduce it even more to $300 for January?...we'll see!! This will definitely be a challenge and take some planning. The difference of what I reduce my spending to and my budget of $400 will be divided in half. I will give half to a local food bank and put the other half in our emergency savings account.

Would you like to join me on a Spending Diet in January? Are you participating in the Eat From The Pantry Challenge? Are you up for a challenge? Good Luck!!

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Spending Diet Update

Have you ever declared yourself on a spending diet? We needed to in the past, but never followed through. Back in September, I wrote about how we needed to put the brakes on our spending and starting October 1, we started our Spending Diet. We had a few guidelines:

(Our allowable expenses for the month are in bold and our current situation is in italics)

• Groceries - I am making an effort to eat more from the pantry and freezer to try to reduce this expense.
  


• The sign up for swim lessons for our oldest daughter is in October. We decided to also signed her up for tumbling and to get tickets for the girls to see Disney on Ice. These were definitely an unplanned expenses, but we made the choices together. We'll see at the end of the month if that was a smart decision or not.


• Our oldest daughter's birthday is early in November. We are planning a small party with a few of her friends and cousins. I am going to keep it simple, but fun. Her birthday is around Halloween, so I am encouraging the kids to wear their costumes. I am searching online for some party game ideas. She told me she wants a pink cake, I might try to talk her into strawberry cupcakes that I can make with the strawberries I picked back in June. I still have a few weeks left for this to come together at a realistic price, but still be very fun for my girl.


• Dine out using only gift cards. Like I said back on Oct. 1st, this is the most challenging guideline for us. At the end of a long week, we like to go out to dinner. We still went out to dinner and we used our gift cards, but we did spend over the amount of the gift card.


• We will still get our cash allowance for the month. Trust me it isn't much. I have about 20% of my cash allowance left...yikes and there is still half a month to get through. I might be digging under the sofa cushions and in pockets soon...LOL!


• Our oldest will need a winter coat and I will keep my eye out for a good sale. It was pretty chilly this morning as we were getting ready for school, so I pulled out last year's coat and she tried it own. It still fits. I don't know if it will make it through the winter though because she is growing like a weed, but it gives me some time to find a good bargain.

Our Disallowed expenses:

• Everything else - I am really avoiding the stores, because they are too tempting. We did go to K-mart for a Halloween costume and I used a gift card that I earned in the spring and the costume was on sale. As I look at our receipts from the first half of the month, we have done a good job at avoiding other purchases.

As I mentioned in my initial Spending Diet post, we are trying to achieve self-control. It is not always easy and sometimes my husband and I can be easily swayed. Although, the Spending Diet hasn't really dominated our discussions this month and we really haven't needed to remind each other about it. We both know that we are trying to save money and without any tension we are spending less. I will be curious to see how much more we will have in our account at the end of October. As far as what we will do with any overage, we have not decided. There is a long list of things that we could use it on. My vote is for the item that will best affect affect our bottom line.

Are you on a Spending Diet? How is it going for you?

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We are going on a Spending Diet!

It is October 1, 2009 and my husband and I are going on a diet. No, we are not trying to lose weight, we are actually trying to gain weight...to our bottom line.

Last week, I confessed to our excessive spending over the last month or so. I wrote that we needed to put the brakes on. Well the brakes are on and we are at a full stop. As I was entering transactions into Quicken last week I noticed that we have been doing a lot of spending lately, making many unplanned purchases. Some of the purchases were needed, but there were many that were impulsive and hardly necessities. I talked to the hubbs about it and he agreed that we need to take a brake.

The Guidelines of our Spending Diet.
Allowable expenses:

1. Groceries - of course we need to eat, but I'm going to try to eat more from the pantry and freezer to try to reduce this expense.


2. Sign up for swim lessons for our oldest daughter is in October.


3. Her birthday is also coming up and we are going to have a small party with a few of her friends. I haven't planned anything yet, but I will be working on it this month.


4. I received some gift cards for my birthday for restaurants that we will use if we feel the need to eat out this month. But we must stay within the gift card and our only out-of-pocket expense will be for any tip. This might be our most challenging guideline.


5. We will still get our cash allowance for the month. Trust me it isn't much.


6. Our oldest will need a winter coat and I will keep my eye out for a good sale. Although I was planning on avoiding the stores, so I won't be tempted to shop. Let's hope for a warm October!

Disallowed expenses:

7. Everything else.

What are we trying to achieve?

• Self-Control.


• How much more will we have in our account at the end of October?


• What will we do with that overage? How will it best affect our bottom line?


• How creative can we be so that we avoid spending money on things like food, entertainment, clothes?

Do you care to join us on our Spending Diet?

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Whoa Nellie! Put the brakes on that spending.

Have you ever had a month where you looked at your bank account and you wondered, wait just a minute, there should be more in there? Where did it all go? Well, we are having that month.

I was entering some transactions into Quicken and some $$ went here for that and some $$ went there for this and suddenly we have spent several hundred dollars more than I was projecting. Whether is was eating out too often or buying fall clothes that my oldest daughter needed or my surprise birthday party that I didn't know about, the spending this past month has really added up.

Fortunately, we have a slight cushion in our checking for unexpected spending, but I don't want to take that money for granted. We need to tighten up our belts and rein in the spending.

Did your spending catch up with you recently? Have you had to put the brakes on your spending?


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photo: familybalancesheet: courtesy of my daughter's scary pony collection

Utility bills: Are you lovin' your bills this month?

Don't you just love this time of year? There are usually several weeks or maybe months when it is too warm to use your heater and too cool to need AC. All of our windows are wide open letting in fresh air. The nights are a little breezy that we might still need a blanket. Hot coffee still tastes really good in the cool mornings. AND my electric/gas bill that I got in the mail yesterday was $200 less than what it was in February. woohoo!!

I am not a martyr for frugality, I will turn on the AC when the heat hits the upper 80's. One summer, a couple of years ago, I tried to go as long as I could without turning on the AC and I got bugs in my kitchen cupboards. I had to throw everything out; rice, flour, sugar, pasta, cereal, everything. I cried because of all of the food that was thrown away. It was the first time I have ever had bugs in my kitchen and my mother told me it was from the high heat.

We will go as long as we can and take advantage of the low utility bills. When the AC finally has to be turned on, I become more adamant about making sure lights and other unused electronics are turned off.

Right now I am enjoying the breezy early summer.

Have you noticed lower utility bills lately? At what point will you turn on the AC?

Before an economic crisis hits you, are you willing to live on half?

Did you watch Oprah on Thursday, April 2? Suze Orman was on the show and apparently she predicted an economic crisis a couple of years ago on the show when she lamented about how much debt Americans were in.

On Thursday, Suze challenged viewers, whether they are single or married to live on half of what they are currently living on now and put the other half in the bank. "If all of a sudden you find yourself without a job—or your partner finds themselves without a job—you are now going to have your income cut by 50 percent almost immediately," Suze said. According to her, unemployment also only makes up about 50 percent of your income. It is better to figure out where to tweak and cut now, before a lay-off, then later when you are distressed. She challenged viewers to live on half for 6-8 months, because it can take that amount of time to find a new job.

I immediately grabbed our household budget and tried to cut it in half. It is one thing to actually be in that dire of a situation, but to cut the budget in half before we are forced to do so is another. We don't live lavishly, but we do have some luxuries built into our budget that I'm not sure I want to give up just yet. I wrote back in early March about how we had a difficult February with our business. We reduced our spending in March, but we didn't cut our spending in half. Cutting the budget in half would call for some serious slashing. There is a big difference between slashing and reducing. I need some time to ponder this and of course cutting the spending in half would have to be a decision I make with my husband and I know he is not ready to give up his NFL channel just yet.


Grab your budgets and take a look. Can you cut it in half? Are you willing to try?



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It is time to tweak our budget.

I was reviewing our budget over the weekend. I have some tweaking to do as some categories have changed recently. A couple categories will no longer be used and our spending in another category has changed dramatically. I use Quicken for our personal finances, but I have created an extensive excel spreadsheet to help me split out my checking account balance by my budget categories. I have about 18 categories and each one is a tab on my spreadsheet. Each tab is a running total of its category and the tabs add up to a total page. The total page must always match my total balance in Quicken. My dh thinks I am crazy, but I have done this for years and it helps me keep control of our checking account and our budget. Quite frankly I was never able to really keep a budget until I split my checking account out this way.

The two categories that are going away are Toby and our van warranty. Toby, our beloved dog who passed away unexpectedly on New Years Day, had his own category for his food and visits to the vet and kennel. Our van warranty was purchased when we bought our van in July 2007. We were allowed to pay it over the course of 18 months without any interest or additional fees and the last payment is in March. With these two categories going away I am now left with some additional money a month to put towards other things. While I would much rather have our dog, this is a good thing.

I also wanted to adjust the amount of money I have been setting aside for fuel for our cars. I increased the amount over the summer when gas hit $4.00, but I never went back and adjusted the amount now that gas is back down to under $2.00. I built up quite a cushion, but I have used some of that money for other unforeseen bills. I am going to reduce my gas budget for now and leave a cushion for when gas goes back up. I do believe it is not a matter of IF gas will go back up but WHEN, probably sometime in the spring or summer. I will keep an eye on it and adjust this again when the time comes.

So now with some extra money in our budget I need to decide where to put it. I will look back on our 2009 financial goals and take those into consideration. The money that was going towards our van warranty will now go towards our van loan to help accelerate that. I haven't made any other decisions, I will discuss with dh this weekend when we have our family balance sheet meeting.


How often do you review and change your budget? How many categories are in your budget?