Budget Basics

The summer I finished college, I quickly got a part-time job.  Don't misunderstand, though, this was not the kind of part-time job that helped me squeak by - the first few months, as I worked my way into more hours, I was making $300-400 a month.  Talk about being broke.

By the time the winter came, I was more in the realm of $600-800 - enough to keep my car rolling and make the minimum student loan payments when they kicked in while my parents covered everything else in my life.

The next spring, I got a promotion, and started making enough to put me above the poverty line.  I knew it was time to make a budget.

There are a million people and blogs out there that will tell you how to set a budget, and I did a lot of research before making my first budget.  Two years later, my budget has changed to reflect a growing income and changing student loan payments, but the main tenets have remained the same.  A budget is personal, so my budget theory is personal.  I believe a good budget should:

• Focus first on paying for necessities: rent, groceries, utilities, transportation
• Focus second on paying off debt.  NOT minimum payments, but aggressively paying it off.
• Be envelope-based.  This means that you intentionally set aside a certain amount to spend in each category (groceries, gas, clothes, enterntainment, etc) and when you run out of money in that category, you stop spending for the month.
• Think long-term.  If you're paying insurance every six months, calculate the monthly amount and include it in your budget so you aren't spending money you'll need soon.
• Reflect your priorities.  It's more important to me to build up a "romance fund" so I can see my long-distance guy than to buy new clothes, and the amounts I put in each category reflect that.
• Be zero-sum.  The total of your spending categories should equal your income.  Every dollar should go to a category, with no extra.  If you plan out each category and have extra, recalculate.  Give yourself a little breathing room in tight categories, add to your debt pay-down plan, or put the money in your savings every month.
• Hurt a little.  If your budget doesn't pinch a little and make you think twice about purchases, then it is probably not getting you toward your long-term goals (yes, you should have long-term financial goals).

If it's your first time making a budget, it can seem kind of impossible to figure out what categories to create and how much to put in them.  To help get started, I really like Dave Ramsey's Monthly Cash Flow Plan.  It lists more than 50 categories you should think about, and it offers "optimal" percentages to help you see what's reasonable or not.  Again, my percentages don't always line up because some categories are more important than others - I don't always agree with Dave Ramsey - but it helps me be more conscious of where I might be spending too much.

Apps I Love: Envelopes 2

The biggest part of the last year and a half for me, since I finished college, has been getting my financial situation under control.  I put myself through private school, so I walked the stage with quite a bit of debt - almost double what the average Minnesota grad has.

Since I also finally got myself a smart phone, I decided to try out budgeting apps.  And I tried out a lot of them.  I had a general idea of what I wanted, but it was hard to get a firm idea of the important features without trial and error.  Plus I had the added difficulty of trying to figure out what features the app actually had - sometimes the descriptions in the App Store are pretty useless.

After trying a half-dozen or so budget apps, I've finally found one that I have stuck with and would recommend called Envelopes 2 by Emdentec Ltd.  As far as I know, Envelopes 2 is only available for iOS.

My basic criteria for a budget apps were:

1. Defining my own categories - I live in a small town, so I shop at Walmart a lot.  I didn't want the kind of app that automatically drops certain stores into certain categories; sometimes I get groceries at Walmart, other times I get socks.
2. The ability to "roll-over" unused funds/overspending from month to month - for big expenses, I save a little every month, and I wanted the app to reflect that.
3. No need to connect my bank accounts!
4. A free app.

The two biggest obstacles I ran into looking for my budget app were related to my third and fourth criteria.  Everyone knows that free apps are generally not full-feature.  Several free apps I tried only held so many transactions before you needed to upgrade to the paid version. (I know $0.99 or $1.99 isn't a lot of money, but I am being as frugal as possible to knock down my 50k+ debt.  Why should I pay for an app if I can find a free one or I can just do it the old school way?)  Other free apps only worked if I connected my banking info, and I'm sorry, but that's just shady to me.

In homage to the "old school way," one of the apps I tried to use for my budget was Apple's Numbers app, which is just a spreadsheet app that happens to have a budget template.  Personally, I found Numbers to be clunky and difficult to work with on my iPhone.  I think I used it for one month before I gave up.

I have lots of reasons for loving Envelopes 2:
You can have as many envelopes (categories) as you want, and they can be color-coded.
After you set up your envelopes with the specific amount per day, per week, per month, it is only two taps to fill your envelopes.
There are no passwords needed.
You can add a note right to the front of an envelope, which comes in handy if you owe someone money, and add notes to each transaction.

It rolls over the balance from month to month, as long as you don't clear the transactions.
You can empty the transactions from each envelope and start from scratch at the beginning of a new year with just a couple of taps.
Since you can personalize everything, the app is great for people who want to follow the Dave Ramsey system but would rather use a debit card than carry bunches of cash.

If you're considering trying Envelopes 2, here are two things to remember:

1. Because there are no passwords/log-ins with this app, it's pretty much centralized to your phone.  You and a spouse can't both access the same envelopes on your separate phones.
2. This app requires you to manually add transactions.  If you can't bring yourself to do that, you probably want to go find one of the apps that you have to connect to your bank accounts.

Envelopes 2 works great for me.  If you try it, let me know what you think!

The 52 Week Challenge Ends

This weekend has been awesome for me motivationally, because Friday was the end of the 52 Week Challenge.  After a week of hyper-emotions related to realizing it has been a year since my college graduation, getting to take the money out of my challenge box was just what I needed to feel like I'm making headway.

The Challenge is easy to start, but can be hard to stick to for one simple reason - once you get about halfway through, the amount of money going in your box (and out of your budget) every month gets pretty high, especially if you're not making a whole lot of money to start with.  My celebration on Friday when I went to the bank, though, was so worth it.  Not only am I now set for my best friend's wedding, but I added to my vacation fund AND got to write a check for six months of my student loan payments.  It is the best feeling to knock out so much debt in one fell swoop.

CouponCabin App Review

If any proof of my less-than-hip lifestyle is needed, let it be this – I got my first smartphone about six weeks ago.

And with a brand-new iPhone comes the excitement of wading through the App Store. After downloading a game my friends got me hooked on in college and the Facebook app, my first addition was the app CouponCabin.

I was looking for an app that would help me save money on groceries and every day things, not just one that would get me a coupon code for Macy's or Sears. I searched blogs for app reviews to point me in the right direction, but the ones I found weren't very helpful. I went with CouponCabin because it has a dedicated "grocery coupon" category. 

Well, it may have a dedicated category for grocery coupon category, but that didn't mean it was simple. I ran into a long process with several problems:

1. To open the coupons, you have to email them to yourself. 

2. From the email, you have to follow a link to a website. 

3. Following the link does not take you directly to that specific coupon. You are taken to a general website where you have to search for the coupon you want. 

4. After finding the coupon, you have to print it, but printing requires you to download a driver (after following so many links through places I was entirely familiar, for computer and personal safety, I did not download the driver or try to print any coupons). 

Apart from the grocery coupons, I did have success using the "in-store coupons" at Jo-Ann Fabric, but it wasn't complete success.  When you search for coupons using CouponCabin, you end up with a page like this

Notice how they have the expiration date conveniently listed? Take it from me, they aren't always accurate. I opened one coupon for Jo-Anne that was supposed to be valid until December but actually expired in March, a week before I was going to use it. 

At the end of the day I wouldn't recommend CouponCabin – but I'm not going to delete it until I find something better. For now, I'll just search for in store coupons while I'm waiting in line for bigger purchases. 

If you have a coupon app you love, leave me a comment!

Challenge Check-In

So as I said earlier, I've been working my way through the 52 Week Challenge.  If you have already started the challenge, or if you're still mulling it over, I hope you let this little check-in serve as an inspiration, motivation, or whatever it is you need to take the next step with it.

I have to say, I really love the feeling of saving this way.  Typically, I "save" by depositing a portion of my check directly into my savings account, and I never see the money, which is probably what the majority of people do.  We are not the generation of hiding money under the mattress or burying it in cans in the backyard, but for the Challenge, my "challenge buddy" Ellie and I both decided to keep the money in secret places in our homes - there is something so satisfying about being able to pull out that wad of cash and count it!

I am just past the 40-week mark, and that's stretching my budget tight.  Through a series of unfortunate events, I'm still working part-time at minimum-wage.  The chunk of my check the Challenge takes up can be daunting, especially when I am staring down needing to replace my laptop, get new tires on my car, and just subsist.  At just about three months to go, I'm finding inspiration in what the Challenge will accomplish for me.

When I'm done, I'm breaking my $1,378 into three equal parts:

1. $459.33 to pay for being in, traveling to, and gifts for my best friend's wedding this summer (with coupons, sales, and ride-sharing, this should pretty much cover everything I need for the wedding).
2. $459.33 into my "love fund" for the next time my long-distance guy and I are in the same zip code (more than enough to cover a hotel).
3. $459.33 to use as a bonus loan payment, which will get me about six months ahead on one of my loans (because I'll use it as a lump sum rather than breaking it up among my loans).

Just stick with it!  The Challenge is going to take so many burdens off my mind, and I hope it does the same for you.

Student Loan Control

May graduates hit a trap.  And that trap is in the form of "your first loan payments are due RIGHT before Christmas."

So while we all take a moment to feel sorry for ourselves and freak out that there is absolutely no way we've been out of school for over six months already, I'm going to share something that will make you feel less like one of the poor people on the Titanic.

The point of the website I've shared (click the hyperlink, people, I made it easy) is largely to help you estimate how much your loan payments will be.  Yes, I know, your loan servicers are doing that for you, but hang with me for a second.

The bottom half of the loan calculator (which looks like this, for those who still haven't been convinced to click the link)

has a section where you can experiment with what will happen if you pay more than the minimum, whether it be once, once a year, or monthly.

Now most of us who are buried under student loans ($51k - I know what I'm talking about) feel like the minimum payments are a stretch, and the little extra we could maybe eke out every month isn't going to change much.  But read on and take heart!

One of my (many) loans has a calculated monthly payment of about $39, but the contract I signed mandates I pay at least $50 a month.  So, in essence, I am paying an extra $11 a month.  By adding that $11, I will pay off this particular loan 51 months early.  That's over four years of my life without payments, all for the cost of a restaurant pizza.

Gather up your loan info, click the link, and get yourself in control of your debt.  If one less night of half-price apps with your friends or one less bottle of wine a month can give you a few loan-less years, it's so worth it.  Calculate and recalculate until you find what's going to make an impact on your life!

Moving Home

Let's face it.  There is a huge (somewhat joking) stigma about young adults who move back home after college.  A Pew survey from 2011 reported 53% of 18-24 year old moved back in with their parents, at least temporarily.  And with everyone from bloggers to Huffington Post and the Wall Street Journal throwing in their two cents, it seems like the horse is getting beaten to death over and over again.

I sympathize with both sides, I really do.  As a recent grad, I totally get the frustration and stress that comes with no income, high debt, and suddenly finding yourself back in the strange rut that you left years before, usually glad to see it go.  But I also completely understand how, for parents, there is suddenly another mouth to feed, more laundry, more utilities, more people fighting over the remote, and just a general stress that comes with having another adult with a totally different way of life.

Moms and Dads, let me clue you in, though.  As much as you may think we kids are looking forward to coming back home footloose and fancy free, for most of us, it sucks.  Not because we're broke, or because we can no longer make 2am runs to McDonalds without being looked down upon, or because we're sleeping on the Superman sheets we bought at 13.  It's because, at some point, the words "you live in my house" come into play.

Don't get me wrong.  I understand that it is your home, you pay most of the bills, and you have the right to set ground rules.  But a sentence like that only serves to antagonize and trivialize.  Antagonizes because it reminds us of all the ways in which we currently come up short - in debt, under- or un- employed, back in the nest; trivializes because it suggests that we are not allowed to have an opinion/our opinion is invalid because we haven't fit the mold of "success."

There has to be a better way.  Living at home doesn't have to be painful or cause a million regrets.  We all need to learn to talk to each other with love, and then maybe the process of getting on our feet won't feel so wrong.

The Post-Vacation Cranks

Last week, I took a five-day, much-needed, long-awaited vacation with my significant other (long distance relationships require vacations).  It was, in a word, glorious.

And then I came back to reality.  Which means a week of babysitting, meetings, and motel work, all compounding the fact that I would do anything to be back on vacation.

Is it just me, or does going on vacation actually make real life harder to live?  I have had such a case of the post-vacation cranks that I quite frankly don't want to be around anyone but a few chosen people, none of whom are actually less than a few thousand miles away.

So, how do you, I, or anyone else go about getting rid of those return-related regrets?  Frankly, I don't know.  Keeping busy seemed to help temporarily, but today I'm going to try making a list of five things about being home for which I am grateful, in the hopes that an expression of gratitude will seep into my emotions.

1. The technology that lets me get in touch with loved ones across continents.
2. My pillow - I have a memory foam pillow that is so much better than anything you will put your head on at a hotel.
3. Not living out of a suitcase.
4. Being able to cook what I want instead of eating out (talk about a price tag) every meal.
5. A chance to make money, in the hopes of saving up for another vacation very soon!

The 52 Week Challenge

An addiction to Pinterest occasionally reveals a very useful idea.  About two months ago, I discovered "The 52 Week Challenge," which seems to have become a bit of an internet sensation.  Now, I have no idea where or how the Challenge got started, but as a broke girl who is budgeting like crazy, I decided to give it a shot.

The 52 Week Challenge works like this.  Each week, you stash money into a jar, box, savings account, safe, or other holding place where for the duration of the challenge (one year), you will not touch it.  The first week, you put in $1, the second week, $2, and so on up to week 52, where you add $52 dollars to the kitty.

Starting with a dollar seemed a little ridiculous to me, and working up to $52 still seems a daunting task as I haven't gotten up to full-time hours at work yet, so I have been a little leery about the task.  But, as you can see from the chart below, if I can stick to it, it will be worth it.

Almost $1400 stashed away?  Who wouldn't love that?

One of the best parts of this growing way of saving is that by week 3, the money you have saved is already double what you're putting in for the week.  I'm only at week 5 at this point, so it's still pretty easy to put that small amount away.  However, I know it's going to get a lot more difficult, so here are my tips if you want to try the Challenge.

1. Decide beforehand what you're going to use the $1378 for, and whether you'll divide it or spend it all on one idea.  For example, you could put all the money toward a vacation, or you could split it in half and use $689 to pay off debt and the other $689 to buy a new TV or whatever it is you're desiring.
2. Write down what you will use the money for at the end.  No joke.  If you write down the goal and put it somewhere you will see, you're much more likely to actually follow through.  Plus, with it written down, you'll feel very guilty if you break your plan to pay off debt and instead go for a whirlwind shopping spree.
3. Find someone to do it with you.  Especially as the amounts climb, it'll be very easy to cheat and not put money in or take money out.  Having a friend do the Challenge alongside you will keep you both accountable.
4. Write the dates in your calendar, and cross off the weeks as you put the money in.  Otherwise you'll forget.  Obvious, but simple.

You Might Be a Hotel Maid if...

I recently went back to work at the same motel where I worked in high school.  This Memorial Day weekend has been a typically busy holiday weekend, and I will have worked three cleaning shifts by the time the weekend is up.  I will say this: cleaning motel rooms does not get any easier, cooler, or less disgusting after college.  It does, however, leave me with a LOT of time by myself to think (I keep forgetting my iPod, so talking to myself happens), and I have come up with a list of idiosyncrasies that occur among hotel maids.  And so, a la Jeff Foxworthy, you might be a hotel maid if:

1. You can make a queen bed in under four minutes, but the bed you sleep in hasn't been made since you last washed the sheets (quite possibly a while ago).
2. You come home from work with pockets stuffed full of used dryer sheets that got folded into the laundry.
3. When staying at a hotel, you always tip the maid.
4. You haven't dusted your own home for the better part of a year.
5. You have a favorite cleaner for wood, tile, stainless, fiberglass, and carpet, but none of them are made by the same company.
6. You can spot a hair on the floor at twenty feet.
7. You can't accomplish anything if your hair isn't in a ponytail.
8. When staying at a hotel, you refuse to brush your hair unless standing on carpet (because it's easier to vacuum it up than wipe it off the bathroom tile).
9. You want to physically harm anyone with the audacity to actually use the in-room microwave.

Thank God I don't work for a chain.

I wear jeans and a T-shirt.

Any fellow maids out there?  What did I miss?

Be safe this Memorial Day!

Garage Sales, or Making Yourself Feel Better about Getting Rid of Things

As I mentioned in my previous post, I have a hard time getting rid of things.  I am sentimental about everything, and I also suffer from that frequent female "I'll wear that again someday" delusion.  I also happen to have a ridiculous number of books, very few of which I want to get rid of.  All this tumbles up into overcrowding, lack of space, and the necessity of getting rid of things.

There are a lot of ways to get rid of things: giving them to friends or relatives (usually I'm on the receiving end of the relatives part, which explains why I have some old lady clothes in my goodbye pile); donating them to some sort of worthy cause, whether it be thrifting, a homeless shelter, whatever place seems acceptable; or outright throwing it in the trash.  However, I will be having a garage sale.

Google Images is pretty accurate.

I'll be the first to admit, I don't really even enjoy going to garage sales.  I never seem to find anything good, unlike most of my relatives.  I hate the inanity of people trying to quibble over fifty cents (I am not a haggler.  Just pay the price and be done with it).  And generally there's a fair amount of heat and sun involved, which is no good for a pasty person like myself.

Now, I'm just out of college and flat-broke, which explains most of my reasoning behind having a garage sale rather than donating all of my stuff.  But as I was preparing for the garage sale (I'm not going to lie, I'm still not done and I only have about two days to finish.  Whoops.), I realized a garage sale really has more to it.  A garage sale, and the act of a random stranger purchasing that which you no longer care for, validates your caring for it in the first place.  Someone else's desire for an item means it was okay to hang on to the item, because at some level, it has a value.  It's a lot easier to give something up if it means someone else wants it.  At the end of the day, that's all most of us really want, right?  Validation, appreciation, affirmation - it's an emotional human need, and it carries weight.

Even from a stranger at a fifty cent price tag.