Written by RS, February 10, 2010

This is like reading an account of my life - five years ago. We have a lot in common, aside from the fiance (single and loving it). I had a similar income, similar debt, and similar lifestyle, all the way down to the dog that I (still) lavish with affection whenever possible! Five years later, I am almost debt free (a couple years left on the student loan), and after a lot of hard work and a few raises I have worked up to a 10% savings rate in my 401k and bought a townhouse last year. So, consider me proof that it can be done!
So, having been where you are, I offer a few humble thoughts and lessons learned:
- Take a look at your car. Consider increasing the payment, even just a little each month. Paying off my car was a huge tipping point, allowing me to put my entire car payment toward credit card debt. Or maybe go extreme and get rid of the car all together, saving both payments and insurance. I know that's a tough one, but worth consdering. I kept my car but started taking the bus to work, saving on parking, insurance (lower premium for less miles/year), gas, and maintenance. There's great people watching on the bus too. :)
- Look for inspiration to cut back and save everywhere. Obviously you are on the right track with this DailyWorth exercise. MP Dunleavey's Women in Red articles were a great help to me (thanks, MP!). I also talked with my friends about my goals, so they knew why I was cutting back on happy hours, skipping fancy dinners, cutting back on gifts, etc. You might be surprised to learn that many of your friends are in the same boat, and they may not only support you but join in the fun. Girls night in can be just as fun and a lot cheaper.
- That said, it is important to treat yourself once in a while. Take a little of that precious $326 and go out to dinner or happy hour once a month. Make it a special occasion that you look forward to, a reward for all the good work you are doing toward your goals. If you don't have a little wiggle room, you will burn out and start to have a bad attitude about all the hard work left to do.
And one more thing: can everyone please leave the poor fiance alone?? He's not the focus here, and anyway he sounds like a swell guy who a) has no debt and b) doesn't mind his gal airing her (and his) fianancial dirty laundry for all the world to see. Sounds like a keeper to me.
Looking forward to your next post!

Written by Nice, February 10, 2010

It's great but you don't have a lot factored in for other monthly expenses like personal care, personal supplies, etc. I guess that's the next step? When I did my spending plan, I wrote down all my expenses, every dime or penny I spent on anything in an entire month, and then I put them into categories...before I tried to budget. Like, how much did I spend at Starbucks? Did you not eat out at all the entire month? Great start but I'm sure there are some hidden expenses somewhere. Gosh, there always seems to be.

Written by Petunia, February 10, 2010

Congrats on deciding to get a handle on your finances. I recommend tracking your progress, via whatever method works for you.

I think you are right to focus on the small steps you can make right now. Once your fiance is working, keep your big picture goals in mind when making spending decisions based on your new higher income. Avoid thinking "well, we can afford now". Of course, you will expand your lifestyle somewhat, and that is fine. But take care you don't finance a second car, finance some furniture, begin eating out daily, getting massages regularly, clothes shop more, etc.; you don't want to realize one day that you are spending that entire second income, you do want to use the bulk of it towards those bigger goals.

Written by Tricia, February 10, 2010

Good for you, Danielli! You are definitely not alone when it comes to feeling overwhelmed with goals--I and many of my friends do the same thing. But I found it helpful to write down a list of intentions I have for my money (or lack there of at the moment), what I want to do with it, and what my goals are. It's great that you've posted your monthly budget too--it can be shocking but also eye opening to see the hard numbers! I applaud and support your hard work! Thank you for inspiring more young women to do the same!
Best,
Tricia

Written by Tess, February 10, 2010

I congratulate and applaud you on what you are doing and for being brave enough to share your story. Following up on what was written by Nice, I think that you would benefit from looking at your expenses in more detail. Where to you factor in things like toiletries, paper products and cleaning products? Do you lump them in with groceries because you buy them all at the same place? What about a haircuts or any other beauty maintenance expenses? Do you or your fiance take any maintenance medications not covered by insurance? What happens if you have a medical or dental expense, such as a co-pay for an office visit? This may not be a monthly expense, but it is going to come up at some time, even if it is only for an annual check up. Do you have a car? What about auto maintenance and repair? Finally, there are always occasions for which you need to buy presents and wrapping, i.e. Mother' Day, Father's Day, birthdays, a shower or a wedding, etc. I'm not saying this to discourage you - I'm saying this so that you can set yourself up for success. I would always have a budget that worked on paper but not in real life because I had all sorts of expenses that I hadn't accounted for. As much as you want to quickly pay off your debt and save, you may want to change the amount to less than $200.00 each month until your fiance finds a new job and you have two incomes. As a last note : KEEP UP THE GOOD WORK!!

Written by Lora, February 10, 2010

Congrats, Danielli, on taking the first step. Knowing how much you owe can be scary especially if you've never really looked at it before. The only thing I would look like to chime in about is to make sure that you continue to communicate with your fiance your goals and progress. My husband and I had a discussion in the very beginning of our relationship about our finances such as who would be responsible for paying the bills (me!) and who would keep track of our budget (me!). I'm an accountant, what can I say! My husband is not the most fiscally responsible person, lol, and he could admit to it. This made taking over the finances much easier and now we both know where we stand financially. I make sure to keep him updated about our debt and also our savings. Good luck on your journey and know that you are not alone!

Written by Tina, February 10, 2010

Great first steps! I've gone through the same calculation with my husband and here's where we found new areas to save:
- gym membership: I found that Planet Fitness offers a yearly membership for just $99 or month-to-month just $10/month. Great machines and very clean. => $23.- savings
- Internet and cable: we turned off cable and have hooked up a spare computer to our TV. We now watch everything off of Hulu.com or Boxee. We buy an occasional movie off of iTunes. => $60.- savings

Maybe this helps!

Written by dreamcatcher, February 10, 2010

Hello, I am at the beginning of getting out of a lot of debt, I blamed my ex for a long time, and finally turned and looked myself in the eye,and said, "you need to get out of debt" so I am on the long road to financial freedom. I am actually coming up for air now, it was several months that I felt as if I was drowning. I am glad you are doing this before you are married. and glad your fiance is your support, they are the greatest and biggest support you will ever have in life. High five to your fiance. I am doing this with my family, my S.O. and my 4 children, I have had to say no too many times to count. But it is getting easier, I am glad to finally see smiles on there faces. It is good to get out of debt. keep it up, look forward to the next update.

Written by Kristina Moffitt, February 10, 2010

I don't see anything on this list about entertainment? Do you not spend money at restaurants, at the movies etc?

Also, clothing?

gifts?

And I wish my gas bills were $40 a month! Do you live in a city with great transportation options? Lucky You.

Good listing of your expected expenses!

Written by CARRIE, February 10, 2010

Great job on the budget. Now that you've found the extra $100 a word of advice...have the $100 direct deposited into a savings account from your check. I found that if I did that I didn't spend it unless I needed it for an emergency (e.g. fender bender) and had to go to the bank to use it.If the money hit the checking account that I used for daily expenses It was gone as soon as I blinked because instead of making homemade cookies for a birthday gift I'd be buying someone something since I knew the checking account balance was to the good..and by the way I am an accountant and I do know better...what's that saying do what I say not what I do. :)

Written by Sarah, February 10, 2010

I'm in college, so while my expenses are quite in the same category, I've discovered that it's the little things that keep eating away at my money. I'm trying to cut back on the Starbucks, Borders, and everything else that always seems like its inexpensive, but really adds up by the end of the year. I'm pretty good about not eating out (I love to cook), but it'd be nice to have a little more in the checking account.

Written by Jaime, February 10, 2010

Good luck Danielli, you're off to a good start. Now that you and your fiance know you can live off of your paycheck alone, try to put most of his (once he finds a job) towards your debt and savings goals. I'm so happy for you that you've learned that it's just as important to have small goals as well as large ones. It is so frustrating to feel like you're never gaining ground and those smaller goals allow you to keep your momentum going.

Written by Susan Bender Phelps, February 10, 2010

Danielli you are a woman of courage. You have a plan that is a work in progress. You have a lot of freedom to rework and rethink as you go. Saving and increasing monthly payments is a strategy I live by, too.

My husband and I have been struggling becasuse his business came to a standstill because of the financial melt-down. We got very creative about cutting back and it looks like his business wil make it, even though I got laid off in August and had to leap into a new business earlier than I had planned.

I do like that Hulu.com or Boxee idea to replace cable TV. If there are enough sports offered that way, my husband might just go for it.

Every time I hear a new money-saving strategy I look to see if it is a fit for us. Some do and some don't.

All the BEST! And please keep sharing.

Written by Jill, February 11, 2010

I believe that you have taken the first step into getting your finances in order. Doing a spending plan and sharing this with all of us is tremendous. You should be proud of yourself :)

I had similar financial issues a few years back, so anything is possible. Debt can be paid off and you can move forward. Beware of hidden expenses - the things that you think are little but add up. One way I got through this was to not let myself feel deprived. I rented movies from the library (free), I had pot luck dinner parties with friends at my house (everyone brings a dish) so you still have entertainment without dinning out. Check out what your town has to offer for free and organizations offer.

Good luck - I know you can do it! Keep us posted on your progress.

Written by Kat, February 11, 2010

Decent budget, though as many noted, there's quite a few things that aren't mentioned, which means a bigger chunk of that $326 is spoken for than you might realize. I'm not saying you have to track every penny (I personally use "Everything Else" as a budget category in mint and love it), but remember that $326 seems (to me, at least) like it's going to be needed to pay the bills.

There's a couple monthly bills that you should try to negotiate--your gym membership, your cable bill, and your credit card rate. Just call up the companies and ask for a lower rate. Sometimes it helps to check the website first to see if they have any special deals going on. Also think about how much you use your gym membership. I seem to remember that you live in a warm climate. Perhaps you could run outdoors, do calisthenics, maybe get some home free weights? If you like taking classes, perhaps you could pay per use? Same goes for your cable. Do you really use it enough to justify the cost? Most TV shows that people watch are on the major networks, available over the air in HD for free.

To be honest though, you aren't going to out-frugal your way out of this one. You need more money. If your fiance is holding out for the right job, great, but he should take something right now to help with the bills. He can still do a full time job search with a part time job. You should also look at making more money, whether that means overtime, earning a raise, or moonlighting.

Written by jen, February 11, 2010

you should really put more towards your cards because you wil not gain in interest in a savings, what you pay in interest on your cards. great job though on facing the real parts of adult life!!!

Written by Rachel, February 11, 2010

That's great! It's a good looking budget. And it has the one thing I always like to put into my plan, a little bit of mad money. :) Sometimes a girl just needs a night with the girls or a day at the spa. Plan for it and it's all good!