Tuesday, September 2, 2014

Budget Boot Camp - Help Your Marriage - Have a Monthly Budget Meeting


So I was reading this article about how arguments over finances are the #1 predictor of divorce. I think a lot of people suspected or assumed that was true, but this study proved it. The part of the article that got me excited was the researchers' suggestions for preventing and repairing those issues because they're both related to budgeting. They are two very simple things, yet so crucial, they could be the difference between making or breaking a marriage. And they're things anyone can do, financially-minded or not.

Marriage-Saver #1: Each Spouse Should Have a "Fun Fund"

The first solution is for each spouse to have their own "fun fund," as mentioned in a previous Budget Boot Camp post.

Marriage-Saver #2: Have a Monthly Budget Meeting

To quote one of the study's co-authors Sonya Britt, "Couples should set times where they talk about the budget and if changes need to be made to the way they are allocating their money." She continues, "This advice remains the same no matter how long the couple has been married. Our preferences change all the time, so it is important that how the couple is spending money reflects changing preferences."

Budgeting may be a pain at times, but it's a *whole* lot easier than dealing with the fallout from not doing it. Budgeting doesn't have to be hard (see our "How To Budget" here) and it doesn't have to be perfect. It's about putting something together that is good enough to facilitate that monthly discussion revolving around:
- How are we currently spending our money?
- How do we want to be spending our money?
- What changes do we need to make to reach those goals? (e.g. "How can we lower our gas expense?" "Do we need to allocate more money to groceries?")

Getting Started

My marriage isn't perfect (my husband won't play Ticket To Ride with me anymore--I'm kind of a sore loser). But despite our shortcomings, we don't argue about money or finances, largely due to our commitment to making a budget AND sticking to it. By having a budget, the discussions about finances occur when everyone is cool and you are logically making decisions based on needs and wants instead of pointing fingers and being accusatory about the spending habits of your spouse.

What A Monthly Budget Meeting Might Look Light

Every Sunday night, my husband and I spend about 15 minutes updating our budget (meaning, downloading the transactions and re-categorizing as necessary).Once a month (usually on the first Sunday of the month so we can review the previous month) we have a "budget meeting" to review how we did and make adjustments as needed. Some months are smooth and it's a happy, 5-minute "looks good" discussion. Occasionally we realize certain expenses have gotten out of control and it takes 20 minutes to figure out how we're going to deal with it (e.g. "Maybe we need to take money from our entertainment budget and increase our grocery allowance" or "Ugh...time to cut back on eating out. Our "dining-out" budget got slaughtered this month.") It's a time investment, but because those discussions happen regularly in a productive and structured setting, we spend little to no time outside of those meetings discussing money and virtually no time arguing about it. It's a beautiful thing.

If you and your spouse argue about money, you're in the majority. But decide now to do something about it by taking these two steps towards a healthier relationship (and healthier finances!). It takes a bit of work, but the payoff is huge. Consider it an investment in the most important relationship in your life.



Tuesday, August 5, 2014

Budget Boot Camp: Hate Scrabbling to Pay for Big Expenses?


Irregular expenses are a big topic in budgeting, so to ensure it was explained clearly, I turned to my husband Bryan (a non-accountant) to explain how we budget for our non-monthly expenses (e.g. car repairs, insurance, property tax, etc.). Bryan's just a regular guy who been sucked into my budgeting madness. Here he is holding our two boys (I know--they're all pretty cute).

Note that the example below is for known expenses, but we also use it for some of our "unknown" expenses (e.g. car repairs and general savings) using estimated amounts. So when we have big car repairs, they're already saved for. We simply pull the money out of this account that has been accruing savings for months and months. It'd worked like a charm so far. So without further ado, here he is:

We have all been there, you are going along, life is good, the checking account is growing and then all of a sudden, those big expenses hit and you are scrambling to pay for everything.  Budgeting to the rescue!  A few weeks ago Lisa asked me to write about how we set our budget to accrue monthly for expenses that occur once or twice a year.  This system helps to level out the known planned expenses by saving for them every month.  
To start off, I am sure there is some accounting principle that Lisa could explain around this, but the easiest way for me to explain it is that we know some expenses happen a few times through the year (life insurance, property tax, car insurance, etc.) and we take the annual amount (say $1200 for car insurance) and then divide by 12 to get our monthly amount of $100.  At the beginning of each month, I transfer the sum of all those monthly amounts into our savings account (a separate checking account at an online bank).  See the example table below.
Expense
Annual amount
Monthly Amount
Car Insurance
$1200
$100
Homeowners Insurance
$600
$50
Life Insurance
$500
$42
Property Tax
$4000
$334

In the example above, the monthly transfer is $526.
When the bill comes to pay those expenses, we pay them out of our savings account (where the money have been accruing and collecting interest).  The true beauty of this system is that there is no worrying about how we are going to pay the property tax bill, or the car insurance bill, because we have already paid it.  The table below outlines an example of how the system would work

Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
Start
2000
2526
1052
1078
1604
1830
1756
2282
808
1334
1860
2086
Additions
526
526
526
526
526
526
526
526
526
526
526
526
Expenses
0
2000
500
0
300
600
0
2000
0
0
300
600
Ending
2526
1052
1078
1604
1830
1756
2282
808
1334
1860
2086
2012

Our budget is happy because we avoid the stress of seeing the monthly budget in the red. And we are happy because all the stress associated with trying to pay the big expenses disappears as we have already paid for them.  The key to making this system work is to move the money into a separate account.  The reason why this is important is so that you are not tempted to spend it, or think you have enough savings.

This system takes some discipline and I would strongly encourage you to set auto transfers to make it easier.  But the pay off when the expenses hit is completely worth it.
Any questions?

Tuesday, July 8, 2014

Best Buys at Trader Joe's

When we moved to Boston, we lived a few blocks from Trader Joe's, so that's where I did 95 percent of all our grocery shopping. Over time, I've learned that a few things are particularly good buys there. Here are some of my favorites.


Face Wash: Pretty cheap, pretty natural, and this stuff seriously lasts forever because it's so thin.

Jojoba Oil: I use it as a makeup remover. Another cheap, natural alternative. And it takes forever to get through a bottle (a major plus).

If you like buying real maple syrup, this is the place to get it. It seems expensive when you buy the 32 ounce jug, but it's WAY cheaper than buying the small containers at the regular grocery stores.

TJ Brand Pirate's Booty: Okay, I know this stuff isn't actually healthy. But it is so delicious, and it's much cheaper here than the Pirate's Booty brand is at normal grocery stores.

Cheese: Really any and all kinds. They have a wonderful selection (like their honey goat cheese? Yes, please). I just have normal cheddar pictured here, but it's still pretty good and the price is pretty good.

Nuts: They have a great selection of nuts at pretty good prices.

Bananas: At our Trader Joe's at least, bananas are a loss leader item always priced at 19 cents each. 

Share-- What are your favorite items at Trader Joe's? What are your favorite grocery stores?


Tuesday, July 1, 2014

Budget Boot Camp: To Do #6 - Budget for "Funds"


Note: To join our once-a-month e-mail Budget Boot Camp, sign up here. Here are the lessons we've done so far:

I like to budget for expenses that are more flexible in terms of when you spend them, like money for dates, decorating, clothing, personal spending, etc. using "funds." Basically all this means is each month you add a specified amount to your specific fund. The unused portion rolls over to the next month. 

Why do I love budget funds? I love using funds in budgets for a lot of reasons. 
  • Funds are extremely powerful tools to cap runaway spending. The types of things they are best at tracking (clothing, random fun personal purchases, home goods, etc.) are just the types of things that tend to be impulse buys.
  • They make your budget more flexibility-- and that's something that really makes living with a budget more enjoyable and successful. It helps not feel so pinched if you know you can still buy the things you enjoy, you just have to save up for them. 
  • They can help your marriage. Even if you and your spouse are both frugal, you're not the same person, so you're not going to value everything the same. Having a personal fund enables one spouse to buy things they enjoy without guilt (or resentment from the other spouse). Lisa gives some other good marriage money tips in this post.
How do you track funds? There are a couple of ways to track funds-- in Excel, on paper, online, or using the envelope system.
  • Excel. I have a separate tab in our family budget file where I track our funds. There's a column for each different fund. You can download our free template on our Facebook page here. Or you can make your own that suits your needs. The monthly budget shows the full amount of your fund flowing out every month. But you track the balance on a separate tab. Here's what ours looks like.
  • Paper. I know historically I haven't been super supportive of using paper for budgets, but here's one area where it can work pretty well. When we were first married, we tracked most of our budget in Excel, but we had a sheet of paper taped to the fridge where we tracked our fun spending money. On the first of the month, we would add $15 to our account (we've since increased it a bit). Any time we spent money for fun discretionary items, we would write the expense on the paper and update the running balance. It was kind of fun to have it up in an easy to see place (although we would usually move it if we had people over...)
  • Online. Honestly, I haven't tried to do fund accounting using software because I found it a bit frustrating. But, similar to budgeting for irregular expenses, I think you could use the rollover function to make this work on Mint (or whatever you're using).
  • Envelope system. This system uses cash. You deposit your monthly allotment in an envelope, jar, or other container each month and spend out of it throughout the month. The leftover stays in the envelope at the end of the month and "rollsover" to the next. Pros: You will never overspend. Cons: You have to go get the cash each month, and it doesn't work as well for online purchases. 
To Do #6: Set up your funds
  1. Decide what types of funds you want to have (date, individual spending, etc.)
  2. Decide what amount to allocate to each fund monthly.
  3. Set up your system (Excel, paper, online, or envelope).
And here are the products I'm loving: Mr. Clean Magic Erasers (gets crayon off walls, need I say more?) and these leather earrings. My baby always rubs her face up against my cheek, but these are nice and soft and don't scratch her. 

Money Hip Mamas is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.



Tuesday, June 24, 2014

"Where's That Disney Picture" Giveaway! (Closed)

Hey MHM Peeps!

GIVEAWAY CLOSED (Great job, everyone! If you're wondering what the answers were, I've updated the picture below with their location.)
Winners:
#1: Serena P.
#2: Crystal F.
#3: Michelle S.
#4: Stefanie N.
#5: Jordan J.
Congrats! I'll be contacting you by e-mail (the e-mail you used to submit your entries) to get each of you your prize!
Lisa

--------------------
It's the 1 year anniversary of the Money Hip Mamas blog! Lauren and I want to thank everyone for your support. We couldn't have spread the good word of financial fitness (and other fun things) without you. Thank you for reading, sharing, subscribing, pinning, and liking our Facebook Page. In an unrelated note, I recently went to Disneyland with my family. To thank all you MHM readers, I thought it'd be fun to do a "Where's That Disney Picture" Giveaway! I stole this idea from my friend Amy over at House of Nash. Good luck to everyone!

The Prizes 

(1st place gets 1st choice, etc):
A Topsy-Turvy Frozen doll (one side Elsa, flips over to reveal Anna) and various (awesome) Disney kitchen supplies (all of which I really want--I'm taking one for the team by giving them away instead). Mickey hand oven mitt, mickey cookie/sandwich cutter, measuring cups, and measuring spoons.

The Rules

- Two possible points per picture: TWO POINTS for naming the exact attraction/restaurant/store where the picture was taken. ONE POINT for naming the general area/land the picture came from (e.g. New Orleans Square, Car Land, etc.).
- This contest is open-book, open-Google, open-friend, open-Facebook, open-everything. The only people you can't ask are my sisters--they're sworn to secrecy. :)
- E-mail your answers to lisa (at) moneyhipmamas (dot) com. Although we usually LOVE comments, please don't post your answers in the comments--keep it fun for everyone!
- Guesses due Monday, June 30th at 12noon Pacific Standard Time. Winners to be announced Tuesday, July 1st.
- Ties are broken by submission date/time.

The Pictures

13 is my lucky number, so here are 13 pictures taken at either Disneyland or California Adventure. Not gonna lie . . . some of them are hard. That's why it's open-internet, open-friend, etc. Best of luck!

#1:
California Adventure: Disney's Animation Studio

#2:
Disneyland: Haunted Mansion

#3:
Disneyland: Winnie The Pooh


#4:

California Adventure: Mickey's Fun Wheel (I was not a stickler for exact names, FYI)



#5:
Disneyland: Critter Country - Harbor Galley

#6:
California Adventure: Radiator Springs Racers


#7:
California Adventure: Monster's Inc.


#8:
Disneyland: Indiana Jones


#9:
California Adventure: Cars Land: Fillmore's Taste-In



#10:
Disneyland: Mr. Toad's Wild Ride (This one tricked the most amount of people, actually. So if you guessed Pinocchio, you were not alone)


#11:
Disneyland: Mickey's House in Toon Town



#12:
Disneyland Railroad: Lilly Belle Presidential Train Car


#13:
Disneyland: Club 33





Tuesday, June 17, 2014

Money Hip Chats: Vacations

It’s time for another Money Hip Chat. I tried to think of things that are annoying to budget for, and I’m going with vacations. Lisa, what comes to mind first when thinking about vacationing on a budget?

Lisa: I think the foundation of vacationing on a budget is to adjust your expectations. I think a lot of young couples and families run into trouble because they’re trying to keep up the kinds of vacations they had prior to getting married, when it was on their parent’s dime. That’s simply not possible (or wise) when your income is significantly less. Another related issue is when extended families want to do grand vacations that may fit within their budget, but simply don’t fit your budget. It’s a tricky business because turning them down can be a source of family drama. I think that’s why having a budget is so important--it sets a clear expectation. An example conversation you might have to have with older siblings or parents: “Our annual vacation budget for the whole year is $500. That’s simply not enough to join you on a cruise and have enough money left over to visit at Christmas. We’d love to spend time with together--what if we did something else?”

Lauren: That is such a good point. I think it’s important to remember that the point of vacations is creating memories with people you love, and that can be done without spending a ton of money. I’m not knocking great vacations. If you can fit it in your budget, then go ahead. But if it just doesn’t make sense financially, then don’t stress about missing out, because you can still create those memories doing something less expensive-- like camping, a road trip, sharing a beach house/cabin with friends or family, etc. One of the expenses that really seems to add up on vacations (especially with kids) is food. How do you save money on food on vacations?

Lisa: We definitely do a lot of shopping beforehand to make sure we’re stocked up on fruit, water, and snacks for the car (gas stations snacks are crazy overpriced). We also take advantage of whatever food the hotel is offering for free. In addition to breakfast, the hotel we just vacationed at offered a “Manager’s Reception” with a full dinner Monday through Thursday evenings. For eating out in general, rather than buying overpriced combo meals, we buy individual items (I don’t like soda anyway). What do you do?

Lauren: Mostly we’ve just visited family, and our moms have cooked for us :) But Aaron’s taking a month off of work before school starts and we’re going to try and fit in a few day trips. In general, I definitely think eating local food on vacation can be a wonderful source of memories-- but that doesn’t mean you have to go all out for breakfast, lunch, and dinner every day. I basically snack all the time, so when I’ve traveled in the past, I brought a box of Clif bars that I could eat on the go. It was a Costco sized box, and packing it was fine because it freed up some weight/volume for souvenirs on the trip. I still enjoyed eating in restaurants and at street vendors, but having food I brought myself meant I didn’t have to buy food on the go for every single meal, which saved money. 

Another thing we've done to save money is pooled our frequent flyer miles on JetBlue as a family. Don't forget that even small children can earn miles, so being able to consolidate can really help. If you or your spouse travel frequently for work, those miles can be especially helpful as well. Pooling all of our miles got us 3.5 round-trip cross-country tickets for a family reunion this summer. We ended up spending only $300 out of pocket to get all four of us from Boston to Oregon and back again.

Share-- How do you save money on vacations? We'd love to hear from you in the comments below!



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