I'm new here

[HereIam2011]

Hi everyone,

I just found this board and thought it would be a great idea to join sine I'm planning on starting a budget this year to keep track of my spending. Since I just turned 25 I figure its about time I figure out where all my money is going! I usually eat out every meal almost every single day. That is until two weeks ago. I went from spending about $25-30 a day on meals to spending $75+$35+$40 for those two weeks on groceries and cooking at home. From those three trips I still have enough dinner and lunch food for the next 6-7 days at least. Just need to buy breakfast items. So already in just these two weeks I have saved a good amount of money. Now I've also limited my trips to Target to twice a month since I swear every time I walked into that store $100 got spent. Lowes was even worse since every visit cost me about $250 on average and thats been cut down to one monthly visit. Hopefully by continuing to do this I will be able to buy a new car this Spring. My plan also includes buying a new Spring and Summer wardrobe and new windows for my home by December. Last years goals were a new Driveway, new roof, landscaping and paying off a Loan. Having saved for it monthly really helped me get it all done.

The plan for this year is to put $400 a month into a car fund to mimic having to pay for a car payment. I paid for my car in cash and I've had it for 8 years now and its up there in mileage. $60 is getting put into a clothing fund and $325 into the window fund each month. Luckily I already have half of what I need for the windows and a $5k down payment for the car which I don't plan on spending more than 25k on. I started saving last June the moment I wanted a new car and windows. Which helps a ton!

Wanted to add that I do plan on moving within the next 3-4 years and so the new windows will be mostly for resale purposes and I'm trying to buy the car this year so that when I move it will be paid off and I won't have a high mileage car that I need to depend on in a new city. My concern is that this is a bad idea since I won't get the money out the house from the new windows but I will be more comfortable and my heating and cooling bills will be lower. The house was bought for about 30-30k under the value of what other homes were being sold for. Other homes in the area (Most) do not have driveways, no new roofs, no new windows and very simple landscaping. Right now they are selling for about 60-80k more than what I owe on the home. Should I be spending all this money on these improvements when I know I won't be here for long? The other idea is to rent out the house since I plan on renting for a while in the new city when that time comes. Hopefully this is easy to understand as this is the first place that I've asked any sort of question!

[maat55]

I would start by establishing your basic needs. Make a list of your necessary spending like:

House payment.
Average utilities.
Basic food needs.
Insurances.
Gas.

When your looking to create a financial plan, you will take your monthly pay and allocate certain amounts to certain areas. This will tell you how much you can afford for retirement savings(10-15%), housing(25% of take home pay) etc.

You are wise to save in advance to pay cash for your consumer needs like autos, TV's etc. Dave Ramsey recommends no more for all vehicles(car,motorcycle,boats) 50% of one years pay. Example: If you earn 50k, your total value of vehicles should not exceed 25K.

Do you have any debt?

As far as your house, I would not invest into the windows if I were leaving within the next 5 years. Ask yourself this question: Take the value of your current home and consider it sold. Would you take that money and buy your current home for a rental property with your move considered in?

I highly suggest you read a few books on personal finance, I recommend these:

The Total Money Makeover by Dave Ramsey
The Automatic Millionaire by David Bach

They will help you to establish an overall financial plan.

[krantcents]

Hi everyone,

I just found this board and thought it would be a great idea to join sine I'm planning on starting a budget this year to keep track of my spending. Since I just turned 25 I figure its about time I figure out where all my money is going! I usually eat out every meal almost every single day. That is until two weeks ago. I went from spending about $25-30 a day on meals to spending $75+$35+$40 for those two weeks on groceries and cooking at home. From those three trips I still have enough dinner and lunch food for the next 6-7 days at least. Just need to buy breakfast items. So already in just these two weeks I have saved a good amount of money. Now I've also limited my trips to Target to twice a month since I swear every time I walked into that store $100 got spent. Lowes was even worse since every visit cost me about $250 on average and thats been cut down to one monthly visit. Hopefully by continuing to do this I will be able to buy a new car this Spring. My plan also includes buying a new Spring and Summer wardrobe and new windows for my home by December. Last years goals were a new Driveway, new roof, landscaping and paying off a Loan. Having saved for it monthly really helped me get it all done.

The plan for this year is to put $400 a month into a car fund to mimic having to pay for a car payment. I paid for my car in cash and I've had it for 8 years now and its up there in mileage. $60 is getting put into a clothing fund and $325 into the window fund each month. Luckily I already have half of what I need for the windows and a $5k down payment for the car which I don't plan on spending more than 25k on. I started saving last June the moment I wanted a new car and windows. Which helps a ton!

Wanted to add that I do plan on moving within the next 3-4 years and so the new windows will be mostly for resale purposes and I'm trying to buy the car this year so that when I move it will be paid off and I won't have a high mileage car that I need to depend on in a new city. My concern is that this is a bad idea since I won't get the money out the house from the new windows but I will be more comfortable and my heating and cooling bills will be lower. The house was bought for about 30-30k under the value of what other homes were being sold for. Other homes in the area (Most) do not have driveways, no new roofs, no new windows and very simple landscaping. Right now they are selling for about 60-80k more than what I owe on the home. Should I be spending all this money on these improvements when I know I won't be here for long? The other idea is to rent out the house since I plan on renting for a while in the new city when that time comes. Hopefully this is easy to understand as this is the first place that I've asked any sort of question!

I agree with TJ's post. I would add looking at each expense and think about how necessary it is and can do something different. I think you are starting to see how out of control you were spending $25-30 per day. Good luck.

[buildmybudget]

Good for you changing your lifestyle! I remember when I was living alone in an apartment I had the exact same eating habits and ate out every single meal. It literally destroyed my budget and then even worse, it really affected my health. It turns out if you only eat Chipotle and Jason's Deli for a month or so you'll likely tear a few muscles when you try to maintain a heavy exercise routine.

When it comes to budgeting, you really just need to pay attention to your goals and where you want to be financially. You've got to start with your budget, prioritize your expenses, and then cut out any fat that is going to prevent you from reaching your financial goals. It's important to see where you are heading financially so you can make better decisions today!

[snafu]

Congratulations for being smart enough to know you need to make better use of your money. Creating a budget that serves your needs is a good 1st step. It is so much more than just tracking where monies were already spent; it outlines how to manage future income. Please list your regular expenses including those that come up irregularly like insurance, property taxes etc. and we can make suggestions that help your circumstances.

We just got a Lowes outlet in our community and I'm going there as soon as the Grand Opening hoopla ends. I decided to lock my Credit Card in the trunk for the 1st visit to force me to re-consider all that neat stuff.

[HereIam2011]

Hi maat,

Thank you for the ideas and suggestions. Looking at my accounts I tend to save about 15-35% of my income and put it into separate accounts, Short term savings, and long term. The cars I am looking into are between 13k(used) to about 22-24k. Mostly looking for a new car but I've also been looking at used cars with very low mileage. Any money left is usually spent on things like Target and eating out and I honestly had been avoiding adding up what I spend at those places. My total housing expenses are about 25-27% of my income with taxes,insurance, utilities (I could only find the bills from June until last month so that's the average I used) and house payment. Just calculated that this morning and very happy with that number! That does not include the extra $100-$300 I put in extra each month or sometimes I put in a bit more up to a double payment. I think I've paid it down enough to only owe between 23.5 or 24 years on it. This will be my third year in my house this Feb. I don't know whether to continue paying it off quickly now that I will be moving in a few years.

I moved out on my own at 17 so that's pretty much molded me into this whole saving for things program. Way back when I had graduated high school, worked full time and paid for community college while renting a basement studio apartment in someones home. I remember having a really tight budget. The only thing that saved me is the weekend job I had for two years prior in H.S and all the money I had put away. That allowed me to pay for the first year of school and about 6 months of living expenses. But I was still able to save money each month so it wasn't all bad.

Zero debt-Thankfully! Except for house "debt" which I don't consider true debt.

Yeah, I've been going back and forth about the windows. It's a toughie! So I've been saving for them with the idea that if I don't use the money I can use it for something else.

Honestly turning the home into a rental home is very appealing to me. I know its not an easy task to handle and dealing with renters but still interested enough to at least consider it. At this very moment my home would get me about $400 over my total current house expenses. I've spoken to one landlord in this neighborhood who rents out homes and just asked what they get for homes similar to mine but without the upgrades. Just so many decisions to make and I like having opinions on what to do. No one I grew up with is a home owner and most of them live with parents and are still in debt from school or bad choices so Its hard finding people to talk to. My parents are horrible with money so that's a big no-no.

I will check the library for those books! Thank You

I would start by establishing your basic needs. Make a list of your necessary spending like:

House payment.
Average utilities.
Basic food needs.
Insurances.
Gas.

When your looking to create a financial plan, you will take your monthly pay and allocate certain amounts to certain areas. This will tell you how much you can afford for retirement savings(10-15%), housing(25% of take home pay) etc.

You are wise to save in advance to pay cash for your consumer needs like autos, TV's etc. Dave Ramsey recommends no more for all vehicles(car,motorcycle,boats) 50% of one years pay. Example: If you earn 50k, your total value of vehicles should not exceed 25K.

Do you have any debt?

As far as your house, I would not invest into the windows if I were leaving within the next 5 years. Ask yourself this question: Take the value of your current home and consider it sold. Would you take that money and buy your current home for a rental property with your move considered in?

I highly suggest you read a few books on personal finance, I recommend these:

The Total Money Makeover by Dave Ramsey
The Automatic Millionaire by David Bach

They will help you to establish an overall financial plan.

[HereIam2011]

We just got a Lowes outlet in our community and I'm going there as soon as the Grand Opening hoopla ends. I decided to lock my Credit Card in the trunk for the 1st visit to force me to re-consider all that neat stuff.

Thankfully i do not have a Lowes outlet anywhere near me!!! We have I think 5 or 6 Targets within 5-15 minutes though so I don't know whats worse.

[HereIam2011]

Okay, So far I've been trying to find receipts/looking at past card statements for everything and seeing what I'm doing with my money. I think the biggest thing I'll need to take control off is weekend trips. This year I will try to limit trips to two vacations and just a couple mini trips scattered in instead of leaving every weekend. This will help me appreciate the trips more if they are farther apart.

[HereIam2011]

I'm still keeping up with the not eating out plan. So far so good! I have also not gone to Target except for the day after Christmas. That's when I bought a whole bunch of stuff for my Christmas donation pile(next years). But that's it! I didn't hang around in the other sections that day.

[Mr Nice Guy]

One thing that helped me out a lot is a spending diary. Microsoft excel has pre-made spreadsheets to help accomplish this. Or just go pen and paper route. Save every receipt in your wallet/purse throughout the day, and enter it into your "diary" or budget every night. Get into this routine. It will accomplish at least two things, should you be diligent about it.
1. If you categorize your diary (like a section for groceries, a section for eating out, a section for bars, a section for electronics, etc) you will see where EVERY cent is going. Divide that by your total income for that period (week, month, quarter, etc) and you will have a good percentage to get a big picture.

2. It will make you think twice before you spend money. Its almost as if you feel guilt about entering it into your diary that night. Surely you need to have gas in your car, can't feel guilty about that, but did you really need to spend money to eat lunch out when you are at work, when you have the fixings at home to brown bag a lunch?

Its not to make you feel guilty, it just conditions you to think twice, and ultimately change your habits.

Good luck!

[snafu]

The start of a new year is a grand time to 'day dream' about where you expect to be in 5 years. It's important to set goals about relationships, career, financial goals, health status and whatever else is important to you. If you write them out they seem to always work out. I often wondered if writing goals is the 1st step of a pyschological personal commitment.