Sunday, December 28, 2008

Vacation Fund!!!

Felicia and I decided that when we become debt free and have a fully funded emergency fund, we are going on a debt free vacation to celebrate. A lot of listeners to Dave Ramsey call in to yell about being debt free and a lot of them talk about celebrating by going to Disneyland. We have never been and think it would be nice to take the kids when they are a little older. Right now, vacation is not in the budget, but we are getting started by adding in change that we get into a piggy bank that I made. All it is an old diaper wipes box that I painted green and wrote "Vacation Fund" on. I am thinking about updating the amount of the Vacation Fund once a month. We will see.

Christmas was good for us. We did not buy any presents for any adults and stayed in our budget. My son got lots of presents from his grandparents, aunts, and uncles. Felicia and I got the best present, not having to worry about how we are going to survive on December 26th.

I do have to admit I was a little slow in doing the budget for this next month, but I got it done. Felicia and I both looked over it and agreed to it. We added more cash envelopes and maybe that will help us even more.

Saturday, December 20, 2008

Spending is a Hard Habit to Quit!!!

Spending is a Hard Habit to Quit!!!

Felicia just asked me what we were going to eat for lunch, and I am trying to think about what I can go out and buy, because I just did the dishes and they are not even dry yet. I don't want to dirty them again. But a voice told me to cook the pizza we had in the freezer, I yelled out to her I can make pizza and she said she could make the salad. We sat down next to each other and I told her what my first thought was for lunch, but for some reason this lunch tasted really good. I think because it was a tasty, healthy, and guilt free lunch.

I think we count this as a small victory, we did not buy lunch and we ate food that was in the house already paid for. I don't know how many times before, we would buy groceries and then throw most of it out.

Spending is a Hard Habit to Quit!!!

The Magical Dresser

Babe,

I know I complain a lot about the budget and your new leader, Dave Ramsey, but I wanted you to know that I really do want to learn how to live on a budget and get better with our finances. Being able to take a vacation and not having to worry about paying the bills would be really nice, and I know we can do it. Just give me a little time. It's hard to adjust to not getting the kind of food I want all the time, especially when I am pregnant and craving things all the time! Maybe after Maya arrives, I'll be better :) I love you!!!
Email written to Andres a few days ago


I had a wonderful dream last night. We lived in a big, beautiful house and had a few friends over for a party. One of our friends mentioned something about being strapped for money and was worried about losing his house. Andres and I took him into a room that only had one piece of furniture in it, a dresser. We opened one of the drawers and there was bundles of money in it, and when we took some out, more of it magically appeared. We gave him all the money in the top drawer and told him we didn't need it back. We just wanted him to use it wisely. Imagine if we all had a magical dresser that just handed us out money whenever we needed it?

When I woke up, I thought about how we have been trying to budget, and maybe on some level, we are trying to create that magical dresser, something that we can always fall back on. I started thinking of Dave Ramsey's baby steps and especially, the Envelope System which we have been trying to put into effect. So far, we only have two envelopes: one for gas, and one for weekly groceries. I was thinking that we probably need to take that next step and start adding more envelopes to this system and like Dave says, "When it's gone, it's gone." This is something that we're bad at. If the money is gone, we'll still try to find a way to come up with more of it and end up spending money that we really didn't have to begin with.

I have to admit that I've had a little resistance with this whole budget thing. But Andres said the other day that one of the things he would really like to do when we're finished clearing our debt is to take a vacation (and pay for it all in cash). I keep thinking about how we have never really had a stress-free vacation in which we weren't worried about paying bills once we got back home. Even on our Honeymoon, we were worried about how to make ends meet once we arrived back in Dallas. I want to try to put more of an effort into the budget, and really work together to get something that we want. Maybe all it takes is a dream to change your mindset, because that magical dresser sure does sound nice at this point.

Thursday, December 11, 2008

OOPS!!!

Felicia looked at the bank account today and discovered we have not been sticking to the agreed budget. I know it was both of us. We both have been buying lunch, which is not in the budget. I think that was the big killer. We both feel really bad about it. We have been taking so many steps forward that I hate that we jumped back a little. These next two weeks we are going to try to keep a close eye on it. Knowing the problem now, we have to find a solution. For my part, I am going to ask around for ideas for easy brown bag lunches to take to work. We can't do a lot of lunch meat, because Felicia is pregnant and she can't have too much of it. I need to email mom, my aunt, and my cousin the chef to get ideas.

Wednesday, December 10, 2008

Take that First Step

Lately, I have been trying to read different blogs and articles about personal finance. Looking at different programs, so far I like the Dave Ramsey approach. Some people write about how simplistic it is and if it is the right approach for these tough economic times. I am not a personal finance expert but I like the program. I like how you are able to accomplish little goals and that encourages you to keep going. When we finished Step 1, we were so excited and we even cheered out loud as we saw $1000.00 in our savings account.

I have been wondering about others I know and if the program will work for them and some of them were interested but have not taken the first step. My mom, two sisters, and cousin and his girlfriend bought the book, but they haven't yet finished step one. I know my cousin and his girlfriend are now working towards it, they have sat down together and figured out what they want to accomplish. One of my sisters is tying to get it together now after she was faced with not having any money for gas to get to work a whole week before her next paycheck. I tried to counsel and share our experiences with them, but I don't want to come off as lecturing or judging them. When they finish step one, I am going to ask them how they feel and post it here for them, so they can track their progress too.

Tuesday, December 2, 2008

Can you do something that you love for a living?

For the past couple of months, I've been learning to sew. I found a book at Barnes N Noble about making sock dolls and I was inspired. I didn't start sewing with the intention of selling my creations. I started out wanting to feel closer to my mother and grandmother (they both make beautiful blankets and quilts) and I also needed the creative release of doing something with my hands. But today I actually made my first sell, a green monkey by the name of Neon. It happened because I made a sock monkey for my best friend and she started getting all kinds requests from people and asking where she got it from. A friend of hers said that she wanted a green monkey for her baby daughter so I said that I would see what I could come up with. Today, she went by to pick him up and my friend said that the woman fell in love with him and her whole face lit up when she saw him. I have to say that I'm a little sad to see him go but knowing that somebody appreciated him so much makes me feel so proud. Now that I'm learning more and people are interested in what I'm making, the thought of opening up an Etsy shop enters my mind more and more. It feels so nice and refreshing to make some money doing something that I love as opposed to working at my dead end job. Maybe I can take a cue from Andres and find out something that I actually want to do for a living that pushes me to use my creativity, as well as brings in a steady paycheck. Is that too much to ask for?

Saturday, November 29, 2008

Somebody Said The B-Word

Man that was hard!!!

The way we started budgeting was one pay period at a time. A day or two before we got paid I would sit down and figure out what needed to be paid, make a list and send it to Felicia to look at and review. She would tell me what she needed or wanted to buy and we would work it in. It has been working and it has allowed us to catch up on bills that we were behind on, but now it is time to move on to the monthly budget. Dave calls it the "Monthly Cash Flow Plan," I like that better.

I sat down and went through every category and filled in what we needed to pay and what I thought we should budget and tried really hard to make sure our budget reflected our goals. Filled in our amount for monthly savings, rent, utilities, food, transportation, clothing, medical, personal, recreation (not much of that will be going on for awhile), and debt. When I was done I added it all up and plugged in our income and realized, it was still more than we make. Looked at it and started trying to figure out how to bring it down. First thing off the list, Replace Furniture and then repairs and tires. We might be setting ourselves up for an emergency, but we are working on being able to put those categories back in shortly. We have a storage space that we are paying for, but have not used any of that stuff for two years. We are going to have garage sale and whatever does not sale give to charity and start saving that $82.00 a month.

The budget started to look good, but that was the easy part. The next step was the "Allocated-Spending Plan." We had to spend every dollar from every paycheck on paper. The form has 4 columns for every pay period, you fill in the date for the pay period and the dollar amount, then the rows have a budget category and you determine which paycheck that category is coming out of and it also keeps a running countdown to zero to make sure every dollar was spent. This was the hard part. I thought you budget and spend the money, but if you pay one bill too early then you may not have enough to buy groceries for that week. One mistake I made was I added an amount that I was supposed to deduct and threw the whole thing off and it took me an hour to figure out where the mistake was. Hopefully, it will get easier. It took me 3 hours and 2 tries to get it right, I know next time it won't take so long.

Saturday, November 22, 2008

Glad She is on My Side!!!

For a long time, we have been hunters and gatherers. We lived in the moment and when we were hungry, we went out and fed ourselves no matter the cost. We would spend an outrageous amount of money at restaurants, or going to the movies. There we plenty of times when we did not bat an eye at a dinner bill that was around $60. As we are getting older our mentality has changed a little, we are trying to become farmers.

We are looking ahead and planning for the future. We have taken the seeds of our goals and planted them, now we have to continue to water it, and make sure to give it plenty of sunlight. We will get there, like farming it takes time and patience. Felicia is turning out to be a great farmer!!!!

I am so glad I am working on this with Felicia. She is really trying hard to stick to it, there are times when I am like let's buy something to eat and she reminds me that we cannot do that. She was telling the truth when she said that now the question for dinner is, what are we going to cook and now what are we going to pick up. Any relapse can probably set us back a few months on our goals and she is keeping me in line. Right now, we are trying to decide if we should see Dave Ramsey Live or not at the end of March.

She is Right!!!

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She is right!!! I am not sure what it is, but when I get really stressed out the first thing I want to do is hide and not deal with anything. When we were engaged and moved in together, we put our finances together and tried to run our household. I know when I was young my mom handled the money and I saw how it would stress her out a lot, so I guess I thought I would let Felicia deal with it. We split it up 50/50, her job was to pay the bills and my job was to complain about having no money.

Now, that is not working together. Since I did not where the money was going, I wanted to spend like we had all the money in the world. In the end, I realized it was not fair to Felicia. She had to keep track of all the bills, pay them on time, and when money was thin, deal with me complaining.

Now we sit down before each pay day and spend the money before it is in the bank. We look at what bills are coming up, what we are going to spend on household things, but the very first thing we do is pay ourselves. Felicia still goes online and pays most of the bills, but we both know what needs to paid and when.

I still remember those early days, we would fight and blame each other and then still not solve anything. We would take out payday loans, skip a utility bill to go out and have fun because we were stressed and needed a night out. Taking the night out, did not make us feel better about money the next day. I know we have only been doing better with money for a few months, but we can enjoy a conversation about money and our goals. We are on the same page!

Goals:
1. Debt Free
2. Buy a house
3. Retire comfortably
4. Send our kids to college
5. Open our dream business, Felicia's bookstore

Wednesday, November 19, 2008

Finally on the same page

We have been on somewhat of a budget lately, thanks to Andres' fascination with Dave Ramsey, a financial guru that he listens to on the radio. Even though I am slightly sick of hearing Dave Ramsey's name, I have to say that his principles are working for us. We have put close to $2500 away in savings for when I am out on FMLA and I have to admit that it feels good to not even miss the money that we are putting away every time we get paid. We always make sure to pay ourselves first and then focus on the important bills, and then we pay the not so important bills (cable and DSL). We've also been eating at home a lot more often lately, and I was telling Andres that my mindset has changed from a couple of months ago. Whenever we were ready to eat dinner, I would always think, what are we going to go out and buy for dinner? Now I think, what are we going to go home and cook for dinner? We still splurge a little bit whenever we have a little bit of extra money, but it hasn't been nearly as bad as what we were like a few months ago. I would always stress out about paying the bills and I think what stressed me out and angered me was that Andres didn't really take notice of what we were spending money on. I handled the bills, and he would complain about where the money was going. When I would tell him to check the bank account, he would get very stressed out and not want to deal with it which would make me not want to deal with it. It helps that we are on the same page now and working towards our financial goals together.

Sunday, November 16, 2008

Don't Call Me Normal



Just went shopping again using the envelope system, this time there was money left over. A couple of weeks ago, we had to get 47 cents from Felicia's purse to cover the bill and did not get enough milk for the week. What a difference this time because I got everything I needed and still had $4.97 left. That is a little over $5.00 difference.

This time I went to 3 stores to get the best prices. First was El Rio Grande Supermercado,$49.17, second was Tom Thumb, $10.49, and he last was Minyard Food Stores, $35.37. I am really excited because the total was under budget, $100.00 and I haven't even learned how to incorporate coupons into shopping yet.

I have to admit I felt a little weird because while shopping I wrote down the price of everything on the list and walked around using my calculator. Everyone else seemed to know what they wanted and threw it in the cart. I saw kids waiting until their parents turned their backs to throw what they wanted in the cart too. If being weird allows us to be debt free and better provide for our family, then don't call me normal.
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Friday, November 14, 2008

Hit the ground running!!!

Thinking ahead, Felicia and I started to discuss Christmas gifts. We have both decided that we will buy presents for the kids and not adults besides our parents. We are not planning on buying anything for our friends, my brother, my sisters, and cousins. This will keep our Christmas bill down and allow us to continue to work toward our goals.

Felicia and I were talking money at lunch and we both realized that this topic is not a stressful conversation anymore. It does not end with me in a bad mood or her stressed out. We know we are still at the beginning stages of turning things around but we have hit the ground running. We pretty much have the two months of her income to cover expenses when she is out of work and we almost have the deductible for the hospital when the baby is born.

Saturday, November 1, 2008

Lesson Learned

We are going to try to implement the envelope system.
We are going to pull out cash for some of our budget categories and put those funds into their own envelope. We are using Gas, Grocery, Gift, and Blow$$$ categories so that we spend the cash instead of swiping our debit card. A lot of times, we don't realize how much we have spent until its gone and their is still stuff we wanted to buy with that money. This way when the money is being pulled out of the envelope and we see the Presidents leaving our hands, we can ask ourselves if this money is being spent wisely. I think it will come in handy for the groceries, because when I am at the store and I am heading for the checkout sometimes and I want to grab the Oreos or whatever my friend Little Debbie has just created. We will give it a try and see what happens. I know we will do good, because we feel bad when we mess up.

Thursday night, we messed up. Well, to be honest it wasn't Thursday night when we messed up, it was more like when we made the budget. Not looking ahead, we forgot to budget Halloween. We did not set aside money to finish my or Felicia's costumes and ended going over budget as a result. Felicia said it best when she that she felt bad and did not want to F*** up again. Lesson learned we need to think ahead, like Christmas is coming up and we have starting saving. We are going to budget a little from these next paychecks until Christmas comes.

Monday, October 27, 2008

Step One

How did we get started?

We looked at our bank statement and realized we spent almost $1000.00 eating out. A thousand dollars for us two and, at the time, a 15 month old baby, and we spent $500.00 on groceries, which we throw most of it way because we didn't eat at home. We started to cook more at home and put as much as we could in savings.

Initially, our plan was to take 3 months to save. We figured to save 1000.00 in 3 months we needed to put away, 333.33 a month. That number looked huge to us, so we broke it down per paycheck and we decided to save $85.00 a check. We got paid 4 times a month between the both of us. As soon as the direct deposit hit, we transferred 85.00 to savings. What helped us save faster was not eating out and I got a bonus check from work and we put 200.00 away from that.

We have not moved on to Baby Step Two, because we are expecting a baby. Felicia and I decided that we should probably save enough to help cover expenses because again she would not be paid during maternity leave. We increased our paycheck saving to 100.00 and at the end of one month, we had 400.00 left over and moved 200.00 over to savings. I was wondering if we were doing the right thing by delaying Step 2, but Dave Ramsey told a caller the other day that he should put off Step 2 and throw anything extra into savings until momma and the baby were home safely. When we decided to do it that way, it seemed to be common sense and I was glad to hear it made sense to Dave. I am not going to lie and say it was easy. Our plan was start going to the the grocery store on Sundays for our weekly shopping. We missed one Sunday and for that whole week we were eating out and wasting money. We paid a stupid tax on that one. One lazy Sunday caused us to go over budget by 200.00. Once we started eating out, it was let's buy this and that. None of it were huge purchases but none the less we have nothing to show for what we spent.

Our goal is to spend 100.00 week on groceries and the first few times it worked out to be 150.00 a week, but this last time, we spend 96.35 and later today we have to buy milk for the baby. That may put us over a 100.00, but the groceries are lasting 2 weeks this time. I am not sure if we can do that every week, but it would be nice to be able to.

Advertising Works!!!

My wife and I are expecting a baby girl in February. We are very excited and cannot wait to meet her and for her to meet her older brother. Naturally after we celebrated the good news, we started to think about how to prepare for this addition to our family. We looked around us and our home started to look even smaller than what it really is. Where are we going to put this stuff? How are going to afford all the new stuff? My wife and I would talk about our excitement and our worries. Of course, money is a concern. If we had the money, we can just go out and buy everything we need and buy a bigger house before the baby is born. Right now, we simply cannot afford it and that it is frustrating.

The stress of it all was started to get me, so much that I started losing sleep over it. We don't have anything in savings, we have too much month at the end of the money. My energy level was starting to get sluggish, I started to show up late for work more and more. I started to question my job security, because I work in the financial industry.

One day I got off of work early and on my home, I saw a billboard that said "Act Your Wage," and it had a picture of bald guy named Dave Ramsey. I laughed and said who acts their wage. If I acted my wage, I would have nothing. I went on like usual, stressing about money and how are we going to afford the new baby. On my home from work for a week, I kept passing the billboard and for some strange reason I kept noticing yet. Finally, I was in the car when the Dave Ramsey radio program was on the air and switched from 1310 The Ticket to 570 KLIF. There was a guy with a Southern accent talking about how he went broke for stupid things he did and how he rebuilt his wealth. He was giving people advice on how to do the same. One caller caught my attention, she called looking for advice from Dave. She was divorced with kids and fell behind in her bills because her ex-husband lost his job and could not pay child support. Dave asked her about her income and debt and then he told her that she needed to sale the house because it was too much for her. This is the part that got me. He told her that she did not need to rely on another person who is obviously unreliable to help pay her bills. She needed to take responsibility and take care of herself and her family.

I am not exactly in that lady's situation but by stressing and losing sleep over my financial status, I was in essence not acting on my responsibility. I was not helping to take care of my family, I was not setting a good example for my son or my soon to be born daughter. When I get in trouble, I rely on other people to help me. When my son was born, we relied on my dad to help us out with the bills until my wife went back to work. After listening to his show, I looked him up online. I read about his seven baby steps and testimonials about people who made less or the same amount of money as me and had more debt than me becoming debt free in no time. I figured I am not getting anywhere by throwing my hands in the air and wondering what am I going to do, so let me give this guy a try.

I went to Barnes and Noble to buy his book The Total Money Makeover, but they did not have it in stock. I ended buying another book of his, Financial Peace University Workbook. The book talks about getting on a budget and Dave's lays out his 7 Baby Steps to financial freedom. I started listening to his show as much as I could, I would schedule my lunch break around the show so that I could eat and listen to an hour in the car. After listening to him and his listeners and reading his book, my wife and I decided to give it a try.

We finished Step One pretty quickly, which is to save $1000 to start an emergency fund. In fact, we started on July 2nd and finished August 15th. I know it is not much of a cushion, but just knowing we have a $1000.00 in the bank allowed to sleep better at night.

I have been telling my mom, sisters, brother, and cousin about finishing Step One and how good it felt and also a little about Dave Ramsey book. My mom told me she bought one of Dave's book, but was not sure if it was the right one. She bought Total Money Makeover and then a few days later I bought it. A couple of days after that, my sisters bought the book as well, and when I was talking to my cousin, he told me that he bought the book. Felicia and I have company on this journey to take control of our money. Felicia has not read the book or listen to Dave's show, but she probably does not have to since I am always telling her about what I read or what I heard. She is sick of hearing Dave's name. She has said this week she is going to read the book too.