Actual Expenses: July 2012

The last month has been rough (even by typical grad student standards) and I've been feeling more than a little behind.  One of the things that helped clear my head was taking a look at where I am now in comparison to where I was a year ago and I must say, things are certainly much much better!  I've officially been tracking my spending for the last 18 months, which gives me a bit of data to look back on.  Instead of just looking at the past month's expenses, today I'm going to do a little bit of a comparison.  First, a look at where I was a year ago.

What's that? Where is the savings?  To tell the truth, the above was actually more than I earned in a given month.  I had to take out about $100 from savings a year ago to cover my expenses.  PF bloggers all like to say that the first step is to stop spending more than you earn.  While I agree that is a very important first step, I think tracking what you earn versus what you spend is a realistic action that can help you get to the point where you are spending less than you earn.  If you don't know you are spending more, or how much you are spending, or how much you are making, it's going to be very difficult to come up with any concrete plans to rein in said spending.

Bills(Apartment, Utilities, Phone):  I've reduced my expenses from 49% of my budget to 28% of my budget.  I can certainly be happy about freeing up 21% of my money! 

Food:  In the last year I've gotten way more consistent about bringing a lunch and not eating out as often and it shows. Saving an extra 5%! AND I'm even within my budget on this.

Health, Random & Transportation:  Nothing exciting.  I had a medical bill I wasn't anticipating (really? It takes the lab until now to bill me for tests done in February??)

Airline Tickets:  Apparently July is the time I plan out the rest of my years travel plans.  I'm visiting family much further away this time around and it shows.  At least, I've managed to cover the cost within a normal paycheck!

Emergency Fund:  Automatic savings is a good idea for me.

How was your month?  Have you compared your current spending and your past spending to see if your finances are improving?

Actual Expenses: June 2012

What a month.  Here is the overview of how June actually went (in comparison to the plan).

Apartment & Utilities: YAY!  I'm still happy with how much these expenses have dropped because of my move!

Food:  I overspent a little bit here... but it was delicious!  The is the hardest place for me to stay within budget.

Health, Transportation & Cell Phone:  Nothing unusual and not a lot of spending so I'm happy with the result.

Random:  This was the first time in a while that I had room in my budget to give myself some spending money.  Apparently I have an easier time resisting ALL spending than I do keeping to a budget.  This is something that I'm going to have to keep an eye on...

Slush Fund & Emergency Fund:  It feels awesome to see a good chunk of my paycheck going into savings!

???:  How can there be question marks in my actual expenses?  At least that's what you should be asking if you're paying attention!  Well the truth is that this is money that I haven't spent (yet - although it's probably money that will be spent soon).  Here's the short version of events.  Initially I was thinking I would just put more money into my slush fund while planning on looking at new bikes.  Then, I started planning to buy a bike sooner than I had anticipated (apparently if you ride a bike that's too small for you 8-10 times more often per week than you had been - especially if this is right after you've messed up a knee that you've previously broken - you start having knee problems...).  Then, I had a family situation where I needed to fly to a relative, and I planned to use this cash for that.  Then, the location of said family situation dramatically changed and a different relative bought me my tickets using their miles.  And now, I think I'm going to go back to buying a new bike.  Hopefully within the next week.  If nothing else unexpected happens.  So this is money that is ear-marked for "something urgent" and has been left in my checking account.  Typically I don't leave much money in my checking account as I find it helps resist my urge to spend money (and any auto-payments go onto my credit cards and I keep careful track of my accounts so I don't feel the need for a buffer to prevent overdraft fees).  However, I feel rather silly moving this into my slush fund to earn the half cent of interest I might be able to get just to move it back out two days later.

Current Financial Goals

One of the things I've found since I've started to pay attention to my finances, is that my financial goals are regularly shifting.  How I think about my finances and of what importance goals are have been slowly moving around.  This makes reaching those goals a bit tough as they are moving targets.  Here are my present goals:

CASH

Cash Emergency Fund:
I live in an earthquake area.  I think it's important to have cash (and water!) on hand just in case...

SAVINGS LINKED TO CHECKING

Slush Fund:
The goal is to have one full month's worth of expenses.  I know many people set aside some money every month for upcoming and irregular expenses such as car insurance.  None of my irregular expenses are more than a typical months worth of expenses.  In addition, I like to have a full month of savings easily accessible to my checking account such that I can pay the bills if something happens to my paycheck (there were 5 months straight that my university messed up my paycheck...I may have become paranoid) so I aim to have a months worth of salary in my slush fund.

Actual Expenses: May 2012

Of course my actual expenses are always a bit different than I expect at the beginning of the month.  My May budget was posted here.  Overall, I think this month was a bit expensive, but I'm starting to feel a bit more in control of my spending.

Apartment: It's nice to see this percentage going down.  I had to pay for a week in my old apartment but from now on I'm paying cheaper rent every month! Yay!

Utilities:  I'm happy with this for the moment.  Splitting internet, electricity, water etc. among three people is nice.  We'll have to wait and see what the summer heat does to this.

June 2012 Budget

I'm super excited!  This is the first month of paying rent only for the new apartment!  Which means I'm finally spending a reasonable amount of money on housing!

Apartment:  25%!!!  This is down from almost a full 50% of my income because of my move!  I'm now sharing a two bedroom apartment with three people.  Without roommates this would never be possible.

Utilities:  I believe that I've over estimated the cost here.  Since I just moved and summer is quickly heating up, I'm not sure what to expect as we start to use the AC.  I typically like to budget for the largest month of the year and then use any excess to fill in gaps other places in my budget.

Learning about personal finance

What I knew before I started reading blogs and immersing myself in the world of personal finance:

• Pay off your credit card in full every month
• Saving for retirement should start as early as possible
• Spend less than you earn
• Debt is bad.

What I've learned since:

• The whole concept of an emergency fund
• Living paycheck-to-paycheck isn't necessary
• Idea of paying yourself first (automatic deposits to savings)
• Tracking spending is eye opening
• Not everyone has to work their whole lives until retirement (ie concept of financial independence and/or early retirement)
• How to build a budget that works for me!
• Stop Wasting Time!  Start working towards your goal now!
• Have a buffer!

What I still need to learn:

• Investing
• Retirement accounts
• Rental properties?
• Monthly income streams
• EVERYTHING related to personal finance post building an emergency fund!

While I don't think I was completely ignorant in the ways of personal finance, I most certainly was not on top of it!  I didn't think it was an issue until my paycheck had a few issues and the university was transferring money in and out of my account irregularly in order to "fix" the issues.  It took them four months to get it all straightened out and during that time I was a financial mess and worried.  Luckily this event spurred me to action, and I've been learning ever since. 

The reason I started this blog was to track my evolution through personal finance from basically zero until I reach financial independence.  I find the process of learning interesting: at one point you look at knowledge and say that it's too hard for you to ever understand, and later on you look at it and it seems like it couldn't be more obvious.  You can't teach from the perspective that it's obvious.  You must struggle through material to truly understand it.

So, dear readers, as I feel I've finally mastered budgeting, saving, and emergency funds, what exactly is my next step?

Living Wage

I mentioned previously that I was inspired by by Emily at EvolvingPF who directed my attention to the concept of living wage. I've decided to do a comparison between their numbers and mine (for a single adult) to see how I was doing.

The living wage broken down into categories

Clearly it's a high cost of living area, but I believe that's supposed to be reflected in coming up with the living wage in the first place.  Here are a few things that stand out:

Housing:  Over 50% of any budget is a lot!  Honestly though, I don't know how you could find a one bedroom apartment for what they are suggest as housing cost, so I'm curious as to where they get their data, and if this includes utilities or just rent.  I suppose one way of doing it would be to live further away and commute, thus adding to transportation costs.

I don't like to buy things.

I don't think it's surprising that I'm fairly careful with my purchases.  I don't splurge on wants very often, although I can understand that it takes time to overcome emotional spending.  Instead, most of my every day purchases are food (good quality food, but still food from a grocery store such that I can make my own meals).  Frugality is a clear way of life for a number of people interested in personal finance.  However, sometimes things come up that can disagree with that frugal nature.  Right now I'm struggling to justify to myself that there are a couple of things that are really worth my time, money and attention.

1. A new prescription for my glasses.  It's been about two years since I last went to the eye doctor.  I HATE going to the eye doctor even more than I hate moving.  I know a lot of people avoid the dentist with a similar level of dislike, but for me, it's the eye doctor.  I have a fear of things near my eyes and have passed out on more than one occasion when they do the glaucoma test (the pressure test where they blow air into your eye...).  I need to suck it up and schedule an appointment.
2. A new bike. 

Actual Expenses: April 2012

Considering I wasn't planning on moving when I created my April budget, I think things went reasonably well.  I only took $80 out of savings to cover moving associated costs! The breakdown is shown below.

Apartment: I actually didn't have to cover a deposit since I'm moving in with my significant other (SO) and his roommate (2 bedroom place).  This is high because I will now pay my portion of rent at the end of the month, such that rent can be paid via one check on the first (I think it's fair that no one has to cover rent and then get paid back! Apparently people have different comfort levels with how "group purchases" should be dealt with. Who knew?).  So really, this is rent for both April and May.  This percentage will go down dramatically when everything gets straightened out over the next couple of months!

May 2012 Budget

A lot of things have happened this month that are disrupting my finances (and life in general) and will continue to do so throughout the next month as well.  While April hasn't ended, I've started looking forward at creating my budget for the next month and would like to share what that looks like.

In the last month, Emily at EvolvingPF directed my attention to the concept of living wage (http://www.livingwage.geog.psu.edu/).  It's an interesting idea, although I live well below those numbers for my area.  I've just been trying to find a way to work my thoughts on that into a future post.

Now on to May's Budget:

Striving Towards Goals (Why I Save)

Presentation went well!  *Big sigh of relief* And now back to life...

The one thing about grad school is that it certainly pushes you to work harder than you ever thought you could.  I think I dreamed about my presentation the little bit of time I actually closed my eyes last night.  I have been working through what I wanted to say all day as I was finishing the slides.  I was hoping that I would be able to just go home and crash after the talk.  Unfortunately, it seems that I've ingested just a little bit too much caffeine in the last 24 hours for that to happen...

So instead I'm sitting comfortably curled up and watching TV via hulu and enjoying it.  I have mentioned before that my internet access and my climbing membership are two things I pay for because I really value them, even if I don't need them.  While I think it is important to be realistic about what our needs truly are and fulfill them first, it's also okay to spend a little bit of the money you have earned.

I'm Moving!

This has been a rather hectic month - even more so for my budget.

I've been talking about moving in with some roommates for some time now but it's going to happen within the next two weeks!  I had been planning for this to happen sometime over the summer but I'm excited to get it done before it starts to get really hot.  (My current apartment doesn't have AC and lugging furniture around in +90˚F heat is not what I call a good time.)  By moving in with roommates I will be saving quite a bit of money each month that I'm hoping to direct immediately towards my emergency fund.

Separating the Emergency Fund from other Finances

I opened a separate savings account at a credit union a little over a year ago.  This was a step I took because of all the great finance blogs that I'd just started reading.  I also starting direct depositing money into it from each paycheck. For the rest of 2011 I kept the emergency fund in my spread sheet where I budget and track cash flow.  When I made a new spreadsheet for 2012 I left the savings account holding the emergency fund off of the sheet, effectively hiding it from view.

Ditch the car to save money!

Many people think that they NEED to have a car.  I live in southern California, the place of carmageddon http://en.wikipedia.org/wiki/Carmageddon_(freeway)#.27Carmageddon.27_2011  and I'm here to tell you, you can do just fine without a car.

How I budget in "weeks"

As I mentioned earlier, I budget in weeks and months.  Yesterday we saw a look at my monthly budget for April.  So why do I then also budget in weeks?

I have a really hard time sticking to a budget over the entire month.  If I budget a specific amount for food, I’ll easily go through it in the first two weeks of the month.  To avoid these issues, I give myself a weekly “allowance” that goes towards everything I need to pay for during that week (Monday – Sunday).