Tuesday, February 16, 2010

Ashley Starts Budgeting | The (Totally Awesome) Plan

First! Check out my hard work this weekend - I'm in the progress of redesigning this little  blog and am unreasonably proud of the new menu bar I created. It took days - but I finally got it looking exactly as I'd imagined. Roll your mouse over the links and see how fun it is! (It's okay to toot your own horn if it took days of work to create, right?) I still have lots to do - but I've got a header, footer, and menu bar done. And rounded corner sidebars. Whee! 

Okay, now on to budgets.
Our basic goal is to save $10,000 for an emergency fund. You might laugh at how little that is, or you might only DREAM of having $10,000 in a savings account. We've been passively holding the goal of saving $10K in the back of our minds, but never acted on it until recently. I decided it was time to get serious and buckle down.

The Details:
People don't often talk details about money - how much they make, how much they spend, and how much they owe. I'm going to break that taboo and divulge these "secrets".

Mike and I make about $2600 a month after health insurance, taxes, and 401(k) contributions (I know, we sound so adult, right?)

Our Monthly Spending:
First, I determined our monthly fixed expenses (using this template)
$960 - Housing & utilities (internet, gas, electric, water, sewer)
$200 - Transportation
$300 - Groceries & household supplies
$150 - Education (books, tuition)
$50 - Medical
$50 - Car & renter's insurance

Then, I decided how much we'd like to save:
Savings: $600/month

Leaving us with our fun money:
Fun money: $260/month - so $65/week for restaurants, coffee shops, clothes, Target trips (except for "groceries & household supplies"), and gifts. It sounds like a lot, but it goes far too quickly.

I worked backwards from how much I'd like to save, because I'm willing to spend as little as possible if it means we'll have a well-stocked emergency fund. Thankfully, we're still able to eat out and

A Few Notes:
- I keep my Etsy and design income in a separate account. I use the money for business expenses. (Although, I am toying with the idea of paying for a trip to Vegas entirely with my freelance/Etsy money. No need to blow our savings goals for a trip, right?
- We are debt free (paid my student loans off last year!) and hope to stay that way except for a mortgage. Someday. Someday far, far away.
- We're lucky that our families are BOTH going on trips to the beach this summer, so we don't have an inkling to go on a vacation apart from those two trips. Which means, we don't have to save money for a trip!

Being responsible isn't nearly as much fun or as easy as just spending what we have (aside from a safety cushion in the bank), but I think we're going to stick with this. Goals - like our $10K goal - help us to see our progress and feel proud of ourselves. Bi-monthly automatic withdrawals from our checking to savings and obsessively checking Mint.com also helps. :)

In just a month of concerted effort - we've grown our savings account from $2,000 to $3,700. Results, baby. It makes skipping pizza delivery for homemade meal excavated from the freezer worth it.


  1. Ah, I love it. Right now, Matt and I have no budget (or savings) and make about $4,300 a month. Our mortgage eats up a huge chunk of that ($1,700) and so do our wave runner payments (a lovely purchase, but so not worth $500 a month) and we have credit cards... which are the DEVIL.

    Truthfully though, i'm just bad at budgeting. I'm afraid that even once he's home and we're credit card debt free... (and those babies are CUT UP) it's going to be harder because I feel like i'll "need" things with that extra money. I don't want to earn more and spend more... you know? I want to earn more, spend the same, save more.

    Any tips for the financially clueless? :)

  2. I LOVE the new look :) And I'm a nut who absolutely ADORES budgeting, even if it's only to see how much we can save! Good luck with your goal! We have the same one (aiming for this September) but with a new baby on the way ~ well, I won't be TOO disappointed if we don't make it!

  3. This post makes me hate Chicago. We pay almost twice as much for housing and utilities. Ugh. Plus nearly $400 in loans. Luckily we've cut our transportation costs down to about $60/month. But still. Ugh. Chicago.

  4. Just a word to the wise, from someone who learned the hard way and wishes to spare others from those mistakes. You NEED a good credit rating. Which means you NEED to have credit cards AND USE THEM. Yes, you heard me... Obviously, the goal is to not use them to indebt yourself to a point where you can't pay, but use them for something you COULD afford to pay cash for and then take a couple of months to pay it off. Yes, I understand that means you'll have to pay interest. But NO credit is even WORSE than BAD credit. And if you aren't using your cards (if they are paid off) your bank will CLOSE THE ACCOUNT, which will DAMAGE your credit rating. I wish I didn't know all of this from experience, but I DO. So please, don't make the mistakes I did, earn a AAA++ credit rating and be happy!

  5. This is totally awesome! Congrats.

    Also, your new header bar is amazing. Are you willing to do design work on websites that aren't your own?

  6. Congratulations! Nice Budget. I am impressed. We are trying to save too- but we are still getting the hang of the new situation.

    Love the new look- so cool.

    (P.S. At MsDarkstar- you just need to use the credit card and pay it off every month to get better credit. Paying interest is not a good idea at all. True- closing an account is bad for your score- but I have never heard of a bank closing a card.)

  7. Do you get paid twice per month? If so, there will be 4 pay-periods during the year when you get paid for three weeks of work instead of two. If you decide up front to put the entire windfall into savings, then it can add up pretty quickly.

  8. Could you PLEASE tell me how you live off $300 for groceries (& household supplies)/month? That seems impossible to me (but maybe food prices are just that much higher in CA).

  9. This reminds me once again if I want to have any saving ability I need to move somewhere where rent is more reasonable. Most of my friends are out of state and pay half of what I do for their homes while I pay twice what they do for rent at a crappy apartment. Bleh. Also I would love to deal with my money and make budgets and be all organized but if I look at all my expenses I will get severely depressed because we almost have more going out than we have coming in. sigh. i hope you can reach your goals with this.

  10. Oh totally forgot I absolutely love the new design and all that. You should definitely brag about it more. ;)

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  12. Taryn, CHASE closed my credit card account (that was paid off) for "inactivity". (It was an account I'd had 5+ years and had been paid off 6 mo. at the time of the closing. Which they did with NO warning to me AND they would NOT re-open the account even though I'd been a customer for 5+ years and was NEVER late with a payment and ALWAYS paid more than the minimum)

    And paying the card off each month doesn't show that you can handle credit responsibly. The idea is to show that you can not get yourself in over your head. Case in point, a friend new to credit got herself a card. Charged a little every month, paid it off right away. Credit score didn't budge. Charged something she COULD have paid off right away, paid it off over 3 months, credit score increased 50 points. Her financial advisor explained to her that creditors need to see that you can handle credit and that isn't shown by never carrying any debt.

    I'm just trying to save people from learning things the hard way.

  13. @ MsDarkster... that might be the "reality" of credit cards, but it's ridiculous if you ask me. It's a WRONG system if you're punished for paying off your credit card every month.

  14. first of all i love love love your new blog design!
    second of all i think this is a really good savings idea, and i'm probably going to steal it from you :)
    third of all, i might just figure out a way in my budget to pay you to make my blog look awesome...

  15. This is really inspirational - it is nice to know that even people who work in non-profit industries/are in school can save some money!

  16. This is such a great plan! Good for you for setting goals and figuring out a way to reach them.

  17. This is so great, both for you and for everyone reading it. I hate how talking money is so taboo but I think budgeting is super important and yet no one teaches you how to do it (well, at least not in my case).

    Thanks for sharing. This is seriously an inspiration for me. Do you have a specific end date in mind for that $10K?

  18. First of all, thanks for posting this budget worksheet. You did all the legwork for me and I totally filled it out for myself (roughly) before I even finished reading your post!

    Secondly... budgeting is HARD. Crikey.

  19. OK- I read your blog all the time, but haven't made a comment til now. First off, I love your saving idea. It gives me a little inspiration. It seems most of my friends are spenders & I'm the olny one that has "saving" on the brain. With that in mind....when your invited by other couples for a night out (dinner, movie, bar hopping...) how do you handle declining just 'cause you know it will be an expensive night?

  20. Hello blog valentine! Sorry we're going to be so late but I got the message post-Valentine's day and I was in Toronto until this morning, so now I'm back, and most definitely sending a belated little package your way soon :)

    Love the look of your blog! And I'll be behind you in the saving $10k - what a great goal to have. We have to save about that for our wedding this year, and next year we'll be doing (hopefully) something similar for an "emergency" fund - it's a good thing to have! You'll have to let me know what works :)

  21. First off, your blog looks FAB!

    Second, I've been doing the budget thing as well. We just bought two cars (used & relatively cheap, lol) and we may have a move coming up. I admire your being able to save $600 a month! We don't make nearly as much as you guys (yay military!) so we're lucky if we get $100 put aside each month. :P

  22. Budget looks good! Way to go getting one set up. Have you looked at Mint.com too? Friends use it and LOVE it for budgeting.

  23. I loathe the reality of the credit "system". I just hope that someone can read my experience and save themselves the heartache.

    Ashley, it's fabulous that you are planning like this. It's very inspirational. But that's one of the key reasons I love your blog. I find so much of what I read here so inspirational.

  24. Your design is simply amazing! I love love love it.

    I am huge on budgeting. I feel nothing but chaos and stress if I don't. Thanks for sharing how you do it, and I will probably be using that template you shared from now on!

  25. excellent post! thank you so much for sharing. i was so inspired. shout-outs to you over at my spot

  26. Very cool, love the new design too!
    Budgeting is so much easier said than done but having a solid tracking method and goals are huge steps towards all of it. Good luck on this month!

  27. You are inspiring me to make a budget. I'm about to get married, so it's probably time RJ and I sat down and planned out a budget when our accounts merge (or don't merge). We haven't figured out the next step quite yet.

    MsDarkstar, I have heard of credit cards being closed due to inactivity as well. I also read an article about credit ratings that I found extremely useful but cannot remember where I saw it. It basically talked about your debt to credit ratio (basically the percentage of debt compared to your credit limit) and how that affects your credit rating as well.

  28. This is great, Ash!

    If you ever feel discouraged know that I pay about double the amount you do for probably 1/2 the amount of space. California.... UGH!!!

  29. Sometimes I can't tear myself away from mint.com to crawl into bed. The charts are enthralling.

    I feel all bad ass about paying off my student loans but then I remember that I still owe a heck of a lot on our car... I just ignore it since the monthly payments and the interest rate are so low. Today we found out we need a new shock absorber and wheels so our mint graph will be tiny... but still fun to look at. :)

  30. PS: It's 99% cool and 1% freaky how many people comment on your blog. You must be a life coach guru to hundreds.

    Ashley's new vocation: guru.

  31. @Kayla Roma & MsDarkstar: debt to credit ratio~ I too read the same fact (don't remember where) but I do remember that your balance should never be more that 20% of your limit. Also, while paying off your cards over time is good, I believe paying them off at the end of every month keeps you safe from lingering too far behind. You may and any other should check out Dave Ramsey's Financial Peace University. You can get the links at my blog. He's awesome! Also, a book entitled God's Plan for your Finances. Even if you're not a super religious person, it's got amazing principles and has help us out trememdously.

  32. * Sorry for all those typos in my last post! Yikes!

  33. Wow that's awesome! I'm so impressed with you and your husband right now! It motivates me more to re-look at our budget so we can save more (or some)!

  34. Oh, and LOVE the new design! Those headers are awesome!

  35. That is great! Best of luck reaching 10K!
    I'm trying to save up for a downpayment on a house! Its tough but hopefully I can save up enough soon!:)

  36. You header is incredible. And this is all kinds of inspirational. I'm not in the position to be able to really save right now, but I'm bookmarking this post for when I am :)

  37. I love how honest you are. It isn't X amount in savings, X amount on groceries. As a reader, it is so helpful while trying to make my OWN budget, to see real, concrete numbers.

    And I just have to profess my UNDYING LOVE for your header and footer and OHMYGOD the rollovers. I'm in love :)

  38. It's crazy how inspiring you are, you know that right??
    TJ and I have recently decided that we NEED to sit down and figure out a budget. I used to handle our finances and had somewhat of a budget that was really working for us at the time but then my husband decided that he wanted to take control of the finances and well, he is NOT the most financially responsible person I know...'nuff said. ;)
    Anyway, thank you for posting this and reminding me yet again how we need to take control of our financial destiny asap.
    Also, thank you for always being so honest!

  39. Wow, thanks for doing this post. We've tried following our budget but it seems like we're always failing to stay within budget every month. It's driving me insane! One problem I have now is not knowing if I should put more towards our credit cards or put it towards savings. Mainly because we're new homeowners so I'm always worried if something breaks and we don't even really have that much in savings if something does break. Any advice? I'm jealous you're debt-free and I can't wait until that day comes!


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