Archive for the ‘Budgeting’ Category:
The wife’s busy with the kids this summer and doesn’t have much time to chime in to these discussions. Hopefully we will get back to it in a few months when they return to school.
Updates on previous blogs:
We are still busy at work with our basement project. We have had our share of financial conversations as we approach some of the higher ticket items in finishing this project: furniture, electronics (tv / surround sound), and various items needed to make the room liveable. The one problem with any home improvement project is that it tends to expand. Finishing the basement has now turned into possibly repainting the entire main floor, which then turned into buying some new furniture for our living room and moving the older stuff into the basement, etc. It can expand the budget considerably. I am the type that I get an idea and a budget in mind and it is very hard for me to divert from that. The thought of more expenditures causes panic attacks. Hope on the other hand would prefer just to get it all done even if it is a little higher than what was budgeted. That is what makes a marriage is finding a happy medium and ways to compromise. (I call it compromise, but she normally gets her way in the end).
I have gotten a few comments that I haven’t been on my usual rantings about the wife’s spending. Honestly, I can’t complain about anything lately. She has been doing a great job of seeking out bargains. Just this week she told me about the special “icee” deals at the Sonic restaurants. Her and the kids all got a treat for a total of like $3. Then when we went out for dinner it was buy one get one free at the local Asian place. Grand total was $11 for both of us. I can’t complain about that.
I guess I could rant about seeing another “build a bear” stuffed animal in the house. I think my daughter now has 42 of those things. Even if she did have a coupon for them, I mean seriously how many stuffed animals does a kid need. Okay and there was the quick Disney trip we surprised the kids with back in May. This has nothing to do with the wife, but jeeze it seems like you need to take out a mortgage to get into Disney for a couple of days.
Since the wife isn’t providing any material for me to write about, I will have to revert to back to personal finance stuff. Check back soon!
Okay, so did you know that this is officially “America Saves Week’? This sobering statistic is why official weeks like this are needed to promote financial literacy and savings:
- National Savings Needs: Most Americans do not have adequate savings to meet major emergencies, let alone accumulate enough savings for retirement. The typical American household has less than $100,000 in net wealth, including home equity and 401k accumulations, and only about $10,000 in net financial assets. Lower income families have much fewer resources.
To learn more about America Saves Week click on the link: www.americasavesweek.org
I get asked quite often about budgets. Most of the time the questions revolve around “How much should we budget for a certain area”. It’s a tough question to answer and I generally try to tip toe around it. Everyone is different in their spending habits so it is hard to come up with a generic budget that fits. That is one of the main reasons I created myVizer.com. Anytime someone asks how they compare to another planning client, I just refer them over to the website and let them see for themselves. (it shows your percentages vs. the average percentage for other users)
Recently though I stumbled upon an interesting article in Kiplingers magazine that gives folks a basic budget. The title of the article was “how to divvy up your paycheck”. Here is the breakdown:
- 30% Housing (mortgage/rent/insurance/prop tax)
- 15% Food (groceries/dining out)
- 10% debt
- 10% utilities/household
- 10% transportation (loan, gas, maintenance, auto ins)
- 10% savings
- 5% clothing
- 5% entertainment
- 5% miscellaneous
It’s not a bad benchmark to follow. It’s not perfect, but not bad.
Out of curiosity, I will have to get the wife to see how she thinks we compare to those numbers!
For those following along with the basement finishing project you will know that this has been a painful experience for me. Both in terms of my back and my wallet. The Amex bill arrived and I knew that it was going to be painful. I need time to digest these things. All the items we had purchased in December including the hard wood floors were on this months statement. Toss in the holidays and this one really hurt. So mistakenly I am thinking we are going to slow down the basement project so that I can pay off what we have done so far. Well the wife had a different idea. Hope had decided that getting the kids play room and a guest room completed was priority number one. So I started looking for ways to pinch pennies which brings me to this weeks blog post about Ikea.
You see the original plan was a nice wall of built-in shelving in the kids room. Well after all that was spent on the wood floors there was no way I was going to shell out the cash for custom built shelves. I turned Hope loose on a project to slim down the cost. She went online and put together a wall of shelving units from Pottery Barn and presented me with a configuration that was about a 1/3rd less than the custom. Being my miserly self, I said we still needed to cut that in half. Having just watched a home show on TV, I mentioned to her to try Ikea.
I have a real love / hate relationship with the Ikea store. Back in 95, Hope and I spent half a year in Sweden (the birthplace for Ikea stores) and came to enjoy strolling through the store thinking how cool it would be to outfit our hip urban home with all there cool furniture. Flash forward about 12 years and Ikea opens a store here in Atlanta. If you have never been to an Ikea store it is a totally different retail experience. They are like an upscale WalMart for home furnishings. Maybe that isn’t the best description but their furnishings are low in price and very appealing. Everything is very efficient, the trick is that you have to assemble everything yourself. So the part I like about Ikea is that you can get really decent home goods at very affordable prices. The part that drives me crazy is the fact that you need half a day to get through the store! You see the store is layed out like a maze and you must stroll through all the “show” rooms and departments and see everything, almost like a living catalog. Along the way you write down the isle number where a product is located and after you spend 2 days strolling through their showroom you are dumped out into the warehouse area. From here you find your boxes, load them on your cart and proceed to checkout.
It’s a unique experience that everyone should try, just make sure you have several hours to kill.
So in the end I purchased 3 different shelving units that took me about 3 hours to assemble, but cost less than 1/3rd what the original built-in’s would have cost me. So while I hated spending the money I took some comfort in knowing we created a good looking wall of shelves for quite a bit less than we planned.
I sit here staring at my kids christmas gifts piled up by the stairway just waiting to be taken to their rooms. Like most folks, Hope and I put a limit on this years gift giving. Honestly, it was more enjoyable. I think the pressure of buying for everyone takes a bit of the fun out of the season. This year we put a limit on how much we would spend for the kids and even got the grandparents to pare down the number of gifts they bought as well. For the adults we either drew a name and only bought for that person (on one side of the family) or decided to completely eliminate adult gifts (the other side of the family).
I for one have always felt that the season is more for kids. In fact I told Hope and the kids several weeks ago that instead of them buying me anything for Christmas that we would instead sponsor 2 kids through the YMCA angel program. So two weeks ago we headed to WalMart. It was girls against the boys and with a $100 budget for each of our “angel” kids we had a little competition to see who could get the most stuff. While Hope and my daughter got the most stuff, I think my son and I scored by getting our kid a bike! It was fun to be shopping for a child we didn’t even know. Somehow it put the spirit of the season back into the hectic Holidays.
Somehow I don’t think our pared down holiday was much different from others. It seems that everyone we know has been impacted in one way or another from this recession. Getting the spending inline with reality and explaining to the kids that Santa isn’t immune to the recession has turned out to be a good thing.
The communication has been a bit slow, I know – lack of anything to post lately along with the holidays. So today I wanted to give a quick update on the basement progress. For those following along I mentioned last month that I was finishing our basement. Although it has very little to do with personal finance, I am sharing the progress just for your enjoyment. So the story is that Hope has been on me for 5 years to get the basement finished. I of course didn’t want to spend the money. But as with everything she finally won the battle.
My thoughts were that as long as I was agreeing to finish the basement I would at least try to save a few dollars along the way. Here is a quick summary of where we are at:
- had the HVAC folks run the ventilation and motorized damper $2200
- carpentry to frame out the vents (tray ceilings) $1000
- insulate walls and ceilings $600
- plumb the water lines for bath / wetbar $1100
- electrical $1500
- sheetrock $3300
- primer / ceiling paint $250
- floors $5000 (ouch!)
So around $15k right now invested and that will at least give us a finished guest room and playroom. My entertainment room will be a bit longer to complete. I was looking for areas that I could do myself to save some money, but after second thought I decided that plumbing and electrical needed to be done by pros that could knock it out in a couple of days. If I tried to tackle it I would probably still be working on it. I have also tried hanging and finishing sheetrock before, but I was smart enough this time to sub it out. That takes talent and a strong back. I did install the insulation which is another nasty job. That fiberglass is challenging stuff to work with. I went ahead and insulated all the interior walls and ceilings to cut down on noise. That is one of my biggest pet peeves with home construction is that sound carries throughout all the interior rooms because there is no insulation inside the walls.
I knew the floors were going to be one of the costliest items. I did my research though and actually saved about $1000 by comparison shopping on the web. I was just about to order through one of the major wood flooring stores on the web and at the last minute found a store in Alpharetta called SimpleFloors that had a real nice wide plank hand scraped wood floor that looked great. I opted to do the install myself, which I am now having second thoughts about. It is tedious work installing glue down wood floors. It is after 10pm on Monday and I just finished the first room. I would estimate it took me at least 8 hours to complete. Let’s see if my math is correct that room was about 200 sq foot. I only have 1100 sq feet to go! At this rate I should finish sometime around New Years. So much for having the basement finished before the holidays!
If you have to spend money, you might as well get a deal. At least that is my line of thinking. So for the benefit of fellow readers I wanted to share a couple of websites that I have used, one for purchasing and one for low price events.
The first is www.fatwallet.com , this website alerts you to various deals but also offers online coupon codes for internet purchases. Case in point, when I was establishing this blog site with my host I searched fatwallet and found a promotional code for discount. Just like that I saved $15 for Hosting services. They also have a pretty neat selection of “current deals” that users submit.
The second is for all those in metro Atlanta: http://blogs.ajc.com/atlanta-bargain-hunter/ , this is a blog from the Atlanta Journal and details everything from personal finance to cheap entertainment. It’s a good reference to use for anyone looking to save money on entertainment in the ATL.
If there are any websites that you commonly use, submit a reply and I will post them for everyone to use.
MISER TIP: if you have to spend the money, do a little homework and find the bargain!
While we are on the topic of things I don’t understand, let’s go ahead and toss out Black Friday. This is another difference in males and females, in most cases. We just came from a family Thanksgiving dinner where the ladies were all talking about their annual ritual of getting together for a day of shopping on Friday. I don’t understand it and it makes me nervous as I fear for the safety of my Amex card.
What is it that drives the female population to get up at 5am and shop with a gazillion other people? Personally, if I know that I need to buy something I try to plan it when the least amount of people are going to be out. It’s crazy. As we were driving back this evening there were people in tents camped outside the Best Buy! Maybe it’s the thrill of the hunt or something, but knowing that it is supposed to dip into the 30’s this evening I can’t imagine how those folks are having fun.
So I guess that as Hope leaves tomorrow at 5am to join other lunatics fighting for a parking space, I will cross my fingers that she doesn’t get carried away with shoppers excitement.
We attended a wedding out of town over the weekend and as we were sitting on the airplane Hope happened to point out the differences in our reading material. She of course had Us Weekly and InStyle, I on the otherhand had Kiplingers Personal Finance and Money Magazine. It got me thinking that we were probably not that abnormal in that most males and females have wildly different tastes in what they read for entertainment.
Hope is a self professed magazine addict. I have fought this battle many times but ultimately just bite my lip as a couple of new gossipy women’s magazines appear on the table each week (I don’t even want to think about how much money is wasted on these!). I really don’t understand the appeal, all of the weekly magazines cover the same celebrity stories and to me seem like the same magazine with slightly different name. Seriously, if Brad Pitt is on the cover of one of them then he is on the cover of all of them. It’s the same story and for the most part the same pictures! Big waste of money if you ask me. But those publishers know what sells. If you look at the checkout lanes at the grocery stores, what type of magazines do you see? Certainly not Kiplingers or Car&Driver.
So the next time your are at a friends house, check out the magazine selection. I’ll bet that we aren’t that different.
In case you were wondering, no I don’t pay for my magazines. Benefit of the trade as I probably get 8 different monthly magazines covering personal finance and investing sent to me free. I really enjoy reading this stuff even for entertainment, besides I would look funny reading Us Weekly.
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