February
Determine Your Income and Fixed Expenses. We have a handle on this because of going through Dave Ramsey's Financial Peace University (twice). The ease of calculating your income will depend on a number of things including self-employment, method of payment, investments, etc. Fixed expenses are things that are recurring expenses. These are things like groceries, car loans, TV, groceries, insurances, taxes, subscriptions, loans, utilities. Job security is part of this section too.
Determine Your Variable Expenses. "We're going to brush away the mask of unconscious spending and see what's really happening in your life. Unconscious is the key word in that sentence. We so often spend money without thinking, and little purchases snowball into giant losses." (pg.45) In order to calculate these variable costs, you need to track every penny spent. Guessing doesn't work. Crunch the numbers. Variable expenses include the money spent at the corner store, the coffee shop, the "extras" at the grocery store and the money spent on just this and that. When that happens around here, we call it "nickel and dime-ing" ourselves to death (financial death).
Take a Fresh Look at Your Expenses. This is the beginning of creating our budgets. "Budgets, like everything in life, shouldn't be rigid. If they are they tend to be ignored." (pg 47). Regina and Russell suggest budgeting for a minimum o f 1-3 months, but a year is even better. J and I have found that if we do not budget EVERY SINGLE MONTH, we do not have a handle on our spending. Right now our spending is out of control; I know where every penny is going, but we are just spending (after the bills are paid) and not saving for anything. (Another factor to our spending is using cash. We have to use cash to keep control. Using our debit card is too easy.) Secondly, in this section, the authors talk about building an emergency fund. We are not there yet either - the reason - my dh and I are not on the same page.
"It's always better to understand the reality of your situation than to keep your head under the proverbial rock." (pg 50)
This month I got the most out of April's chapters as February was mostly review and confirmation of what we are already doing.
April
Harness Your Marketability. "(W)e get creative and look for hidden opportunities to make more money in your life. There is no telling where thinking outside the box about your talents may lead." As soon as I read this, I was reminded of an earlier conversation and brainstorm about selling at our local farmer's market. This has been brought up on a couple of occasions and never acted upon. On Monday, we will go get an registration form.
Working with Your Budget. I loved this quote because it is ALL ME! "Unless you find that tracking your formal budget gives you unbridled joy, you might want to set a reasonable amount of time for working with the budget you began to set up in February." (pg 84) I love working with our budget. I work on it (and other aspects of our finances) almost daily, at very least three times a week. I love crunching the numbers and tracking our spending. The authors talk about 5 common budgeting mistakes: forgetting expenses from the previous months (such as annual payments), setting unreachable goals, not working with your significant other, not looking on both sides of the equation (reducing expenses and boosting income) and having only half a plan. Lastly, cut expenses two ways - cut down daily discretionary spending (daily coffee shop latte) and look at the big items (paying the mortgage faster).
Banking Made Brighter. This week was boring to me, but I need to qualify that statement. This section just reconfirmed that we made the right decision to bank at a local bank. The branch knows us, and our kids, and our situation. They work with us where a bigger institution would not. For someone who might need to change banks, this section is very valuable. The authors talk about what to look for in a good bank - a good bank for you. The information was also United States based and much of it did not apply to me, a Canadian resident. However, the banking smart portion was interesting and applied to us. Things like having your cheque deposited automatically, arranging for saving to be transferred automatically, and having clients put payments directly to your account.
"The goal is to make your money work for you, rather than letting a lack of it rule your life." (pg 90)
Habits
Declutter. This I did quite a bit of this month. I got rid of a number of items from our home. Mostly trash.
Log your savings. I did not log our savings. I do know though that we have more in our savings account than we did at the beginning of the month for a variety of reasons. I hope it stays there, but work is lean this spring. The money in savings is for my kitchen renovation, provided we don't need it to make our monthly expenses.
Tools
Meditation. I did not to the breathing exercises in the book, but I did take time to just be - without extra noise. I think it helped my focus better on things.
Sleep. I did try to get more sleep this month too. I have made an evening routine and a plan to be in bed by 11PM. Very often it was midnight, but the last couple of night I have made it there by 11PM. I am still so tired. I think the baby is growing and taking more from me, and I've been forgetting my vitamins. All of those are factors in my energy as well. I am so glad to be getting more sleep though.
Next month (May) is about borrowing. Borrowing is something that we've decided to do very very sparingly. Having just been through a bankruptcy we do not have a lot of debit, and are choosing to stay away from more credit. By the looks of the section headings, this month is about reducing our debit load.
Striving to learn and live God's purposes,
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