Sunday, August 26, 2007

What is a Crisis Plan?

A “crisis plan” is a misleading name. It is not something you would use if your car broke down. That is what your emergency fund is for. I guess it should be called a “crisis aversion plan”. If you know that an event is likely to happen in the near future you would want to put one of these plans into action.

What kind of “events”? Really anything you are not already prepared for. This might include a possible lay off at work, the imminent death of a loved one, or hmmm I don’t know, a surprise pregnancy.

Who needs one? If you already have 3-8 months of your salary saved up then you are in pretty good shape. However, many people are just beginning to repay debt and may have as little as $500-$1000. This is great for an emergency fund but when big things are about to happen it isn’t going to cut it.

How do you implement a plan? This depends on what you are going through. If there is a close estimate of how much money you will need then it is pretty simple. Take the amount of money you need and divide it by the approximate number of months you have to save it. This will give you a rough estimate of how much money you are going to need to save each month. If you can’t possibly save that much it is time to start selling things you don’t use, getting a second job, or cutting back on extra services you may subscribe to. If you have no clue how much money you will need start saving as much as possible. Sounds a little simplistic but you will need it in the long run.

What should be stopped? No more chunks of cash to those credit cards!! It may seem like the best idea is to pay off the cards as quickly as you can instead of saving. This is a bad idea because when the layoff/death/birth happens you will not have any money and will need to use credit to pay for it all. Another no no- any unnecessary spending. Any money that you can put toward savings should go to savings- nothing else. If you are about to have a serious financial situation on your hands… sorry, but you don’t need a manicure. One way I am helping myself do this is by thinking of every dollar spent on something else as something that could have gone to the baby. For example, I got a survey in my email today, I was really tired and didn’t want to do it, but it was paying $2 and I thought, “hey that could buy a couple bottles or a pacifier” and I took the survey. It can be tough but it helps.

What if it turns out that you don’t need the money? Simple! Use it to pay down your debt!!

I hope none of you ever needs one of these plans. I sure never thought I would, but if you do here ya go! If you have any other tips or hints to add please share with us!!

**Curious about why I have a crisis plan? Read the Big News here.

Thursday, August 23, 2007

So sorry!!!!

This was my first week of classes and aparently morning sickness is going to be hitting me at night. Honestly that is fine with me I can be at home relaxing, but unfortunately for this blog it is not so good!!

I am going to really try and get some good posts up this weekend. I am so sorry to my faithful readers. I feel like this blog was just starting to take off and now I can't do it as often as I was. I appreciate all of those who are still reading!!!

If you want to make sure you get all the updates without having to check back as often please subscribe. I think they will only mail you when I post a new one.

Thanks to everyone!!!!!

Saturday, August 18, 2007


Wow, I really need to look at a calendar before I work out my budget from now on. I totally forgot that there were essentially 5 weeks in this month. I was off on daycare, gas, and my grocery budget. I am actually having to tap into the emergency fund this month which sucks.

Okay, so on to groceries. I have a cold or bad allergies today so I didn't keep up with my store brand savings this week... sorry! My grand total was just below $124 Here is how it broke down.

94.41 was all grocery
29.49 was other expenses. This week it included cold medicine and upholstery cleaner because one of my little darlings spilled milk in my car and neglected to tell me until I got in one morning and almost threw up from the smell.

If nothing else, I guess I can say that I did well on "other" expenses this week. I will be back to post more later!

Friday, August 17, 2007

The "BIG" News...

Well, the big news is, I am stopping all but my very minimum debt payment efforts.

I guess we are in what you would call “crisis” mode.

We have 9 months to save for a baby and all the necessary accessories. Hmmm, maybe now it is becoming a little clearer why I have not been as active on Pic of Wealth lately? Yes, we got the surprising news at the end of July. While it is quite unexpected, we are very excited and I am DETERMINED not to go into debt having or raising another child.

So, what is the plan now? Believe it or not, I am still following Dave Ramsey’s plan. I am just doing so in crisis mode, which means that instead of paying off debt in a big hurry I will be loading up the emergency fund to the maximum possible. Another thing I am doing is saving about $50 a month for other uncommon expenses, like car maintenance, and in this case, maternity clothes and baby furniture.

We already have many of the basics. Our nearly 3 year old daughter still sleeps in her crib, my parents have a twin size bed they want to get rid of, we have a stroller, changing table, bouncer, highchair and swing. As long as it isn’t a boy we have plenty of clothes too. Of course with two girls already my husband is really hoping for a boy. Personally, it doesn’t matter to me. It is already decided anyway, and we should know around Christmas… ugh, Christmas… that ought to be a doozy now!!!

So, now you know the big news. I will be getting much bigger in the next few months. My posts may become a little more tailored to saving for the time being, but I am still paying “slightly” more than the minimums on my credit cards and I am not going to change the amount as the minimums go down. I just won’t be paying off the huge chunks anymore. My tax return which I had planned on really paying it down with will be going straight into savings as well…. Hmmm I should probably start preparing hubby for that.

Monday, August 13, 2007

Carnival of Debt Reduction

Carnival of Debt Reduction should be up at NCN this week. Check it out. I should have a post on there somewhere!!

Edited to say: Wow, I actually made the number two spot!! Cool.. Also, check out the number one post. It looks like a really great idea!!

Sunday, August 12, 2007

An Extra $6 Lost!

Yesterday I posted about my $6.90 savings at the grocery store from buying store brands. Well, today I realized that I had $6 in coupons on my refridgerator. I have no idea why I didn't think about it when my husband said we were out of dog food. I forgot it the last time also. I had one for pull-ups too, which I almost always have because most diapers give you a coupon inside. I am so upset with myself for missing out on yet another opportunity to save some cash!! Oh, well, it isn't like I "lost" the six bucks, I can always use it later.... if I remember!!

Saturday, August 11, 2007

Shampoo- The budget wrecker!

Okay, so it isn't really THAT bad, but here is what happened. Last week, in an effort to save money, I bought some store brand shampoo. It was right next to the bottle I usually buy and said "compare to brand x" Now, I use this shampoo and so do both of my daughters. We all have long hair. The first time I washed my hair with the stuff I rinsed it out and couldn't even pull my fingers through it (note I said pull not run) My hair was so tangled it was breaking off. It was really bad. Now think of trying to get two little girls to wash their hair with something that is going to make combing it out impossible. Not happening- So this week we shared the shampoo back and forth from the other bathroom and my husband used the cheap stuff. So this week I bought some more. It was a bit more expensive, but it will work. However I am not too happy that I wasted money trying to get a deal and ended up spending more in the long run. Here is how it breaks down mathematically.... I bought 2 dollar shampoo instead of 4 dollar shampoo. Then I had to go back and buy 4 dollar shampoo. So in trying to save two bucks, I actually wasted two bucks..... not a lot, but it adds up. BONUS: the new shampoo came with two bottles of body wash (samples).

The moral of this story is- don't buy a big bottle of anything you haven't tried even if it is a little cheaper.

Grocery Update- My Budget is inadequate!

My total receipt from the store this week was:

$125.93..... eeek! How much of that was groceries.... not much.

I broke it down like this:

$71.52 was honest too goodness grocery expenditures.
$54.41 was stuff we needed but had not budgeted for at ALL

So what did the 54 consist of? dog food, shampoo, magazines and pull ups for the little one.

I am beginning to realize my budget needs a serious overhaul. I may have to limit my debt payment a bit more so we can afford to eat. Well, not really eat, but obviously shampoo is a necessity (I will go into greater detail with that in a seperate post. Of course the magazines were 9 dollars.... ouch. I thought I was going to get a discount on them but apparently not as much as I thought.

Now, last week I told you I was going to add up the total I got for buying store brand vs. name brand. My total this week was $6.45. I could not believe that!! It would be higher but I bought only two cans of veggies to try out. Next week I will buy more if we like them. The true total is $6.90 because if I consider the extra tax I would have paid on the savings it brings it to an extra 45 cents. Not too shabby in my opinion.

So, the grocery experiment really is going close to what I had planned, the problem is that there are extra expenses that need to be budgeted for. So even though I am spending more than I planned, I am also learning a lot about myself and my finances. I will be posting soon what my action plan will be to deal with this and about the shampoo problem....

Monday, August 6, 2007

10 Ways I’m Saving Myself- One Piece at a Time

I wanted to point out some ways that I have changed my habits and actually saved myself money. Hopefully this will motivate me to continue and be a list you can refer to so you can see where you may be able to cut back in your own life.
  • I said NO to the gym. I have a ton of workout tapes and pieces of equipment at my house. I made a deal with myself that if I actually started a routine and stuck with it for a year I would allow myself to re-enlist at the gym. Well, I have exercised off an on, but the fact that I have trouble finding time to work out tells me I would not go to the gym on a regular basis either. And, when I do work out, I am finally using all that “stuff” I bought.

    PS: if you don’t have a bunch of workout stuff, Denise Austin has a daily workout program on Lifetime TV. Free- if you already subscribe to cable.

  • I got a library card. I am the first one to praise the Cash4Books site for their generous offers to buy my old books, but just think of how much I could have saved if I had checked those books out instead of buying them. Now, I go to the library and check them out. I recently bought a real dud for $15 because the library didn’t have it…. I guess there was a reason for that, lol.

  • I buy generic when possible. I have found that most store brands are just as good as the brand name. I have also seen a few cases where the products are manufactured by the same company. This really only saves me a few cents per product but hey, that adds up!

  • I cut up my credit cards. Finally! Every last one. For a long time I kept them around “just in case”. I thought I was keeping myself from stressing out about emergencies. However, since I got rid of them, I am more at peace because I am not scared that I will use them.

  • I rebuilt my emergency fund. Now I have a backup in place of my credit cards. Having the actual cash is MUCH more relaxing than the though of relying on plastic.

  • I take my lunch to work. I also bring my own sodas/water and keep them in my mini-fridge so I don’t have to spend extra money in vending machines.

  • I give myself a budget. A lot of people hate budgets, but how can you make it through the month or the next two weeks if you don’t at least determine how much you have to spend on gasoline? I am not one of those people who budget for every little thing, but some things are really important. I used to have a budget category called “stupid junk I probably don’t need” I would put $50 in it just so I had some “fun” money. I am trying not to do this now in order to really get my debt paid off, but it just goes to show that you don’t have to have a strict or traditional budget to make it work.

  • I assess wants vs. needs. When you are trying to pay off debt as quickly as possible you have to get rid of unnecessary spending. I have to remind myself that right now what I really WANT is to be debt free. Believe it or not, you can actually buy that (by paying the mess off). In order to get my major want right now, I really have to curb other spending. I got a Nintendo Wii as a gift and I really WANT some more games, but I can’t afford that right now. However sometimes I have to convince myself that things like groceries are needs and I can’t put that extra money toward my debt this month.

  • I continue to educate myself. I am reading other blogs on finance and reading books that others say have helped them. It doesn’t seem like an important step, but it really is. If you are here you probably already know that. The biggest thing I have learned is there is not a magic pill or quick and easy step. Getting out of debt and building wealth are tough work. In the age of broadband connections and 24 hour stores we are used to getting things quickly. Wealth comes slowly.

  • I blog about it. Duh, right? But, it is helping me. I write (or type) out my plans and it helps me stick to them. I read about what others are doing and it motivates me. If you don’t want to start a blog, at least start a journal.

Wow! I actually made it to ten. Hopefully something here will motivate you in your own goals. If nothing else, just remember there are others out there going through the same thing!! I’m with ya!

Sunday, August 5, 2007

Grocery Update- A good week?

Well, this week's grand total $80 and some change. Not bad considering last week's total. Also, there were a few purchases that were NOT groceries but we needed like shampoo, etc. That should have really come out of my envelope budget but that hasn't really gotten off the ground yet. I bought a lot of store brand, in fact I bought everything store brand that I could. Next week I plan to add up all of the small savings from buying that way and see exactly how much it adds up to.

If nothing else, I am finding out this month that my budget is a little off. We just cannot feed our family on the amount that I usually budget. At the same time, I also realize that we spend way to much when we go as a family, without a plan, or when we are tired or hungry. It was really hard to get out of the house by myself this weekend, but I figure it saved us AT LEAST $50. So far here is an estimated rundown of what we have spent in my little experiment:

Trial Run- $50
First real week (but out of husband's budget not mine, with entire family)- $200
Second week ( by MYSELF) -$80

Still Here!!

I am very sorry I have not updated in a while. We have been having some issues with our router. I will have a new article for you tomorrow. Also, look for some BIG news coming in the next couple weeks!!!!!!!!!!!

Wednesday, August 1, 2007

End Of July Report

End of July report

This month again, did not use my credit cards!!!!! YEA! Now I can’t because I cut them all up. I had to dip into the emergency fund just a little due to lack of planning (not emergencies) so it is at about $650 right now.

In the end of June report I talked about setting up a notebook that I was going to try out and see how it worked. It actually worked very very well. I also liked the fact that I didn’t have to load up MS Money just to check my balances. Here is a quick rundown of how I did it:

I used an entire sheet in my notebook and separated it into several spending categories. Groceries, gas, daycare, lunch, etc. I left space under each heading maybe 10 lines or so. Under the heading I wrote the amount I had to spend in that category. Every time I spent from one category I would subtract the amount. Normally I would wait a few days until I had 4 or 5 receipts. As I got toward the end of the month the only categories that were left were daycare and gas. So I was able to stop tracking because I remembered what was in each. Daycare is really easy because it is always the same and I have the exact amount allocated to it.

I really liked this system and don’t know why I never thought of it before. For me it is easier than the MS Money budget. I am going to keep it from month to month so I have the same categories each month. Another thing I did was write down all the bills I pay each month that do not change in price. I wrote them all and added up the total cost, so I don’t have to do that every month. I am also keeping it in the notebook.

Things to do this month. Paid Twice had a really good idea about putting money toward your debt all month AS you get it. I am going to try that. I am considering doing several things to pay toward my debt. I have some ETF’s that are not tied to any retirement account so I think I may cash those in even though it is not the greatest time to be doing that. I wish I had done that about a week ago! There are also some things I could sell around the house. Our newspaper offers free ads for any items that are less than $100. I am continuing to take online surveys, but haven’t been mystery shopping in a while. I may have to start back though.