Week 5 of the Total Money Makeover and Week 2 of Financial Peace University.
I just finished up my first month’s budget – a full four weeks adhering to the outline I set for myself. Dave says that it takes 90 days to really hammer out the budget, and he’s probably right. I had to readjust a couple things, like gas money (ran out, oops), and adding some money for a visit to my sister, a day of yard sales with my mom (only spent $20!), and money for “business expenses” relating to my paintings. Overall, I feel comfortable with how I did in my first month.
The biggest change to the budget was the fact that I had initially planned it from 8/23 to 9/26, but that was one week too long. I need two paychecks before the first of the month to make the budget work, otherwise rent will be paid for but I won’t be able to eat or pay any other bills.
Income for the period of 8/23-9/19 came from my full-time job, freelance income, and liquidating all savings beyond my $1,000 emergency fund. I also sold a few things on ebay. All told, I have $1635 to pay toward my car this month! I cannot wait to write that check.
FPU was better this week. Though it’s still just me and one other couple, we had more discussion as a group this week and I felt more comfortable. I did get a little teary talking about my divorce and how my life would have gone so much differently if I had known how to handle and communicate about money. But I wouldn’t change my life at all because I am happy where I am. And I will learn from my (immense, innumerable, inane) mistakes and be a better steward of my money in the future. I will also be better at relating with money with any future partner or spouse.
Men and women think of money differently. Dave says that women have a gland men don’t have… the security gland. And when they feel insecure about money, or work, or whatever, the gland goes crazy. And the gland is attached to their face, so they go like this:
And that’s why ladies need an emergency fund. Guys think the emergency fund is boring, but women need it so our faces don’t stick like that every time something happens.
Don’t let my face stick like that!
There are also generally two types of people in a relationship when it comes to money, budgets, decision making, planning, etc. The nerd and the free spirit. Guess which one I am, as soon as I tell you all about my spreadsheet. Hint: It’s a nerd.
There is also generally a spender and a saver. You can be a nerd spender or saver, or a free spirit spender or saver. I am definitely a nerd and still trying to figure out if I’m more of a saver or a spender. I think I’m a saver, though I am currently spending every extra cent to pay off debt. At least it’s not shoes.
The lesson also touched on raising your kids to be debt free. DR suggests putting children on commission, not allowance. This allows them to make the connection very early between work and money. If you just hand them money every time they ask for it, you’re not teaching them realistic things about money. No one in life is just going to hand them money. Kids under 5 can save up their cash in a large clear container, so they can see it grow. Kids from 5-12 can use cash envelopes, one for giving, one for saving, one for spending. They divide up their money in that order and then spend or save accordingly. Kids 13-15 can get a checking account and learn to write checks and balance their checkbook.
Identify your accountability partner: It’s pretty much this blog and my friend Kate on Facebook.
Share your budget with your accountability partner: I totally sent it to Kate on Monday! Winning.
This month I am budgeting for a haircut and some savings to save up for new tires in the next few months. I will also need new glasses soon. Hmm, perhaps I shouldn’t liquidate my whole savings account just yet. I’ve also decided to start investing $2,000 per year in a Roth IRA. Gotta start NOW!!
What I did in the past week
What I’ve done since we last checked in was start a new job! I got a side job working on the weekends. I also had seven paintings go up at the local farmstand to be sold, so I am hoping that works out and people really love paintings of chickens and flowers.