Breaking Even

How Poor Are You? Part 1

About four years ago, I did some volunteer work at a local food pantry. My job was interviewing prospective users of the pantry which included an in-depth discussion of their budget and finances. This part of the interview process was to help families find additional resources and programs like WIC or heating oil assistance if they weren't aware of them.

I remember one day having to look up the federal poverty rate and having an epiphany that I was below it. That's right, I could have not only been using the food pantry I volunteered at but I could have also taken advantage of some of these programs I had been talking to people about. Hmph.

Fast-forward to now. I'm making double what I was living on back then at my day job (and this is not even including income I make with my business). While I am no longer a poor college student working part-time, I don't exactly feel like I'm rolling in it.

I thought it would be interesting to look up some of the programs I used to refer people to and see who would qualify for them now. Today, I'll tackle food and health programs and the following post I'll talk housing.

Food Stamps
This is a little formulaic but there are some basic requirements, like being a US citizen and having less than $2000 in assets. (Note: Your house does not count as an asset, but your car may depending on how you use it.) Here is a handy little online calculator to see if you qualify. I personally have too much in savings to qualify.

Medicaid
For single people, annual income to qualify for Medicaid is roughly $8500, total resources being $13,800. Pregnant women and children, however, you make of this 200% above the federal poverty line. There are, of course, exceptions.

Dental/Medical Clinics
Clinics seem to vary state to state compared to other programs. When I called my local dental clinic, I could not get any assistance because an income of $22,000 a year is making "way too much money" to qualify.There is, however, a great directory of health clinics that are searchable online.

WIC
WIC is a USDA program where new mothers and their children (up to five years old) qualify for not only breast-feeding support and immunization services but also can purchase "nutritious" foods such as formula, milk, and cereal. Income guidelines are 185% above the federal poverty level, which means a household of one would make around $19,200 a year.

Free or reduced price meals at schools
School lunch programs offer discounts in the way of reduced price meals (185% above the federal poverty line or $19,200) and free meals (130% above the federal poverty line or $13,500).

Stay tuned for Part Two of this series, and if you want more possibilities:
See other programs from the Department of Health and Human Services...

How Do I Eat On $100 A Month?

Sally's Niece, a fellow blogger and frequent commenter, asked how I eat on $100 a month. My sister asked me the same question over the phone a couple days later. I figure if they were asking, you're probably wondering too. Here are a few things I've learned the last couple of years:

1) I stay on the perimeter of the grocery store. It's where all the stuff you really need is. Only when I get rice, pasta, or canned veggies do go in the aisles. Why do I avoid the aisles as a general rule? Things like cereal and prepackaged foods really add up. I only splurge on that stuff when I really care, as with my occasional purchase of Odwalla Superfood juice.

2) Despite my small space, I buy some things in bulk. Bags of onions, potatoes, lentils, brown rice, flour, and other staples I use all the time helps me save money.

3) Use some "filler" ingredients to stretch out the meal. Cutting up an onion or mixing some lentils into a dish makes it stretch a serving or two further without sacrificing taste or nutrition. (Fillers are bought in bulk... coincidence? Definitely not.)

4) I have one type of meat a week. This week, I'll roast a chicken. Next week, it may be fake crab meat. I just check out what's on sale and get a source of protein, usually one that I'll use for multiple meals. Check out what's the weekly bargain by examining the price per pound. Plus, eating less meat is good for the planet, folks!

5) My friends and I take turns cooking for each other. This way, we can make a regular sized meal and not eat it for five days straight. Plus it's fun to eat with people!

6) My rule: Unit price of $2.99 or less. Next time you're in the grocery store, look at onions. Do you really think that in a stirfry, the $1.29/pound onions will be all that different then the $2.69/pound onions? Probably not. In every aisle, you have these kind of choices. Think store brand and items higher and lower on shelves (not at eye level). It's amazing how being mindful can save you a lot of money.

7) I eat when I'm hungry. Some nights, I have a bowl of soup and some nights a three course meal. My host parents in France often had an orange for dinner on Saturdays when I went out. They usually had a big lunch and just weren't hungry. I used to think it was a little sad but then I realized they were just being practical and thrifty.

8) I make it from scratch. Nothing kills a craving like making yourself cook it. I mean, the $3 baguette is great but I can make it for a third of the price at home, even if it isn't quite as good. This has the added benefit of making me appreciate the baguette when I do buy it.

9) I splurge when it counts. Fresh basil with my tomato and mozzerella salad? Absolutely! Some things are worth a splurge for me and since it is a treat, I enjoy it when I do have it.

10) I use every last bit of food. From the hunk of cheese to a small amount of tofu, I find some way to use food items before they go bad. Because throwing away food is not only wasteful of money but of resources.

So that's how I do it. Nothing fancy but it works for me!

Other reading on the subject:

Tips and Tricks To Eat Healthy On A Budget (Wisebread)
Don't Waste Your Food (Being Frugal)
What The Great Depression Can Teach Us About Food And Frugality (Cheap Healthy Good)

That's Expensive, Huh?

Why Do Cashiers Comment On My Purchases?

I'll preface my story by saying that strangers talk to me all the time. I get why: I seem friendly and wholesome, I look harmless, and I have a vaguely familiar face that makes me look like someone you may know. Am I so-and-so's old college roommate? Do I know your granddaughter? I've heard it all.

People randomly talking to me is not something new, though recently I've noticed something interesting in what strangers are saying to me.

The other day, I was buying my usual Odwalla Superfood juice which I sometimes drink for breakfast.

"Wow, that juice is expensive huh?" the cashier said.

At multiple grocery stores, I've had cashiers comment on my expensive purchases of, say, organic produce or in this case slightly overpriced spinach/fruit juice.

Now if I was a smoker, would the person cashing me out have said, "Wow, this carton is expensive huh?" Of course not. Yet for some reason, when I buy something healthy, I get comments.

I know we are in hard economic times and my $6 gallon of juice may seem frivolous but why? My food and drink are an investment in my health. Why would someone, especially a stranger, share with me that they think it's expensive? 

Has this ever happened to you? And if so, have you noticed others stating opinions your purchases more lately?

On a related note, I found a recipe to make Odwalla juice at home for a third of the price. Hmph

Three Months Later: My Finalized Budget

Part II: Money On The Side

When other people write about stuff like this, sometimes my eyes glaze over but I realize that occasionally as a PF blogger, you have to look at your budget.

I’ve famously said that you should give yourself a few months to get into your budget, not as a way to procrastinate but as a way to be realistic and fair to yourself.

Now I moved about three months ago into my new place which means of course a new budget. While I’ve worked hard to keep costs low, living on your own is inherently more expensive. So it’s been a balance for me between keeping costs low and stepping up work outside of my 8 to 5 weekday job.

The biggest change to my situation is I now have about 50% more additional income coming in. How am I managing that? At first, not very well but now much better. My gigs:

1) I am regularly tutoring a woman in French. Her husband got her French lessons with me as a Christmas present and every Saturday, I go over to their house and talk to this woman en francais. The people are really nice and I’m actually pretty good at it! Her goal: being able to get by in Montreal, which is a totally doable.

2) My adult ed class is going again. This means one late night of work a week but since it’s only eight weeks, it’ll be manageable. Plus since it is also a French class, I get to use the prep I do for tutoring twice. (Of course, we aren’t going nearly as fast as I am with the one on one woman but that’s to be expected.)

3) I have stepped up my internet marketing work. I love helping small businesses understand the web more and come up with ways to use it to their advantage. And there seems to be more and more work available, which is just fine with me.

4) I am selling internet advertising at my regular job on commission. We have advertising on our newspaper site and despite this economy, people seem to be buying, even if it is in smaller quantities then before. I enjoy those extra dollars in my regular paycheck!

At the moment, most of this extra money is going into savings but I have  used it for two splurges: I can now afford 1) a monthly massage and 2) therapy (been a rough couple of years folks!). I feel fortunate that I can pay for these things now and put some money away for the future.

Looking for some fun side hustles? J at Budgets Are Sexy has quite a list if you are looking for inspiration.

Related reading
My Finalized Budget: Part I...
Saving Money When You Can't Stock Up
New Life, New Budget

Three Months Later: My Finalized Budget

Part I: What I Cut

When other people write about stuff like this, to be honest my eyes glaze over. It's your budget, why do I care? I think. But I realize that occasionally as bloggers with a take on personal finance, we have to look at our budgets. It's a way of keeping ourselves honest.

I’ve famously said that you should give yourself a few months to get into your budget, not as a way to procrastinate but as a way to be realistic and fair to yourself.

Now I moved about three months ago into my new place which meant, among other things, a new budget. While I’ve worked hard to keep costs low, living on your own is inherently more expensive. So it’s been a balance for me between keeping costs low and stepping up work outside of my 8 to 5 weekday job. Part One of this (today) is about my cuts. Part Two will be about stepping up my extra curricular jobs (this will run Thursday, since tomorrow is Too Cute Tuesday and Wednesday is my Writer's Series).

New Budget (Final Draft—Three Months In The Making)

Needs (First Draft Budget: $790, Now: $735)
$500 rent (includes heat, gas for stove, and electricity)
$50 gas for car
$100 food
$55 car and renters insurance
$30 car repairs
_____
50% of my primary income

Wants (First Draft Budget: $453, Now $402)
$55 cell phone
$35 internet
$50 my dog Sadie
$100 gifts
$50 clothes/personal care
$37 Y membership
$75 entertainment
_____
29% of my primary income

21% of primary income into retirement and savings

So a few dollars saved a month. Big deal right? Well folks every little bit helps!

How I cut down on my needs:

I have a new commuting buddy. I’ve cut down on fuel costs by giving someone a ride into Ellsworth everyday. My commute is now mostly paid for with the gas money she gives me plus she regales me with interesting stories of her life. (G's a hoot!) I am still keeping a flyer up at the laundromat though because I could fit another person in my car easily (and in case commute buddy doesn’t stick around the area).

I’ve cut way down on laundry. Since when does it cost $2 to wash a load of clothes? I’ve went from two loads of laundry a week to two loads a month. I have a lot of clothes so this development just means everything in my wardrobe gets into the rotation (excluding ball gowns, of course). To get through, I sometimes do a little handwashing once a week. And once a month, I lug my clothes to a friend’s house and use their washer. So I took laundry right out of my budget!

I previously renegotiated my car insurance and got a further discount by paying for the whole year ahead. Glad I took the time to do that last month because an extra $15 is still an extra $15, right?

How I cut down on my wants:

I watch my cell phone useage like a hawk. Initially, I fell into that cell phone trap where I used too many minutes the first month and got a huge bill. Ouch, but lesson learned. Now I monitor my use on my carrier’s website and stay within my monthly minutes.

I am putting aside less money for my dog. Sadie is actually doing really well despite the fact she’ll turn 15 this year. I have some friends who are really great at helping me out with her care, meaning I don’t have to pay someone to let her out at night when I have to work late. These same friends also used to be vet techs and/or also have dogs themselves so I can talk to them about issues she’s having rather then hauling her into the vet when she has a little something wrong.

Socializing is now done at friends’ houses or at the gym. Not a lot of nights out for drinks or seeing the newest movies for me but good company and a chance to leave my little house is fine with me.

The biggest change to my situation, however, is I now have about 50% more additional income coming in. How am I managing that? That's for Thursday my friends!

Meanwhile have you been fine tuning your budget lately?

Related posts:
How To Save Money When You Can't Stock Up
New Life, New Budget (First Budget Draft)

Fashion Friday: Finding Workable Vintage

I saw a great article this week on the DC Goodwill Fashion blog about wearing vintage at work. Basically the moral is don't overdo it or you'll look like you're in costume or like you haven't bought new clothes in thirty years. (Aside: DC Goodwill is a fantastic blog if you like style and fashion.)

I buy vintage all the time. I would say roughly half of my wardrobe has at one time been owned by someone else, which I'm fine with! I like to think I'm giving the clothing a second home and I think the clothes are grateful.

Of course, when you go in Goodwill or even a consignment store, the racks and racks of options can seem overwhelming to look through. How do you know you have a good find? A few tips:

Those numbers on the tags don't mean much. You may be a few sizes bigger then you are in real life if you travel back in time. You just need to be ok with this. Cut out the little number when you get home if it makes your feel better. And remember, not all cases does something not fitting mean you are ginourmous blob: if that size large sweater looks a little fluffy and like it might fit your favorite ten year old, it was probably accidentally shrunk in the wash. If things look like they may fit, try them on!

Consider the era. I love the Jackie O look but the shoulders and waists of the sixties are too nipped in for me to pull off comfortably. The seventies more suit my straighter figure. My fifties-inspired wear has to be bought new and that's ok. It's good to know which eras you identify with not only for style but for fit. The more you try on, the more you'll know.

Look at details. Crappy stitching, balling sweaters, and other structural details can't usually be fixed. Only consider a repair it can be fixed in five minutes, like a button replacement or a shortening a hem. Otherwise, vintage may begin to discourage you with all the extra work. You can buy secondhand clothes off the rack!

Your favorite designers may be something to shoot for. I like Jones of New York and Anne Taylor for the generous cut of their tops so when I see either, I try on. In your vintaging, you may discover other designers that seem to work consistently well with your body. If you need to, start a list.

Avoid crappy designers. I find Target's Willi Smith clothing has disappointed me a few times in my retail life. Therefore, even a cute shirt with that label at a second hand store won't get my $5.

Have fun. Bring a friend, try on some silly and not so silly clothes then go out for coffee. Shopping second hand does feel like a more laid back since you aren't going in with any expectations. Approach it that way! Try things on! Did I mention that already?

Happy Friday, and stay fabulous!

Image from www.shorpy.com.

Saving Money When You Can’t Stock Up

Living Small Forces Means Thinking Different About Saving Money

When I lived in a house (or really a multi-room dwelling). I was a big fan of money saving practices like buying in bulk, making food ahead of time, and holding onto things for future use.

Moving from 1,500ish square feet to a new space that’s 220 square feet was quite a reality check. (To those of you who doubt my fifth grade math skills of figuring this out, ask anyone who has visited. It’s that small.)

I have some limited basement access where I can put things like my bike and skis but most everything I own is within twenty paces of where I sit writing this now.

The biggest change for me was my galley-style kitchen that has a half fridge (aka a dorm fridge). That means either the whole thing can be a freezer or a fridge. Guess what I picked? Though having all my food encased in ice may cut down on the amount of food I eat…Hmmm…

What my new apartment means is a few things:

1) I can’t buy things in bulk; there is no place to store them.
2) I need to choose carefully what stuff I surround myself with as I will be looking at it a lot of the time.
3) I have to go to the grocery store more often then once a week.
4) No more composting.
5) Less space to craft and otherwise spread projects out.
6) I have to store a gallon of ice cream at each of my friend’s houses that I frequently visit; it is the only time I can eat ice cream or anything frozen. (This is probably a good development.)

A few things I am doing now to save time, space, and money in my new place include:

1) Underbuying food at the grocery store. I’ll have to go back later in the week anyway and throwing away food is wasteful.
2) Sticking to the list at the grocery store has taken on a whole new importance.
3) Getting rid of a lot of stuff. Charities and friends as recipients made more sense then slowly selling stuff, not to mention gave me more satisfaction then, say, selling a nice shirt for $5 on eBay.
4) Setting up my apartment for me. Example: I have sweaters on the bookshelf near my door and books in the cupboards above my bed. It probably would look way cooler to my guests if I put out my “thinky” books near the door but I access my sweaters often and only look at books when I’m done reading my latest one. In short, I’ve set up my life for me, not for potential visitors. 
5) Recyclables are stored in a basket in the backseat of my car and emptied weekly. This keeps bulky stuff like newspapers and cans out of my living space.
6) Too Cute Tuesday crafting has moved to a larger location most of the time: my friend Dorrie’s house. She has a large table, good ideas, and is super-enthused about it all. Perfect!
7) I have to leave my house to eat ice cream, among many other things. This forces me to get out of my little space, be social, and try new things.

So a different approach but an equally valid one I think. Living smaller is definitely something I can live with.

Some other articles about living small/living with less:
Some Thoughts on the Small House Movement: Is It Something Worth Considering?
Book Review: The Power of Less
Sell or Donate? From Unclutterer

Shameless Promotion: The Zonked Sunday Night Edition

My Saturdays have become full in the last few weeks, which is good from the standpoint that I am making more money and in general growing my little business. On the other hand, by Sunday I am completely exhausted and ready for my day of rest.

And if you're wondering why the heck bloggers like myself do lists of cool links about once a weekish, check this out. It pretty much explains the logic, and I did write it so I think it's good!

At Breaking Even

This week, I participated in the Carnival of Personal Finance hosted by CleverDude. (And if you are wondering what the heck carnivals are check out this post.)

Some Great Links

For those of you like me who need their protein, it's getting harder to find cheap sources isn't it? (Not to mention that eating a lot of meat is not good for our planet either.) Enter imitation crab meat, which you can actually do a ton with. (via Wisebread)

Hard times give people new insights. Blunt Money lets us in a little on her personal life and reminds us that in life's difficulties are opportunities. At least, I hope so...

Could you live without spending any money for a year? This guy is trying to. I'm not hardcore thrifty enough to ever try anything like this but it's always interesting to live vicariously through people who are. (from Give Me Back My Five Bucks)

On the same note, these people are eating on $1 a day. (from Portland Psst!)

And I feel let in on a big secret: how you know Sam's Club pricing is as low as it'll go. And it's not even complicated or hard to remember. (from Spending Less 101)

This woman is living one of those crazy exciting lives those with dogs and cherished kitchen gadgets can only dream of (that would be me folks). I'd like to travel more but could I ever travel this much? The adventures and costs of full time travel. (from Wisebread)

Free Stuff

Suze Orman's latest book- Oprah's queen of personal finance. I'm not a huge fan (something about her I can't quite put my finger on) but, hey, if it'll help you make better financial decisions in 2009, that's great? (from BudgetsAreSexy)

Vowed to manage your money better in the new year? Quicken is now free but so is Mint.com. (from Mrs. Micah)

Ordering your credit reports yearly is a good idea, and free. And how to do it online. (from CleverDude)

Weight loss podcasts that could keep you motivated. My fat-looking Wii will only do so much for that I suppose! (from No Credit Needed)

Captain Obvious Links
Common sense, sure, but some links to back up the statements.

Library use is going up.

United States living standards still among best in the world.

Walking like a penguin will help you walk on ice. (Check out the animation...hilarious!)

Greyhound has lowered their fares to get people to travel.

People who are in jail for embezelling will try to get rid of anything they have of worth rather then have it get taken by the government.

Happy Sunday! And if you have any good links, feel free to let me know about them. I'm always on the lookout!

Today I Bore My Soul At BluntMoney.com

You can check out my soul-bearing post here. It came out more personal but also better then I thought. So get your Breaking Even fix at Blunt Money today and I'll be back here tomorrow!

Where Does My Money Go?

This guest post is by my friend Melanie Brooks. She's a freelance writer and editor at Bangor Metro and had a personal finance revelation recently. I told her she should write it up as a guest post. Check out more of Melanie online at www.melabrooks.com.
Two more days until I have the internet again...Thanks to Mel for saving me a night sitting outside on stoop to mooch off someone's internet!

Where does my money go? Good question…I had no idea.

I am a sleuth at saving money, usually. But with a recent move, a new job, and the holidays approaching I don’t seem to be able to make any headway. Is it my fault or do I need to cut back? Here’s how I found out – and how you can too. 

For one month I wrote down everything I bought. From a $0.60 toll to the $80 facial I splurged on this past week. I kept a running tally in my little black moleskine notebook I carry with me at all times. You could do this by balancing your checkbook but I have no patience for such things. Plus, if you write it out like a list you can literally see the amount piling up. 

My list looked something like this: 

$30.23 – groceries
$8.14 – lunch with Jill
$9.11 – yarn
$117.05 – student loan
$31.75 – Target
$12.00 – Sea Dog Brewing Company 

You get the picture.  

At the end of the month – yesterday in fact – I tallied it all up. I ended up spending $112.00 more than I made this month. Oops. I was amazed at how much money I spent on food. Over $400 in groceries and going out to eat with friends. Too much! Note to self: plan more meals at home and shop for specific ingredients so I don’t overbuy. What I didn’t add to this list were the car repairs I had to put on my credit card this month. That is an expense that I don’t usually have, so I let it slide. I also didn’t include some Christmas presents, since they aren’t for me. Hey, it’s my game and I can make my own rules. 

Unfortunately I didn’t get to put any moolah into my ING savings account – which gets a higher interest rate than my credit union. Damn! But now I know where I can cut back for next month – and believe me I will. Though I have to say, that facial was well worth it.

New Life, New Budget

The holidays approach and I am beginning to settle into my new apartment. I am ready to look at some new numbers: the cost of my new life.

As with other things in life, I only realized how good I had it looking back on the situation. My costs were low and I had someone to share both chores and adventures with.

The biggest choice I made in this transition was to live alone. A truely hard-core personal-finance blogger probably would've found a roommate (or two  or six!) but, to be honest, I'm not in the frame of mind to do that. I know that I write like I'm fine with all these changes but it's really quite difficult at times. I joked in an e-mail to a friend about needing the option to cry while baking and not wanting to subject a roommate to that. Sure enough, my totally made-up example of everyday personal difficulty actually happened the other night. I made the right decision to live alone, but I'm going to pay for it.

I've come up with a new budget for the same income that I've had all long, factoring in my new cost-of-living. You may remember from this summer the fact that I use very simple rules in budgeting. The book "All Your Worth" says (and I live by) 50% needs, 30% wants, 20% savings.

Needs
$500 rent (includes heat, gas for stove, and electricity) (Change: +$150)
$100 gas for car (Change: +$25)
$100 food (Change: -$150)
$55 car and renters insurance (-$10)
$30 car repairs (no change)
$5 laundry (+$5, had a washer-dryer)
_______
$790 needs (51% of my income)

Wants
$50 cell phone (+$50, I didn't have a cell phone before)
$35 internet (+35 but after this past month sans internet, non-negotiable!)
$75 Sadie ($-25, but she's getting old)
$100 gifts (-$50 from before)
$50 clothes/personal care (-$50)
$33 Y membership (no change)
$110 entertainment (no change)
_______
$453 (30% of my income)

The Rest: Savings and retirement accounts

Like I did upon moving to Ellsworth, I'm keeping careful track of what I'm spending money on for the next few months. Sure, I had to buy a few things when I moved out of necessity but that's what my savings are for and it's not like I went on a crazy shopping spree. (In moving from 1500 ft.² to 220 ft.², there is more of a getting rid of than acquiring of possessions.)

I'm also looking for other ways I can save some money and has made a few good choices in the last month:
-I canceled the data plan and a few other extras on the cell phone. My bill may actually end up being less than $50 a month when all is said and done.
-I didn't get cable, which saves me $30 a month but also keeps me from becoming a blob on the couch.
-I shopped around for car insurance and my current agent actually found me the best deal and it's saving me $10 a month.
-I'm looking at some options to save money on my commute including the possibility of working locally when the week and/or sharing my commute with somebody.
-since I'm within walking distance of a lot of services, I've been walking locally everywhere I can.
-My little apartment makes me think twice about buying anything. (I was saying on Twitter the other day how fitting everything into this place is sort of like doing a puzzle that has one answer that I haven't quite found it yet... it's kind of true!)

On the surface, my life is costing more but I think it can make this work. Because investing in myself seems like pretty much the safest thing to invest in, matter what is going on in the stock market.

Some Thoughts On Wasting Money

So I just got back from a trip and things have been crazy busy. I saw my buddy J's art project on his blog and thought I'd steal the idea. He gets more exposure, I get a free blog post: a win-win I thought.

Then this morning some negative comments basically saying: how can you waste $48 cash on this painting? A perfectly valid question that did get me to thinking.

J had an artistic vision and to him it was worth $50. I get that. Moreover, I respect it.

We all have things other people think we "waste" our money on. When I have extra money, I buy clothes for example. I know friends who love to own every new movie that comes out or have a cell phone that costs more monthly then my phone bill and gym membership combined. Some of use like an expensive meal once in awhile or lunch with the gals every week. We would all spend $50 or more (per month anyway) on most of these things and no one would comment.

Cash on a painting? Maybe it's not your thing. And that's fine. I certainly don't expect people to like everything posted on this blog.

One thing I have learned in writing this blog is that there is not way to personal financial freedom. That's why there's so many personal finance blogs out there. And I think the personal finance gurus who tell you to live reasonably and splurge occasionally are the most right-on.

The excellent book "All Your Worth" has it down to a formula: needs 50%, wants 30%, and savings 20%. Working within those parameters, I've done fine and you can too. And whether you spend your 30% wants on coffee drinks or art projects is not for me to judge. 

But I am curious, especially with the personal finance minded people out there: what do you "waste" your money on? (I mean waste to other people, not to you.) And if you feel a little talky, why do you do it?

Spending By Percentages: The Average American Vs. You

Category	Dave Ramsey	NFCC	CCCS	Avg American	Me
Charitable Giving	10-15%	4%		?	1%
Housing	25-35%	24%	20-30%	24-30%	25%
Utilities	5-10%	incl. in Housing	4-7%	5-6%	incl. in Housing
Food	5-15%	14%	15-20%	15%	14%
Transportation	10-15%	17%	6-20%	18%	14%
Medical	5-10%	6%	2-8%	6%	4%
Clothing	2-7%	6%	2-4%	4%	4%
Invest/Savings	5-10%	13%	5-10%	?	20%
Debt Payments	5-10%	13%	15-20%	?	0%
Misc. (Personal, Recreation,Life Ins.)	5-10%	5%	5-10%	9%	19%

Chart modified from Debt Free Desitiny

So how do you compare to the average American? Well, I found this great chart comparing what Dave Ramsey, the National Foundation of Credit Counseling, and Consumer Credit Counseling. I decided for fun to put in the numbers from yesterday's NYT graphic as well as my own (by the way, I'm shamed by my charitable giving. Yikes!).

Apparently Americans are pretty well on track as far as most areas of budgeting go. How do you measure up?

Spending By Percentages: The Average American

 So I have this list of links that I maintain and use as a go-to whenever I want to highlight a resource or even if I have a little writer's block (which happens on occasion when one has a daily blog). I realize tonight I've been saving a few of these links since May.

Yup, apparently I wasn't very blocked writingwise this summer, but also I thought that now more then ever, we're all doing number crunching of our own budgets.

The New York Times had a great chart it created back in May showing the spending habits of the average consumer:

"Each month, the Bureau of Labor Statistics gathers 84,000 prices in about 200 categories — like gasoline, bananas, dresses and garbage collection — to form the Consumer Price Index, one measure of inflation... The categories are weighted according to an estimate of what the average American spends..." Check out the original graph here. It's really fun and interactive.

I put the percentages of the largest items in. Interesting huh?

The other aspect of the graph besides being voyeristic about people's budgets is how it examines inflation.The darker pinks and reds are things we're spending 20-40% more on then we did in 2008. Gasoline, fuel oil, and propane are all expected though eggs was kind of interesting to see. And we're spending 10% less on computers, televisions, and video equiptment (dark blue).

So are you average? I'm not quite but more on that in Part II: Your Spending Versus The Average American. But in the meantime, head to the New York Times and enjoy the graph!

Read the Get Rich Slowly analysis of the same graphic...

A Thinking Weekend

I Need To Make A Decision About Work Soon...

Many of you know, I work for a local newspaper, which I really like as a job but not as a salary. I understood that initially, they were taking a chance on me. I had no newspaper or web design experience. I was new to the area and, from the looks of my resume, seem to move every two years. I understood (or at least I thought I did) the low salary as a way to test my performance and my loyalty.

As a result for the past year, I've put my heart into this job. To be honest, I feel more successful at this job than I ever have at any other. I've accomplished and surpassed the goals I set for myself. I have tried to go above and beyond when possible, and am proud when someone says something to the effect of  "Give it to Nicole; she'll get it done." I genuinely enjoy the people I work with, my boss in particular. He's honest, positive, gives feedback when I ask, and lets me try out my ideas. My coworkers teach me a lot and make me enjoy going to work everyday.

So full disclosure time. I went to Boston last weekend for two informational interviews. (To be clear, I didn't go looking for a job; I just met someone who knew someone and boom! it was set up.) The digital PR companies I interviewed at were modern and filled with creative, smart people. They had a whole department of web content creation (which is what I really enjoy) and offered a great salary in addition to great benefits and professional development opportunities. One company said if I relocated, they would offer me a position while the HR person for the other company wanted to follow up with me later in the week.

It felt really weird not telling my boss about my trip. I wasn't sure if there would be anything to tell but after my interviews, I felt there was. So I told him. I wanted him to know what I was thinking and I also wanted to make sure he didn't have an offer from our company in mind. My year review is coming up and I was thinking it would be time for a raise.

I sat down with him yesterday for my review. I was offered a commission if I would sell advertising on our web site as my raise. I know that their offer was meant to give me more money than their typical raise and as a compliment to my people skills. But I walked out of the meeting feeling bummed. Not even a cost of living standard 3% raise?

The thing is, I wouldn't feel comfortable upgrading my lifestyle in any way if my extra funds were based on commission. You never know what's coming in moneywise. I also thought that I was productive enough at work in what I was doing to warrent a raise free and clear. But I don't think the company works that way. The low salary wasn't a test of my loyalty; it is how things were going to be.

This is a tough one. Clearly I have a lot to think about this weekend...

How did I get hooked up in the first place? A classic informational interview. To learn more about informational interviews, see this article "The Informational Interview: A Job-Hunter's Secret Weapon" at Get Rich Slowly.

The Zen And Art Of Coupon Clipping

There are some things we admittedly can't do much about. Gas prices and high taxes are two such things (though I suppose you could convert your car to biodiesel or work under the table but both those things require too much effort for me).

I've been looking for ways to further trim my budget, which is actually quite lean. I have made it a goal though of cutting off $50 a month from my $250 a month grocery bill (that's for two people).

There are a few tips related to grocery shopping that I seem to keep hearing over and over in my research and from talking to people: make a price book and cut coupons.

Price Book
If you look at your grocery list, you are probably buying the same things most every week. A price book is just a book you bring with you to the grocery store and write down the lowest prices you pay per item. This way, when you are shopping and wondering whether something is a good price or not, you can consult a reference specific to where you live and shop. I think I have one of these in my head but I really should formalize it. I may be surprised.

Coupons
Yes, I have been using the Grocery Game for a few months now and it is quite helpful but I really want to step up my game (plus it's $5 a month, I mean, can I do this myself?). I've also used coupons off their website to go with the sales. The idea with coupons is 1) that you wait until something is on sale and use a coupon to buy it and 2) you buy nonperishable things while they are on sale so as to "stockpile" them.

And here's an article if you want to get really serious about the coupons (From The Digerati Life).

Since I haven't given coupon cutting the chance it deserves, I went out on Sunday and bought the weekend paper for $1.50. I then proceeded to cut the coupons from it (probably at least $20 worth). I listened to the radio and had a coffee. I found myself quite relaxed after! I even took a photo to illustrate the experience.

So my financial goal is to reduce my grocery bill by $50 a month using a price book, coupons, and The Grocery Game.

Wish me luck and do feel free to share your own coupon cutting tips and tricks.

Budget, Interrupted

How A Grocery Budget Can Effect Your Relationship

Looking at last month's budget, I am struck by how off I was. Groceries were almost $250 off my budget. What kind of personal finance blogger am I? To be fair, eating out spending for me was one meal out, meaning I was eating more food at home. (Other things that threw me off: stuff for the dog, my spontaneous weekend trip to Boston, and the fact that I paid to have my taxes done, which I wasn't going to do initially.)

To get the full picture, fuel spending was half what it usually is and I didn't have to buy any gifts last month (I budget $150 a month for that and if you think of birthdays, weddings, and holiday giving really isn't much).

The grocery overspend made Sean wonder, too. Then I showed him some information in the blogosphere. Apparently, in times of trouble, food companies may not increase prices but decrease volumes as a way of saving money instead (CNN Money). I am also intrigued by putting a teenager on a grocery budget, which to me makes sense if your older children are always putting things in your cart(Debt-Free Revolution). Sean admits to wanting to impulse buy and I hate to act like Mean Mommy and say "no" to him just adding stuff randomly to the cart. He's agreed to sticking to the list with no whining and I've proposed that we don't go to the grocery store this week to get a jump start on saving money this month. So far, so good.

This strict budget has been a way to make us both accountable (for shared expenses) and has kept me honest. I think it's important for couples to be on the same page financially, even if it is something silly like groceries. The Simple Dollar had a great post on how to talk to your partner about money: The First Money Talk: The When and How of a Conversation Every Couple Needs to Have. Both Sean and I have regular conversations about money coming in and going out so we both have an idea what the other is dealing with. Do other people do this as well?

Photo: Homemade food: Inexpensive, yummy, and nutritious!

America's Money Series At CNN Money

Looking for the kind of website that keeps you reading. Check out the "America's Money: In their own words", an almost voyeuristic look at some "typical" Americans and their money.

The other day, I had my first big doubt about what I'm currently doing with the blog. "Do I really know enough to write this blog?" I thought. But then I realized as Sean was reading me some of these America's Money stories last night that there was a clear difference in people's thinking.

Some were continuing on a wrong path and frustrated (A favorite paraphrased quote: "..and with private school tuition, I don't even know what to do.") Some people, however, were making changes and striving for self improvement. I think that's the kind of person I am. It was then I realized that as long as I learned new things and kept sharing them in interesting ways, that maybe I can do this blogging thing. And as long as you keep learning and make strides to improve your situation, financial or otherwise, things should only get better for you too, even if you doubt that you can do it from time to time.

Short enough to be addicting, these money stories kept Sean and I looking at this website for half an hour or so (just another exciting Saturday night!).

Check out America's Money here...

From The Ridiculous News Desk

Couple Makes Cutbacks We Could Only Dream Of

Front page of CNN Money last night: Careers vanish after subprime 'free fall'

In case you don't feel like doing the reading, the highlights:

First Few Paragraphs: Couple gets canned after industry cutbacks but before that they were raking it in.
"The two didn't say exactly how much money they made at their last jobs but Kent admitted they each had six-figure incomes."

The Issue: While their life has changed, they refuse to make major adjustments.
"Their home equity line, mortgage, health and life insurance premiums alone cost about $10,000 a month. Still, they are trying to hang onto what they call their dream home with a view of the Pacific Ocean where they live with Mysti's 11-year old son."

Here are the sacrifices they have made:
"We've used up most of our reserves, cashed in her 401K," said Kent. "We're going Mach 1 into a wall. When we run into it, then we've got to decide what to do next."

Despite their financial problems, the Copes have worked hard to protect their credit rating, staying current on bills. And they've made cutbacks: trading in Kent's Corvette for a Suburban and getting rid of the gardener, for example. But the couple also has learned that it didn't need everything it used to spend money on.

"We used to eat out a lot. Now we are the leftover king and queen," said Kent.

Apparently, sub prime morgage companies now have a stigma to them, making it hard for the couple to find jobs.
"Since he lost his job, Kent has gotten a real estate license and is trying to start a business selling the rapidly increasing inventory of foreclosed homes in Orange County, Calif. Mysti is trying to build an online business selling jewelry and beachwear, some of which she designs herself."

"...For Mysti, 37, all her efforts to find work since she lost her job last May have been futile. She said she believes the attention given to subprime borrowers who have run into trouble paying their mortgages work against her and other former colleagues. It's almost like having "Enron" on your resume.

"The media has somewhat tarnished the subprime industry and all the employees, and portrayed them as being dishonest," she said. "We're not dishonest. Not everybody was a bad borrower. Not every company was a bad lender."

What I'm trying to figure out is why did CNN interview this couple? Clearly it's nearly impossible to feel sorry for them; I mean, their "step down" is a Suburban.

What I do think is CNN Money is using this extreme example to teach us all a lesson. Kent and Mysti had no savings and cashed in a 401K to live on. They aren't taking lower paying but steady jobs and working on their side projects (education, online business) in their free time. I feel like at this point, you have to look at your life and say, "You know what? This is going to suck for awhile." Get rid of the huge house (even if it's worth less than you paid for it), get a smaller rent, find a job that pays five figures, and get a cheap small car. Oh, and they could read this blog if they needed some help in other areas. Maintaining a lifestyle you can't afford hurts only you, whether you want to cash in your chips before it gets bad or get carried out of your house kicking and screaming.

I think we could all learn a little from Kent and Mysti, and maybe on some mean level, feel better about our own situations.

Image from CNN Money article mentioned above

The Magic of Life: 14 Things I (Almost) Never Have To Buy

Do you have things in life that you use but no matter what they always seem to be there in reserve? I have things I haven’t bought in months (and sometimes years) that still seem to be well stocked in the house. They are barely a flicker in the fire of my budget. Perhaps you can identify with some of these:

1. Pens and Pencils- So when I got a little fat in college, I asked my mother (nicely I hope) to not send me any more junk food. She began to then send silly socks, healthier food, and pens and pencils in my care packages. Between mom’s generosity, accidentally kleptoing, free giveaways, and provisions from every job I’ve ever had, I have enough writing tools in reserve indefinitely.
2. Toothbrushes- There has been a debate in our house about how often one is supposed to change toothbrushes. Here’s one opinion on the subject. I get one from my dentist every six months when I go in for my cleaning. Apparently that’s enough for me because I can’t think of when I ever needed to buy one.
3. Cleaning Products- Maybe it’s because I move all the time and other people tend to leave cleaners behind or maybe it’s that I’m not as clean as the rest of Americabut about $50 worth of cleaning supplies (the bulk of it being laundry detergent) is more than enough for me for a year. And that isn’t $50 of cheap cleaner. I buy the organic, good for the environment stuff so I can feel alright when Sadie is licking the floor or cabinets. I like Method a lot. If I was really industrious and cool, I’d make my own.
4. Paper- I buy one ream of paper every couple years for printing projects that are going somewhere special. Otherwise, I recycle office paper used only on one side in my printer for stuff only I will see. I have also cut paper into small squares and stapled them together for a not so fancy notepad.
5. Candles- Perhaps it’s my femaleness or the fact that candles make good gifts in general but I have enough good smelling ones to last me through many a potential power outage. I have also been known to remelt (I used one of those candle warmers to get the wax pourable without dirtying a pan) and recombine bits of candles into one new one.
6. Perfume, Body lotion, soap…- Again, perhaps my femaleness makes me more inclined to get this sort of thing as a gift. All of these things seem to appear far faster than I could ever use them. I have five perfumes going right now, and this is after giving several away. Oh well, at least I smell good!
7. Wall calendars- everyone seems to be giving away a calendar at the end of a year. While I saw a cool woodblock pattern one this year, I couldn’t justify buying it. We already had two perfectly good (and free) wall calendars.
8. Socks- Mom has single-handedly kept me in socks for years between college care packages and other gifts. Also it probably helps that the moment it gets warm enough, I don’t wear them anymore, which saves a few months or so of wear and tear every year. Oh and I’ve also been known to sew holes. Cheap, yes. Practical, yes.
9. Vases and flower pots- Often coming with flowers, vases can be washed and reused. After a couple years of dating the right type of people, you should have amassed quite a collection. If you’ve expressed interest in flowers that last through time, the same can be expected for your flower pot collection.
10. Dishes and napkins- I feel like dishes are either given to you or so cheap that you can buy a set and use them for years. My $20 set of Corell white dishes is still going strong. I’ve received glasses from my friend Kate and silverware from Mom. Also, cloth napkins can be made and washed easily enough that you almost never have to replace them. One set I’ve had for six years is getting just a little warn out. (As a complete aside, cloth napkins may or may not be more environmentally friendly than paper.)
11. Pajamas- Between gifts and retiring old sweats and t-shirts to my pajama drawer, I have always had enough things to sleep in and putter around the house in.

Of course, there are the perennially free things like:

1. Plastic Grocery Bags, which have many uses as litter collectors, dog poo holders, lunch bags… (not all at once, of course).
2. Boxes, which you should never have to buy. (A little tip: if you need some boxes for moving, ask a small town grocery store a couple weeks before you move. My Vinalhaven grocer had stashed away over 40 free medium-sized boxes for me (the ones that liquor come in). Of course, when I was moving in, my neighbors thought I had a drinking problem but that’s another story…
3. Kindling- maybe it’s that I live in Mainebut every time I see a bunch of kindling at convenience stores for $5 certain times of the year it makes me laugh (at least I’ve seen this in both Lewiston and Freeport). Just walk in the forest in the fall (with your blaze orange, of course) and collect some tree branches. As long as you only have a fire occasionally, your hunter-gatherer instincts should lead you to enough wood for a few winter time fires. You can also burn other things to fuel your fire, but that’s another story.

So the next time you get a gift that’s a little overly practical or find something that seems kind of basic around the house, just remember, it’s one less thing you have to buy, which is always good for the budget. Now think “Yay, socks!”or “Wohoo, mechanical pencils!” because that means more money for fun stuff. And isn't that kind of magical?

Is there anything free (or purchased so infrequently that it’s almost free) that I’m overlooking?

Photo from www.magicianstore.com

A Free Budget Template And A Challenge

It occurred to me when I was putting my receipts into my monthly spreadsheet last night that I may not have said ever exactly how I figure out what I spend monthly on different items in my life.

You can go to the Microsoft web site for all the free budget planners you can think of. May I make a few suggestions:

• You may not be able to update and analyze a budget weekly or bi-weekly but you can probably commit a couple times a month to your finances, right? Plus monthly is how your bills are probably set up anyway. You might as well get a monthly template. Here’s the one I use.

• Decide on computer or pen and paper: For many things in my life, I am a paper and pencil kind of girl. Contrary to what you would think, you can do your budget this way with a template. Instead of filling it out on the computer, keep it tacked by your desk and fill it out in pencil. File them away when you are done, starting a fresh one every month. In budget instances, I prefer storing things on my computer.

• Round up or down to the nearest dollar. That movie receipt for $24.49 becomes $24 while the cleaners receipt for $7.56 becomes $8. You will thank yourself when you are looking at a sheet of nice round numbers and in the end, it all evens out anyway.

• Keep a Post it note stuck in your wallet and write down purchases for which you don’t get a receipt. Do it at the time of the purchase since there is usually a pen at the counter, otherwise you will forget. This may seem a little nuts but after a month, it will seem perfectly normal. Even the guy at my usual convenience store seems to think my writing “$1 coffee” on the paper in my wallet is perfectly normal now.

• Set aside a time (me it’s Wednesday nights and when my wallet gets full) to input your transactions into your budget. Pick a time when you aren’t likely to get interrupted. Do something you enjoy while you are doing it, like drinking coffee or listening to music. It’ll make the task seem more meditative or perhaps even pleasurable. It usually takes me 20 minutes.

So pick your template, download it off Microsoft, and then fix it up really general for you. Put your income in (net, not gross), your expected costs for different things. Then save it as “mybudgettemplate” or something generic like that. This way, all your base info is already in there. Then your template becomes “budget-feb-2008”, “budget-march-2008”, etc.

I warn you this will seem pointless the first couple of months you do it but then patterns will emerge. Perhaps you will notice, as I did, that you are spending more money then is coming in and adjust. You may realize you spend a lot of money on coffee. I guarantee you an epiphany within three months. (I had both of the example epiphanies and in general learned a lot about my spending habits.)

Are you ready to take the Three Month Budget Challenge? If so, email me with “I am ready!” the subject line. We will have weekly check-ins and otherwise be supportive of each other’s budget journeys. We’ll set up how it will work together. Think of it as a virtual budget club.

Picture from: www.learn2dostuff.com/Articles/B_BudgetMoney

Gone Daddy Gone

I haven't written in awhile because the impossible happened last week. My father died, suddenly and tragically. I got the phone call at 9:30 pm. Five minutes later, my boyfriend was driving me the five hours to my hometown.

Before leaving the house, I emailed my boss immediately (I don't have his phone number) and spent a week with my family. When I got back to work yesterday, I found that I will only get paid for twelve hours of the forty hour week I missed because that's how much leave time I had saved up.

Needless to say, there are some times in your life where you just have to get through without thinking of the money. But then you have to remember there are other times when you actually have to deal with it. Hello, reality. I'm ready to deal, and not just financially.

When You Have To Pat Yourself On The Back

What I wanted to do tonight: Order out some Chinese dumplings for dinner and buy a new glossy magazine to flip through. Total theoretical cost: $10

What I did do: Ate leftovers and downloaded a free TV show on iTunes. (This feed let’s you know what free downloads are available from iTunes. Very handy.) Total actual cost: $3

Once a month, in an effort to save funds, I like to not go to the grocery store for a week and really clean out the fridge and pantry. The results are usually bizarre and can result in small portions of random dishes. I find though that I waste less food this way as I find, for example, some corn that has migrated its way to the back of the fridge or a can of beans I forgot I had.

Yes, it’s easy and fun to go out to eat. But it’s expensive. My average meal at home costs about $3 while even my inexpensive dumplings would be double that.

So I think it’s good to do some small thing that’s a little annoying or hard. It’s not about self deprivation but about thinking ahead. Think of it as saving money for something more important like Christmas gifts, your retirement, or that trip to Budapest.

Skip the gourmet coffee and just get a small regular one, decide to walk to work and not use gas, print local grocery store coupons… whatever saves you a little money and doesn’t in the end make a big difference in the grand scheme of things.

Now how did that feel? Good. So pat yourself on the back and enjoy some of that slightly bizarre yet nourishing stirfry made from items in your fridge. Pretty soon, you'll be on that plane to Budapest...

I Heart/Hate My Budget

I moved to my current location a few months ago and accepted a job that pays $7,000 less a year then my last job. While it may sound crazy to some, I think most would agree with the statement "Money isn't everything". Because it isn't. I love my current job. When I am there, I'm happy. I like the people I work with, I find my actual work interesting, and I feel needed and appreciated. I leave it at the end of the day and never think about it after I drive out of the parking lot. But did I mention I barely make above minimum wage and have bare bones health insurance with a $5,000 deductible?

So I have decided to use the last two months to figure out my budget, which I need to stick to pretty closely. Here is what I've figured out so far:

My Monthly Budget
Rent: $350, electricity, heat, and phone/internet included (my boyfriend=my landlord, though I think any roommate would work out to a similar situation)
Retirement account: $200
Insurance (car): $100
Gas (car): $75
Groceries: $125
Dining Out: $100
Coffee: $10
Dog: $50 (did I mention I have a geriatric beagle mix?)
Gym membership: $25
Personal care (clothes/toiletries): $75
Entertaiment: $80
Gifts: $200

Total Money Earned every month: $1,420
Total Money Spent every month: $1,390

This means I have $30 net. Of course, there are areas you can see where I can cut into if I say, have to have $400 of work done on my car to pass inspection (which happened last month).

Making a budget is not so bad. I'll be honest, I thought it would stink. It doesn't. Really. I've found it really helpful to see where my money goes and when I finish the month in the black, it is a real sense of accomplishment as I have been actively working towards it all month.

Making a good budget requires writing everything down, even a coffee. (Commit to doing this for two months because after awhile, you'll get into a routine after that point and may no longer need to do it anyway!) Once a week, I go through my receipts and enter them into a spreadsheet to track my expenses.

Do I have time to write a blog and check Myspace everyday? Yes. Do I have time to make a pretty looking spreadsheet? No. But it is more motivating to put information into a good looking and well set up spreadsheet. Microsoft has some good, ready-made budget templates.

If you do end up trying this, let me know how it goes and if it works for you.