The Financial Pow-Wow

JB and I sat down with laptops in laps and talked money for nearly two hours.  We started with our base income and went over expenses line by line, beginning with the house payment and utilities, then annual expenses like vehicle registration, irrigation fees, and taxes, and finally going over discretionary expenses, such as fuel and cell phones.  So now we know what the reality is, every dollar of it, and we can deal with it straight on, because we both agree that we absolutely must stay under our income.  My household budget is currently set at $292 a month, but my goal is still to keep expenditures at or below $50 per week this year.  That math doesn’t quite work out, since there are 52 weeks in a year, but we will cross those bridges as we come to them.

We decided to go over the budget together in depth once a week, keeping all receipts for me to enter into Mint so we can watch the discretionary trends.  JB will manage the checking account and actual bill payments and will give me my household budget in cash.  I don’t have to account to him exactly where I spend the household money so long as I stay within our budget.  We will discuss all needed purchases outside of our personal jurisdiction with each other in a brief nightly money chat so that we are in agreement to the expense and how it will be funded.  We also agreed on a personal spending allowance of $20 a month each.

We came up with an action plan for this week:

  • We are coming out of the heating season so now is a great time to begin a utility budget plan. It doesn’t really save us any money per se but it does eliminate the guesswork by making payment be the same every month.  Update:  Natural gas utility done and is $67/month level pay.   I wasn’t able to find an electric bill today but I will ferret one out of the filing cabinet this weekend.
  • To help with heating costs I will continue to burn wood every green air day.  My goal is to reduce our natural gas bill by 50% during the heating season.  This year we reduced our usage from 0.44 decatherms/day to 0.36 decatherms/day during the coldest months.  Our home thermostat is set to 67* at night and 69* during the day, and if I can heat with wood our furnace doesn’t run at all.  We need to find more ways to reduce heating costs in our house and still keep it reasonably warm.
  • JB will return to using public transit for his work commute.  This is a huge personal sacrifice for him, as it makes his work day 12 hours long.  However, it will save at least $100 a month in fuel cost and his employer offers a green bonus of $100/month.
  • Because of the timing of the bus schedule, JB will have some overtime every week, which will give us a little extra income.
  • I spoke with the preschool to request our toddler be enrolled in the local preschool rather than one six miles away.  The distance hasn’t been an issue since right now we have a three party carpool going, but there is no guarantee of anyone to carpool with next year.  This will save us fuel next school year.
  • Because of some changes with our home office we will be dropping our house phone line in March.  It has been a business necessity up until now but will no longer be needed in a couple of weeks.
  • I called my cellphone provider and went over my current plan.  They issued me a credit of $29.82 for a billing error from dropping a line last month.  I reduced my data plan, saving about $50 a month.  We are looking at more changes in the next few weeks to reduce this bill further.
  • I called our homeowner’s insurance and they are looking at a new product that would save $10 a year.  If we can pay one lump sum we will save an additional $3.50 per month.  Or an auto pay would save us $2.50 per month.
  • We agreed to reduce driving as much as we possibly can.  The transit center puts JB in close proximity to a grocery store and bank every day.

So now I really have my work cut out for me, because even though we have budgeted a little more I am still aiming for a household budget of $200 or less.  That is going to take some real creativity and resourcefulness but I think it’s possible.  And I always love a challenge!

One of my dilemmas is that my AmEx gives me 5% cash back on grocery purchases, which would give me an extra $2.50 a week.  But using a credit card makes it really easy to go over my budget.  I’m going to check into the details of the cash back bonus and let you know how I decide to proceed.

Some things we have done to reduce our overall budget:

  • No cable TV.  I haven’t had a TV for two years and don’t miss it at all.
  • We both drive vehicles that are 15 years old and paid for.  This means we do have some maintenance but it’s better than a car payment.
  • JB gets his hair cut every couple of months at the beauty college for $5.  I stopped coloring my hair six months ago, which saves us $50 a month.

Today was a NO SPEND DAY and a no car day.  We heated with wood.

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