The first half of the year, we stayed at or even below our budgeted goals, month after month. We scrimped, we saved. The second half has been less smooth. But we are still okay! The first half, we didn’t focus on saving so much as we did on paying down student loans. The second half is more about saving, and we are saving. But we did overspend, and so I would like to talk about it.
The main overspend categories have been groceries and home improvement/decorating.
On average, we are overspending about $160 a month compared to our budget. However, in August, it was a shocking $1089 over budget! That was broken down across groceries (meat buying for the quarter had something to do with it), home improvement stuff (we needed chairs to go with the table and I know that finding the right chairs is an exercise in frustration, so I bought them new. Only $100 for a set of 4, but it was still a good chunk in our $200/month home improvement budget), and tech (we have an unexpected need for new phones).
No-shopping challenge fail!
There was also a very large car down payment. I did a thing I said I would never ever do: I bought a brand new car and took out a car payment. The decision was thoughtfully made and I don’t regret it. It is a depreciating asset, but one that was not a financial burden and something I will care for and hang onto for a long time.
I owe my blog readers a more complete blog post about my new car. Coming soon!
We give ourselves grace during our no-shopping challenge
I have found that once we pay off a big thing, we kind of get a little freer with money for a few months. I am okay with that. It is okay to take a breather after a big accomplishment. We paid off a $15,000 student loan in about 6 months. I am okay celebrating by “splurging” on chairs. I put splurging in quotes there because $25 a chair is definitely not high-end!
My car payment is $333 a month. It is a 60-month note at 1.9% APR. I am paying $500 a month and will have it paid off in 3 years. I just made my second payment and I have already paid an extra month’s worth of payments!
Budgeting and expense tracking
In other news, I am trying out Mint again. We tried it several years ago but it wouldn’t sync with our bank account. I have been doing expense tracking manually with Google Sheets, but since we are doing credit card spending now, the tracking has become burdensome. In addition to our bank account, we usually have about 3-4 credit cards going at a time: 1 or 2 that we are using towards a minimum spend for sign up bonus, 1 that has special spending categories (like one of our Chase cards is giving us 5X the points per dollar spent on groceries this quarter), and 1 that gives us 2X the points on everything for when we have finished the minimum spend requirements.
I was downloading spreadsheets from each of these into google, organizing them, and then bringing them over. And I was doing a paycheck-to-paycheck spending sheet and a separate monthly spending sheet. So it was a lot. I am trying to use Mint and then will download the sheet into my permanent file at the end of each month.
Mint also makes it easier to pretend my credit card spending is cash spending. We have set all of our credit cards to autopay the full statement balance amount each month. Our credit union lets us set up separate checking and savings accounts within our main account. Someday I will do a post to explain how we use our variety of accounts to automate savings by categories.
Right now, I will say that we have one account set up as a credit card holding account. Every couple of days, I go through Mint and see what we spent and on which card. I go into my bank account, transfer the individual amounts from our main checking account into our credit card holding account with a note reminding me which card it is for and what general thing. So it is an internal transfer and when I am selecting to make the transfer, I will write in the notes section, “Chase Ink, for groceries.”
Since it is autopay and I have trust issues, I keep an extra $1000 in that account, for a cushion in case something big (or several things) got missed right before autopay day. We have it on our calendars and we get reminders, but things can still get missed.
I like this method because it helps the credit cards seem more like cash. I can see an accurate amount in my main checking all the time, to know how much money we actually have to spend in this pay period.
When I first started doing this, I was logging into each and every credit card every day or two to check account balances. Mint makes my life easier in this respect.
So far, there are some things I don’t like. Mint only keeps things for 3 months, and I like to have the records. Also, when I log in this morning, all of my accounts show up with $0. That is a problem. But I like having them do the work of consolidating and I can use tags and notes to keep track of things. So I am going to run with it a while and see if it works for me.
To end on a high note, here are some wins for 2021 (so far)
Paid off the Dude’s private student loan
Bought a new car with a big down payment that is well within our means and we have plenty of space for in our budget
Maximized (almost) my 457(b) account
Budgeted for travel
Kept our savings intact
Started gathering credit card rewards points without adding any credit card debt