I don't want to do up a big old intro post...too much effort right now. Instead, I'll just leave a brief note to myself to start this off:
Self, sometimes you are awesome at this frugality/self-sufficiency thing. But when you feel better, you should probably come up with a plan for when you're sick. Because when you're sick, you make decisions that are not really best for you in the long term.
Like this one: today you spent one hour's real hourly wage on 2 c of premade peanut soup and a tightly packed cranberry pecan salad from the pretentious grocery store with the expensive deli. Both of these will last you until tomorrow but they are not what you really wanted and you could have cooked something super simple when you got home instead. You could have cooked something tastier, too.
Also, doing YMOYL's habit of recording your transactions, by hand, itemized, is worthwhile: you would never be outraged by that $0.05 charge for a plastic bag if you hadn't seen it because you were just entering a total into YNAB. (Had you been with it, in fact, you wouldn't have bothered with a bag at all -- you bought two small items, you're walking about 20 feet to your parking spot, and you have a work backpack in the car. Duh.)
I don't have to wait 'til the end of the month to know the verdict on this expenditure: NOT in alignment with my values, NOT satisfactory for the time and money spent, and should definitely go down once I don't have to work for a living.
For frugal penance, I have a (hopefully great) beef bone broth on the stove right now. The place smells yummy but it needs more time to simmer. If only I wasn't so tired from trying to fight off this bug. (Right now the neighbours on their balcony are disproportionately annoying to me.)
SkaraBrae's Journal
Yeah I learned the hard way to keep emergency backup food stocked at home. Now I keep some canned soup, frozen orange juice, and canned ginger ale stocked for when I get sick. Also one or two frozen homemade pizzas for those nights when I just don't feel like cooking the entree on the meal plan. It happens.
See, the problem is I'm lazy. If I have premade food in the freezer...I will eat it, even if I'm well. Just because I'd rather not cook most nights.
I have tried OAMC and similar, but the problem is I usually don't want to spend that much time on my precious days off cooking, and also I like fresh better.
Mostly I try to keep no/low-cook stuff around (yogurt, nuts, fruit, eggs, etc.) and that works, to the extent that my husband doesn't dig into it while I'm not looking and devour it instead.
I think maybe I should freeze some soups, though, since he only likes soup if it's cream-based and has more crackers than soup in it... The other thing I need to do, next time we buy a quarter cow, is pre-marinate everything before it's frozen. That way I can pull it out of the freezer later and it's ready to go as soon as it's thawed. Then just add frozen veg and voila, instant dinner.
Come to think of it, I'm also lacking suitable single-serving sized freezer containers for soup/stock.
I have tried OAMC and similar, but the problem is I usually don't want to spend that much time on my precious days off cooking, and also I like fresh better.
Mostly I try to keep no/low-cook stuff around (yogurt, nuts, fruit, eggs, etc.) and that works, to the extent that my husband doesn't dig into it while I'm not looking and devour it instead.
I think maybe I should freeze some soups, though, since he only likes soup if it's cream-based and has more crackers than soup in it... The other thing I need to do, next time we buy a quarter cow, is pre-marinate everything before it's frozen. That way I can pull it out of the freezer later and it's ready to go as soon as it's thawed. Then just add frozen veg and voila, instant dinner.
Come to think of it, I'm also lacking suitable single-serving sized freezer containers for soup/stock.
Re: SkaraBrae's Journal
Well, another restaurant hit my blacklist yesterday.
There was a small electrical fire in our building so the landlord evacuated everyone. Of course our car was stuck in the parking garage (power turned off due to fire, duh) and we were all stuck outside for a good two+ hours. This happened right when I was getting ready for lunch.
Foolishly, instead of wait it out, I thought "hey! I'll get some quick takeaway from the sushi place half a block away! If I only get a couple rolls or a combo, it won't be that expensive." Famous last words. Their sashimi was so expensive that I'm too embarassed to post the total here. What's worse -- it wasn't good sashimi either. What did them in for future visits? I paid by debit, and their debit machine has NO OPTION to not leave a tip. None. I even tried entering $0.00 and it rejected it.
So, yeah. Expensive sashimi that isn't fresh (I live in a coastal city so it should be neither), and no option to not leave a tip? Sorry, that restaurant just lost my business.
(I DO tip at restaurants, however not giving people the option not to smacks of entitlement. Especially here, where our food industry workers DO make the same minimum wage as everyone else. They can't get away with paying them like $2.13 an hour out here. The make the same ten bucks everyone else does in every industry.)
Lesson learned from all this: I need to develop a basic plan for if we get stuck out of the apartment without access to the car, with the cats, and while my husband isn't very mobile. (7 flights of stairs with gout sucks. A lot.)
There was a small electrical fire in our building so the landlord evacuated everyone. Of course our car was stuck in the parking garage (power turned off due to fire, duh) and we were all stuck outside for a good two+ hours. This happened right when I was getting ready for lunch.
Foolishly, instead of wait it out, I thought "hey! I'll get some quick takeaway from the sushi place half a block away! If I only get a couple rolls or a combo, it won't be that expensive." Famous last words. Their sashimi was so expensive that I'm too embarassed to post the total here. What's worse -- it wasn't good sashimi either. What did them in for future visits? I paid by debit, and their debit machine has NO OPTION to not leave a tip. None. I even tried entering $0.00 and it rejected it.
So, yeah. Expensive sashimi that isn't fresh (I live in a coastal city so it should be neither), and no option to not leave a tip? Sorry, that restaurant just lost my business.
(I DO tip at restaurants, however not giving people the option not to smacks of entitlement. Especially here, where our food industry workers DO make the same minimum wage as everyone else. They can't get away with paying them like $2.13 an hour out here. The make the same ten bucks everyone else does in every industry.)
Lesson learned from all this: I need to develop a basic plan for if we get stuck out of the apartment without access to the car, with the cats, and while my husband isn't very mobile. (7 flights of stairs with gout sucks. A lot.)
Re: SkaraBrae's Journal
Since it's a holiday, I have time to do up the big old intro post now.
Hi. I'm SkaraBrae. I live in Canada, and am married with cats and no kids. Somehow I stumbled into end-user facing technical support as a "career". I am INTP so talking to angry dumb people on the phone ALL DAY isn't really the best job for me, plus my particular section of the industry is highly competitive and my employer is undergoing some very drastic and rapid cultural shift. I don't handle stress well. I'm just trying to hang on until I'm financially secure enough to bail.
I did our joint net worth up yesterday, and it is the highest it's been since we went to school, at -$75. We have two student loans left (one apiece) that we are aggressively paying off, and expect to be done within 12 months' time. With a bit of discipline and patience, my Christmas gift to myself this year will be getting mine paid off completely.
I don't have a savings rate because anything extra is going at the debt right now. I'm sooo sick of it, I want it gone. I guess I could use the snowball as a percentage of my income as a guideline instead? In that case, it usually hovers between 20-25%, with gusts of 30-50% when I get bonus money.
Throughout our marriage my husband and I have tried lots of different ways of handling money. We got married at what is considered a young age nowadays and didn't really have any experience handling real cash as adults. (We have been together for ten years and were always really underemployed until about a year ago.) For most of our relationship we have tried doing it jointly, but after about a decade of growing and maturing, our ways of interacting with each other over money didn't. So then we tried allocating the responsibility to one partner or the other, and giving the other person blow money. That worked okay but wasn't quite right either. For the last month and a bit we've tried handling it separately, with one joint chequing account where we each put half the combined expenses. It's a strange feeling, but so far it's given us a lot of freedom and increased our feelings of agency when it comes to financial stuff. It's also completely eliminated the money fights.
I have no doubt we'll eventually change/grow some more, and this method will stop working for us at that point. But I'm confident that we won't have a problem talking about it and figuring out a new method to try (or an old method to tweak), because hubs is pretty cool like that.
After our debt is paid off I want to increase the emergency fund and then keep bankrolling it to turn it into the FIRE fund. Also on the radar somewhere is shifting to a less stressful job, either within my company or elsewhere.
Hubs and I complement each other pretty well: he's really good at earning extra money, and I'm really good at saving it. (My mom stayed at home while my dad made a low-level manager salary, so I observed a thing or two about being frugal as a kid.) My biggest obstacle is really how overwhelmed I get when I think about how long it's going to take. We sort of coasted into this middle class lifestyle and, well, frankly, it's hard to turn back the clock on lifestyle inflation after the fact. I've read that a good start is to realize that things don't bring you happiness, but...having a quiet, sunny home DOES bring me happiness (and physical and mental health). Having my cats DOES bring me joy -- and I can't knowingly feed them the kitty equivalent of McDonald's any more than I'd let my child, if I had one, eat KD unendingly, no matter how cheap it is. (And I've already asked my husband about rehoming one of the cats. More than once. The answer is always no.)
So, oh woe is us, our biggest obstacle to getting there sooner is that we like nice things and don't want to do without them. I'm hoping to at least prevent further lifestyle inflation. And I'd really like our next place to be smaller, because this place is annoying to have to clean. (But a smaller place would mean we'd need to get rid of one of the cats.)
Ya. Um. I'm doing a sugar elimination challenge right now, because I know I'm addicted to the stuff, so I'm a bit whinier and grouchier than normal. Should pass in a few days.
End rambling.
Hi. I'm SkaraBrae. I live in Canada, and am married with cats and no kids. Somehow I stumbled into end-user facing technical support as a "career". I am INTP so talking to angry dumb people on the phone ALL DAY isn't really the best job for me, plus my particular section of the industry is highly competitive and my employer is undergoing some very drastic and rapid cultural shift. I don't handle stress well. I'm just trying to hang on until I'm financially secure enough to bail.
I did our joint net worth up yesterday, and it is the highest it's been since we went to school, at -$75. We have two student loans left (one apiece) that we are aggressively paying off, and expect to be done within 12 months' time. With a bit of discipline and patience, my Christmas gift to myself this year will be getting mine paid off completely.
I don't have a savings rate because anything extra is going at the debt right now. I'm sooo sick of it, I want it gone. I guess I could use the snowball as a percentage of my income as a guideline instead? In that case, it usually hovers between 20-25%, with gusts of 30-50% when I get bonus money.
Throughout our marriage my husband and I have tried lots of different ways of handling money. We got married at what is considered a young age nowadays and didn't really have any experience handling real cash as adults. (We have been together for ten years and were always really underemployed until about a year ago.) For most of our relationship we have tried doing it jointly, but after about a decade of growing and maturing, our ways of interacting with each other over money didn't. So then we tried allocating the responsibility to one partner or the other, and giving the other person blow money. That worked okay but wasn't quite right either. For the last month and a bit we've tried handling it separately, with one joint chequing account where we each put half the combined expenses. It's a strange feeling, but so far it's given us a lot of freedom and increased our feelings of agency when it comes to financial stuff. It's also completely eliminated the money fights.
I have no doubt we'll eventually change/grow some more, and this method will stop working for us at that point. But I'm confident that we won't have a problem talking about it and figuring out a new method to try (or an old method to tweak), because hubs is pretty cool like that.
After our debt is paid off I want to increase the emergency fund and then keep bankrolling it to turn it into the FIRE fund. Also on the radar somewhere is shifting to a less stressful job, either within my company or elsewhere.
Hubs and I complement each other pretty well: he's really good at earning extra money, and I'm really good at saving it. (My mom stayed at home while my dad made a low-level manager salary, so I observed a thing or two about being frugal as a kid.) My biggest obstacle is really how overwhelmed I get when I think about how long it's going to take. We sort of coasted into this middle class lifestyle and, well, frankly, it's hard to turn back the clock on lifestyle inflation after the fact. I've read that a good start is to realize that things don't bring you happiness, but...having a quiet, sunny home DOES bring me happiness (and physical and mental health). Having my cats DOES bring me joy -- and I can't knowingly feed them the kitty equivalent of McDonald's any more than I'd let my child, if I had one, eat KD unendingly, no matter how cheap it is. (And I've already asked my husband about rehoming one of the cats. More than once. The answer is always no.)
So, oh woe is us, our biggest obstacle to getting there sooner is that we like nice things and don't want to do without them. I'm hoping to at least prevent further lifestyle inflation. And I'd really like our next place to be smaller, because this place is annoying to have to clean. (But a smaller place would mean we'd need to get rid of one of the cats.)
Ya. Um. I'm doing a sugar elimination challenge right now, because I know I'm addicted to the stuff, so I'm a bit whinier and grouchier than normal. Should pass in a few days.
End rambling.
Re: SkaraBrae's Journal
In that case, I "saved" 30.88% of my income this month.bigato wrote:That's savings! I consider money put towards paying debt as savings.SkaraBrae wrote: I don't have a savings rate because anything extra is going at the debt right now.
Not bad, but I think I can do better. Or rather, I could if my overhead expenses took up less of my income...Re: SkaraBrae's Journal
Well. The sugar elimination challenge is going well. 4 days without it and already the joint inflammation is going away. Also, today, my mood was simply imperturbable. That's nice when you've been dreading going to work for the last few months straight.
Also, I sat down tonight and did some tweaking and fiddling and jiggling with the budget this month. It was annoying to do after all the running around I did after work, but I managed to grab another 6.5% of my income to throw at the snowball right now, bringing my total so far up to 37.38%. Much better than I'd hoped for.
Also, I sat down tonight and did some tweaking and fiddling and jiggling with the budget this month. It was annoying to do after all the running around I did after work, but I managed to grab another 6.5% of my income to throw at the snowball right now, bringing my total so far up to 37.38%. Much better than I'd hoped for.
Re: SkaraBrae's Journal
Today, for the first time in almost 5 years, we have a positive net worth.
It feels really, really good, and is very motivating to keep going along that last little stretch until the student loans are killed.
Edit: of course, this would be the month where one of the cats needs to go see the vet tomorrow. LOL, Murphy, that old joker...
It feels really, really good, and is very motivating to keep going along that last little stretch until the student loans are killed.
Edit: of course, this would be the month where one of the cats needs to go see the vet tomorrow. LOL, Murphy, that old joker...
Re: SkaraBrae's Journal
Our net worth shot up by 2.5x this month. Most of it is still held in illiquid assets, but we're working on that: we paid off 40% of one of our two remaining debts today.
Over the last couple weeks, with some fiddling and finagling and general tweaking of the budget, we have managed to arrange it so that we should be totally debt free within 6 months. Hopefully 4, but that involves some shenanigans with the buffer that I'm not sure I want to do yet. (I know that once I'm staring down the last bit of the loan, I'll do it in a heartbeat. I'm really impatient and trigger-happy when it comes to paying off debt, and don't mind dipping into savings, sinking funds, or next month's buffer to do it.)
Today's big joy and frugal activity: picked up our 1/4 cow and 1/2 pig from the butcher. Am busy pre-cutting and marinating stuff so that later on, I just have to thaw and cook. Their food is so delicious...and the butcher always does something fun or interesting for us. This time we got pork jowls and teres major steaks as our "surprise". We're picking up whole chickens later today to prefab into various parts too. Then back to work for another week. Bonus points because we'll pick up stat pay due to the holiday on Monday.
Over the last couple weeks, with some fiddling and finagling and general tweaking of the budget, we have managed to arrange it so that we should be totally debt free within 6 months. Hopefully 4, but that involves some shenanigans with the buffer that I'm not sure I want to do yet. (I know that once I'm staring down the last bit of the loan, I'll do it in a heartbeat. I'm really impatient and trigger-happy when it comes to paying off debt, and don't mind dipping into savings, sinking funds, or next month's buffer to do it.)
Today's big joy and frugal activity: picked up our 1/4 cow and 1/2 pig from the butcher. Am busy pre-cutting and marinating stuff so that later on, I just have to thaw and cook. Their food is so delicious...and the butcher always does something fun or interesting for us. This time we got pork jowls and teres major steaks as our "surprise". We're picking up whole chickens later today to prefab into various parts too. Then back to work for another week. Bonus points because we'll pick up stat pay due to the holiday on Monday.
Re: SkaraBrae's Journal
Jacob's note about 200-250 posts coinciding with FI spurred me to post once more....
Paying off the debt is on hold for now, since, as we expected, we were given working notice earlier this month. While our total debt figure isn't going down much, our net worth is still climbing and should hit a new milestone for us (a nice round number with an extra digit on the end of it).
As a consequence of the layoffs, it looks like (for the first time in about 5 years) I will have Christmas holidays off work. If only I wasn't avoiding my in-laws for other reasons...
Naturally, husband and I did the math on getting laid off long before the news dropped. He's using this opportunity to re-train into a trade (i.e. something that makes more money than we do now and has better hours). I will be shifting to part time work, to allow a better work/home life balance. We are both looking forward to it, and very grateful that we were laid off at the same time.
The only awkward part is this one friend who keeps offering to get us a job at his company. I can't figure out a tactful way to explain to him that we will make more on EI than we would at his job...and that we have enough savings to last us through the trades retraining program too... (this is WITHOUT moving from our horribly expensive suburban "luxury" apartment, or downsizing our rather pricey grocery budget). It is very sweet that he is concerned and wants to help, but I've tried explaining to him multiple times that my husband is retraining into a totally different field than this job, and that we have savings; he seems more anxious about us being laid off than we are. (Of course, our parents are also anxious too, but seem so far to be mollified by what we've told them of retraining, EI, and the fact that we have savings.)
Paying off the debt is on hold for now, since, as we expected, we were given working notice earlier this month. While our total debt figure isn't going down much, our net worth is still climbing and should hit a new milestone for us (a nice round number with an extra digit on the end of it).
As a consequence of the layoffs, it looks like (for the first time in about 5 years) I will have Christmas holidays off work. If only I wasn't avoiding my in-laws for other reasons...
Naturally, husband and I did the math on getting laid off long before the news dropped. He's using this opportunity to re-train into a trade (i.e. something that makes more money than we do now and has better hours). I will be shifting to part time work, to allow a better work/home life balance. We are both looking forward to it, and very grateful that we were laid off at the same time.
The only awkward part is this one friend who keeps offering to get us a job at his company. I can't figure out a tactful way to explain to him that we will make more on EI than we would at his job...and that we have enough savings to last us through the trades retraining program too... (this is WITHOUT moving from our horribly expensive suburban "luxury" apartment, or downsizing our rather pricey grocery budget). It is very sweet that he is concerned and wants to help, but I've tried explaining to him multiple times that my husband is retraining into a totally different field than this job, and that we have savings; he seems more anxious about us being laid off than we are. (Of course, our parents are also anxious too, but seem so far to be mollified by what we've told them of retraining, EI, and the fact that we have savings.)
Re: SkaraBrae's Journal
Apparently I'm not so good at consistency, since here we are 3 months later and nary a month-end post from me since October.
We ended up pulling the trigger and becoming debt free this month after all. We rearranged things to do it and it probably wasn't the wisest move from a mathematical standpoint, but it reduces our obligations and increases our liquidity -- and we both were just sick of the debt.
Becoming debt-free led to rewatching some Dave Ramsey FPU videos, out of curiosity to see if the man still had anything to offer us.
Oh boy, did he ever.
Cash envelopes
We did this awhile back, then stopped when we got real jobs earning decent money. I had many objections to resuming this system:
-we would forget the right envelope(s) when going out (aka piss-poor planning)
-husband would forget to get receipts
-I was embarrassed to pull out envelopes like a little old lady and hold up the checkout line counting out change (because you always end up with tons of change)
-now that the government has abolished the penny, cash transactions are rounded (while debit and credit are not), making the mental math a little more complex and in some cases resulting in you paying up to 2 cents more for something with cash than you would with debit/credit. (Horrors! 2 cents!)
-I get cashback from my credit card AND earn interest on money in my savings account. I pay my credit card every month on time. I'm being smart and beating the system by doing things this way; cash-only is for for those losers who don't have any self discipline.
Well...the first problem is not an envelope-system problem, it is an us-not-thinking-ahead problem. When you have lots of money or the ability to work overtime pretty much whenever you like, you get used to throwing money at your problems, and solving problems with "we'll just earn more". Using cash envelopes is really highlighting for me how blasé we got about this whole thing. It's easy to get into unconscious spending routines. Even if you are an obsessive tracker (I religiously put everything in YNAB and reconciled against bank records to the penny), there is definitely an emotional pain component to cash leaving your hands instead of just writing numbers in a spreadsheet column. I discovered that I don't like feeling this pain since it reminds me my money is finite. Which made me realize I had other issues to work on, and also that I need to do the cash envelope system even more. (Being currently unemployed, my money IS finite and I DO need to be reminded of that, regardless of how "poor" it might make me feel.)
After a few times of turning back for the envelopes, you no longer forget them. They also "live" in a centralized location in our house, and are promptly returned there when we get back. (Any fears about it getting stolen are mitigated by the fact that we only keep a couple weeks' worth on hand, and it is very nondescript -- not a big box that says "OUR MONEYZ ARE HERE" or anything.)
Husband has actually been really good about not forgetting receipts. A small part of it is that, being unemployed, we now go out to do most of the shopping together and I remind him when needed. A huge part of it is that he has been taking major steps to increase his physical and mental health lately, and is simply not as forgetful. The element of personal growth is not to be underestimated either. We've done a lot of work to remove the parent/child dynamic from our financial relationship (you know, the one where the person who's "good with money" handles it all, so the one's who's not doesn't have to be responsible or screw anything up, and as a free bonus gets to always blame the "responsible one" for never letting us have nice things or any fun), and this is paying off.
As for the little old lady fears, well, we have self checkout for groceries now. And when I worked retail, I always appreciated change, since I hated breaking a roll for just one or two coins, inevitably just before closing, so I'd have to count the other 48 when I cashed out the till...
And the rounding? Multiple studies show that we spend, on average, at LEAST 20% more when paying via credit card as opposed to cash. This is a much bigger amount than the rounding differences I used as an excuse to not do this.
In fact, by the time I total up the money I make with my cashback and savings interest scheme, the amount I'm making off it is...um...0.5% of what we spend in a month. Combine with the above (conservative) statistic of 20% expenditure increase when swiping plastic, and now who's playing whose game?! I'm spending around 20% more to save 0.5%? (We'll ignore the fact, for the moment, that making a simple, one-time, human error mistake in my system also meant 30% of my annual returns from it were chewed up by the resulting fees.)
If you are the type of person who thinks, like I did, that you are successfully gaming the system with rewards points, I suggest an N=1 experiment:
A. Look at Mint or Quicken and total your spending for the last 3-6 months, in whatever categories you feel are appropriate. Subtract the cash value of your credit card rewards (prorated from an annual basis) and interest on monies in savings accounts from this total.
B. Try going cash-only for those categories for a matching period of time. Total up your spending.
C. Compare the numbers to see whether and how much each payment type affects your spending specifically.
I do know that for some people, cash seems to burn a hole in their pocket. I'm not one of them, so all I can suggest is taking out smaller amounts of cash at a time (like a week's worth) so you can't screw yourself up too much if you spend it all. As you get better at trusting yourself, you can increase the amount you have on hand if you like. Ultimately, it's all about knowing your psychology and tricking yourself into behaving in ways that are better for your long term financial health anyway.
On-paper budget at the start of the month
I didn't see the point to this initially.
-YNAB and spreadsheets total it all for me! Why would I use a hand calculator?!
-I do all the budgeting anyway, and I want to do it in the fastest and most convenient way for me.
-I'm just going to transfer it to YNAB anyway to make tracking easier, why not do it there to begin with?
Once again, Ramsey's way has proved best.
Doing the budget by hand means you write out every expected expense, by hand, every month. Much like counting out and forking over cash helps you feel the pain of the transaction, doing the budget by hand means you contemplate your regular expenses in a way you just don't do when it's Ctrl-C, Ctrl-V, done. We quickly came to the conclusion we're paying more than we'd like for rent, and are currently hunting for a more acceptable solution.
Doing it on paper also made it easier for husband and I to do the budget together. No more me hunkering down in front of a glowing screen and emerging from the office awhile later with The Budget, to present it to the masses. Husband gets his say too. Husband has to be involved now, too. We tussle over every line item and we have to come to some sort of agreement about it before we can move on. We've already completely redone February's budget twice -- once for unexpected expenses we didn't anticipate having, and once because we simply realized we didn't feel it reflected our true priorities. Doing the budget on paper by hand has forced us to clarify our priorities, individually, and communicate them to each other much more clearly -- and to work with each other when they conflict. So far it's been a huge boon to our financial relationship with each other.
Conclusion
Dave Ramsey has done a lot to help us financially. His videos were the catalyst for us waking up from our societally-induced consumer-and-student-loan-debt dream to begin with. I find it ironic that we actually haven't paid a cent to watch, listen to, or read any of his material. Any good library should have them or be able interlibrary loan them for you. If you have a choice, I recommend the video versions of FPU over the audio -- Dave's presentation style adds so much them, and he uses lots of visual props. Additionally, the 2006 version is way better than the 2012 one. His presentation has more humour, more energy, and the material is not condensed (13 lessons instead of 9).
I have many quibbles with some specific things the man says (some of his investing advice and numbers, for example), and some of his beliefs (he's from the South and not shy about his religion). However, I do not find that these differences of opinion detract from his overall point or theme -- and his presentation style is very motivational for my husband, which makes it more than worthwhile to put up with any parts I don't care for.
We ended up pulling the trigger and becoming debt free this month after all. We rearranged things to do it and it probably wasn't the wisest move from a mathematical standpoint, but it reduces our obligations and increases our liquidity -- and we both were just sick of the debt.
Becoming debt-free led to rewatching some Dave Ramsey FPU videos, out of curiosity to see if the man still had anything to offer us.
Oh boy, did he ever.
Cash envelopes
We did this awhile back, then stopped when we got real jobs earning decent money. I had many objections to resuming this system:
-we would forget the right envelope(s) when going out (aka piss-poor planning)
-husband would forget to get receipts
-I was embarrassed to pull out envelopes like a little old lady and hold up the checkout line counting out change (because you always end up with tons of change)
-now that the government has abolished the penny, cash transactions are rounded (while debit and credit are not), making the mental math a little more complex and in some cases resulting in you paying up to 2 cents more for something with cash than you would with debit/credit. (Horrors! 2 cents!)
-I get cashback from my credit card AND earn interest on money in my savings account. I pay my credit card every month on time. I'm being smart and beating the system by doing things this way; cash-only is for for those losers who don't have any self discipline.
Well...the first problem is not an envelope-system problem, it is an us-not-thinking-ahead problem. When you have lots of money or the ability to work overtime pretty much whenever you like, you get used to throwing money at your problems, and solving problems with "we'll just earn more". Using cash envelopes is really highlighting for me how blasé we got about this whole thing. It's easy to get into unconscious spending routines. Even if you are an obsessive tracker (I religiously put everything in YNAB and reconciled against bank records to the penny), there is definitely an emotional pain component to cash leaving your hands instead of just writing numbers in a spreadsheet column. I discovered that I don't like feeling this pain since it reminds me my money is finite. Which made me realize I had other issues to work on, and also that I need to do the cash envelope system even more. (Being currently unemployed, my money IS finite and I DO need to be reminded of that, regardless of how "poor" it might make me feel.)
After a few times of turning back for the envelopes, you no longer forget them. They also "live" in a centralized location in our house, and are promptly returned there when we get back. (Any fears about it getting stolen are mitigated by the fact that we only keep a couple weeks' worth on hand, and it is very nondescript -- not a big box that says "OUR MONEYZ ARE HERE" or anything.)
Husband has actually been really good about not forgetting receipts. A small part of it is that, being unemployed, we now go out to do most of the shopping together and I remind him when needed. A huge part of it is that he has been taking major steps to increase his physical and mental health lately, and is simply not as forgetful. The element of personal growth is not to be underestimated either. We've done a lot of work to remove the parent/child dynamic from our financial relationship (you know, the one where the person who's "good with money" handles it all, so the one's who's not doesn't have to be responsible or screw anything up, and as a free bonus gets to always blame the "responsible one" for never letting us have nice things or any fun), and this is paying off.
As for the little old lady fears, well, we have self checkout for groceries now. And when I worked retail, I always appreciated change, since I hated breaking a roll for just one or two coins, inevitably just before closing, so I'd have to count the other 48 when I cashed out the till...
And the rounding? Multiple studies show that we spend, on average, at LEAST 20% more when paying via credit card as opposed to cash. This is a much bigger amount than the rounding differences I used as an excuse to not do this.
In fact, by the time I total up the money I make with my cashback and savings interest scheme, the amount I'm making off it is...um...0.5% of what we spend in a month. Combine with the above (conservative) statistic of 20% expenditure increase when swiping plastic, and now who's playing whose game?! I'm spending around 20% more to save 0.5%? (We'll ignore the fact, for the moment, that making a simple, one-time, human error mistake in my system also meant 30% of my annual returns from it were chewed up by the resulting fees.)
If you are the type of person who thinks, like I did, that you are successfully gaming the system with rewards points, I suggest an N=1 experiment:
A. Look at Mint or Quicken and total your spending for the last 3-6 months, in whatever categories you feel are appropriate. Subtract the cash value of your credit card rewards (prorated from an annual basis) and interest on monies in savings accounts from this total.
B. Try going cash-only for those categories for a matching period of time. Total up your spending.
C. Compare the numbers to see whether and how much each payment type affects your spending specifically.
I do know that for some people, cash seems to burn a hole in their pocket. I'm not one of them, so all I can suggest is taking out smaller amounts of cash at a time (like a week's worth) so you can't screw yourself up too much if you spend it all. As you get better at trusting yourself, you can increase the amount you have on hand if you like. Ultimately, it's all about knowing your psychology and tricking yourself into behaving in ways that are better for your long term financial health anyway.
On-paper budget at the start of the month
I didn't see the point to this initially.
-YNAB and spreadsheets total it all for me! Why would I use a hand calculator?!
-I do all the budgeting anyway, and I want to do it in the fastest and most convenient way for me.
-I'm just going to transfer it to YNAB anyway to make tracking easier, why not do it there to begin with?
Once again, Ramsey's way has proved best.
Doing the budget by hand means you write out every expected expense, by hand, every month. Much like counting out and forking over cash helps you feel the pain of the transaction, doing the budget by hand means you contemplate your regular expenses in a way you just don't do when it's Ctrl-C, Ctrl-V, done. We quickly came to the conclusion we're paying more than we'd like for rent, and are currently hunting for a more acceptable solution.
Doing it on paper also made it easier for husband and I to do the budget together. No more me hunkering down in front of a glowing screen and emerging from the office awhile later with The Budget, to present it to the masses. Husband gets his say too. Husband has to be involved now, too. We tussle over every line item and we have to come to some sort of agreement about it before we can move on. We've already completely redone February's budget twice -- once for unexpected expenses we didn't anticipate having, and once because we simply realized we didn't feel it reflected our true priorities. Doing the budget on paper by hand has forced us to clarify our priorities, individually, and communicate them to each other much more clearly -- and to work with each other when they conflict. So far it's been a huge boon to our financial relationship with each other.
Conclusion
Dave Ramsey has done a lot to help us financially. His videos were the catalyst for us waking up from our societally-induced consumer-and-student-loan-debt dream to begin with. I find it ironic that we actually haven't paid a cent to watch, listen to, or read any of his material. Any good library should have them or be able interlibrary loan them for you. If you have a choice, I recommend the video versions of FPU over the audio -- Dave's presentation style adds so much them, and he uses lots of visual props. Additionally, the 2006 version is way better than the 2012 one. His presentation has more humour, more energy, and the material is not condensed (13 lessons instead of 9).
I have many quibbles with some specific things the man says (some of his investing advice and numbers, for example), and some of his beliefs (he's from the South and not shy about his religion). However, I do not find that these differences of opinion detract from his overall point or theme -- and his presentation style is very motivational for my husband, which makes it more than worthwhile to put up with any parts I don't care for.
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Gilberto de Piento
- Posts: 1950
- Joined: Tue Nov 12, 2013 10:23 pm
Re: SkaraBrae's Journal
Hi SkaraBrae,
I feel the same way about Dave Ramsey. I never got to the point of using his envelope system but while I was working my way out of student loan debt I listened to his podcast every week for motivation. I don't agree with everything he says but I think he does a great job of making people with debt feel like they are not on their own.
I feel the same way about Dave Ramsey. I never got to the point of using his envelope system but while I was working my way out of student loan debt I listened to his podcast every week for motivation. I don't agree with everything he says but I think he does a great job of making people with debt feel like they are not on their own.
Re: SkaraBrae's Journal
Alright, so, a month and a half later...
The envelope system is driving me mad! Tracking stuff has become very frustrating. Reconciling cash on hand and our accounts has been annoying. But I am sticking with it, because Dave said it wouldn't work for the first three months, and if I'm going to try a system and trust it, I'm going to truly try it. I suspect we'll revert to using cash for only a couple of our main categories. We've already switched to pulling out money weekly (since husband is the type whose cash DOES burn a hole in his pocket, this seems wisest).
We are also having an interesting month due to EI shenanigans. We got only half our money this month. Thankfully we have an efund to cover the modest shortfall, but damn, it stings to pull from the efund -- even if this is what it's there for!
In the meantime, we're getting other financial stuff in order. I filed our taxes and the net refund is going to be $2.93 between us. I also cleaned out the tax filing cabinet and made sure everything was organized properly by year so next year's tax papers are all in order and easy to file. We are going to get some awesome deductions on medical expenses since we both bought new glasses.
We also transferred over some of the life insurance we got through our ex-employer (they had a nice conversion option we used). We've both been job hunting, and I'm doing a career decision making course aimed at helping me figure out where exactly I want to go from here. Our ex-employer was top dog in the local market for our industry; everyone else is paying at most 80% base salary for the same work (it gets worse once you factor in the total comp package). And I don't even want to do that kind of work anymore. So we'll see what other options I can come up with.
Our bank account balance looks depressingly low to me these days, but then I remember we are TOTALLY DEBT FREE and going to fund husband's education in a year and a half with COLD HARD CASH and not debt.
The envelope system is driving me mad! Tracking stuff has become very frustrating. Reconciling cash on hand and our accounts has been annoying. But I am sticking with it, because Dave said it wouldn't work for the first three months, and if I'm going to try a system and trust it, I'm going to truly try it. I suspect we'll revert to using cash for only a couple of our main categories. We've already switched to pulling out money weekly (since husband is the type whose cash DOES burn a hole in his pocket, this seems wisest).
We are also having an interesting month due to EI shenanigans. We got only half our money this month. Thankfully we have an efund to cover the modest shortfall, but damn, it stings to pull from the efund -- even if this is what it's there for!
In the meantime, we're getting other financial stuff in order. I filed our taxes and the net refund is going to be $2.93 between us. I also cleaned out the tax filing cabinet and made sure everything was organized properly by year so next year's tax papers are all in order and easy to file. We are going to get some awesome deductions on medical expenses since we both bought new glasses.
We also transferred over some of the life insurance we got through our ex-employer (they had a nice conversion option we used). We've both been job hunting, and I'm doing a career decision making course aimed at helping me figure out where exactly I want to go from here. Our ex-employer was top dog in the local market for our industry; everyone else is paying at most 80% base salary for the same work (it gets worse once you factor in the total comp package). And I don't even want to do that kind of work anymore. So we'll see what other options I can come up with.
Our bank account balance looks depressingly low to me these days, but then I remember we are TOTALLY DEBT FREE and going to fund husband's education in a year and a half with COLD HARD CASH and not debt.
Re: SkaraBrae's Journal
My husband has admitted to doing this when he wanted more motivation too. I had no idea he was, but he assured me "that man has kept me out of the fast food places, cafeteria, and vending machines more than once". (My husband is kind of a processed food junkie, so this is a BIG DEAL for me.)Gilberto de Piento wrote:while I was working my way out of student loan debt I listened to his podcast every week for motivation.
Re: SkaraBrae's Journal
SkaraBrae
Really cool progress. Stick with the envelopes - it is well worth it because it forces you to think ahead and understand that cash is finite! One thing I do with DW is use an application on our phones called toshl - here is their website:
https://toshl.com/
We are cheap so we use their basic application. Its simple - make out your expense categories and every time you spend, lof it in - it's quick. The real beauty is that you can sync across two devices so both DW and I can see in real time what the spending has been this month. I've now been using it for 7 months and it is truly not a pain.
Best
Magnus
Really cool progress. Stick with the envelopes - it is well worth it because it forces you to think ahead and understand that cash is finite! One thing I do with DW is use an application on our phones called toshl - here is their website:
https://toshl.com/
We are cheap so we use their basic application. Its simple - make out your expense categories and every time you spend, lof it in - it's quick. The real beauty is that you can sync across two devices so both DW and I can see in real time what the spending has been this month. I've now been using it for 7 months and it is truly not a pain.
Best
Magnus
Re: SkaraBrae's Journal
They are driving me mad and I have mostly abandoned them. I'd like to make up all sorts of reasons why I don't need them but the truth is they are bloody inconvenient and complicated and right now, everything needs to be simple while we mediate the remaining money style differences between us.GPMagnus wrote:Stick with the envelopes - it is well worth it because it forces you to think ahead and understand that cash is finite! One thing I do with DW is use an application on our phones called toshl
We have kept husband's spending money for his hobby in an envelope, in cash, however. It is working very well for him.
Also, toshl sounds like YNAB. They released a mobile version free for Android and iPhone, so I can sync everything across our phones and enter transactions while we're out shopping, etc. The physical envelopes made my tracking in YNAB a complete and utter mess; since going back to mostly debit with a bit of cash it is working so much easier.
Re: SkaraBrae's Journal
I might be inconsistent, but I keep circling back to what's good for me eventually...
How to summarize the last two years? It was harder on us than we realized to lose our jobs. I eventually started working part time, then back to full time, and was back to being "horribly underemployed" until about a month ago. I'm still underpaid -- but I'm not underemployed anymore! I also now work for a big bank, so my job is much more stable. I get benefits and employer matching and free banking perks again.
My husband took a series of "survival" jobs, which was hard on him emotionally and mentally. We spent most of last year trying to get some scary health issues of his under proper management. His school program has had a waitlist for 3 years running, so we've had time to get other stuff in order. He is also working on joining the military reserves as a part-timer.
Now that we've both got semi-decent jobs back, we're finally able to consider putting money away again. And we're right back to separating out everything after savings + the four walls, because it worked so well for us whenever we've done it before.
I've just updated my net worth and efund tracking spreadsheet for the first time in 2.5 months, and it's not pretty. I've been putting off doing it because I know the lines are going in the wrong direction. Yes, they're going in that direction because my husband just came off basically 4 months of no work (he did independent contracting before he started his new job in March) and we've JUST started the new jobs...but I still don't like facing them.
But it's the only way I'll spur myself to do better: constantly looking at those plotted points until my eye twitches.
How to summarize the last two years? It was harder on us than we realized to lose our jobs. I eventually started working part time, then back to full time, and was back to being "horribly underemployed" until about a month ago. I'm still underpaid -- but I'm not underemployed anymore! I also now work for a big bank, so my job is much more stable. I get benefits and employer matching and free banking perks again.
My husband took a series of "survival" jobs, which was hard on him emotionally and mentally. We spent most of last year trying to get some scary health issues of his under proper management. His school program has had a waitlist for 3 years running, so we've had time to get other stuff in order. He is also working on joining the military reserves as a part-timer.
Now that we've both got semi-decent jobs back, we're finally able to consider putting money away again. And we're right back to separating out everything after savings + the four walls, because it worked so well for us whenever we've done it before.
I've just updated my net worth and efund tracking spreadsheet for the first time in 2.5 months, and it's not pretty. I've been putting off doing it because I know the lines are going in the wrong direction. Yes, they're going in that direction because my husband just came off basically 4 months of no work (he did independent contracting before he started his new job in March) and we've JUST started the new jobs...but I still don't like facing them.
But it's the only way I'll spur myself to do better: constantly looking at those plotted points until my eye twitches.
Re: SkaraBrae's Journal
Here we are, six years later. I am still at the same company, having moved through four very different roles in as many departments. My income has tripled since I started. Things are definitely more comfortable financially. I've insisted on keeping the finances separate from my other half, and this has reduced money fights to nothing: at worst we now have discussions over prioritizing some expenditures. Our net worth is 10x what it was the last time I posted here. I'm at the point where I do the numbers up once a year, around tax season.
I'm also not as "extreme" as I was when I first started this journey. I've used the intervening years to learn about my preferred work environment and home life balance, then find people and pursue options that allow me to do that. Covid was a boon for me, as it forced our company to remote work. Not only does this suit me better, but suddenly the fact that I was not in company HQ no longer mattered for promotions and team transfers.
I do not feel the same urgency to become FI in 5-10 years as I did when I first read YMOYL and ERE. This is a relief, as I could not sustain that much effort for this long. But also I have grown lax. The "is spending this money worth it" equation changes as you get older, and as your income changes. It changes as you learn more about what you value. I find myself making (admittedly small) entertainment expenditures that I would never have done before - past me in fact scoffed at those kinds of expenditures. But now I find them worth my while. It's an interesting shift and sometimes I find myself still instinctively thinking something is "a waste of money" when I realize that it may or may not be -- and I'm in the position to re-evaluate.
I'm also not as "extreme" as I was when I first started this journey. I've used the intervening years to learn about my preferred work environment and home life balance, then find people and pursue options that allow me to do that. Covid was a boon for me, as it forced our company to remote work. Not only does this suit me better, but suddenly the fact that I was not in company HQ no longer mattered for promotions and team transfers.
I do not feel the same urgency to become FI in 5-10 years as I did when I first read YMOYL and ERE. This is a relief, as I could not sustain that much effort for this long. But also I have grown lax. The "is spending this money worth it" equation changes as you get older, and as your income changes. It changes as you learn more about what you value. I find myself making (admittedly small) entertainment expenditures that I would never have done before - past me in fact scoffed at those kinds of expenditures. But now I find them worth my while. It's an interesting shift and sometimes I find myself still instinctively thinking something is "a waste of money" when I realize that it may or may not be -- and I'm in the position to re-evaluate.