Budgeting

If you have ever read anything on finances and budgeting, one of the first things that is always recommended is that you track and write down everything you spend money on for an entire month. I have tried this and lasted for maybe a little over a week. The budgeting worksheets that I have seen are very detailed and look time consuming. Finances bore me to death!

However, I knew I needed to figure somthing out to get a handle on the outflow of cash throughout each pay period. It seemed like I was always making ATM withdrawls for gas, going out to eat, groceries, etc. And I had no idea how much I was really spending. So I decided to use a very simple form of the envelope system. I now budget $500 per pay period for extra expenses that are beyond the bills. I have 3 envelopes. I place $200 in the envelope marked Groceries. This includes nonperishable as well, such as, diapers, shampoo, papertowels, etc. Then I place $200 in an envelope marked Gas. And the last envelope has $100 marked for Entertainment. This also includes trips through the drive-thru at McDonald's for me and the boys. I intentionally gave myself a bit more than I thought I would actually need. I wanted it to work. And thus far, it has been an outstanding tool. Anything that is leftover in the envelopes when the next paycheck arrives, goes directly to the bill I am attacking.

The bill that I am currently tackling is the Lowe's credit card bill. If I crunched the numbers correctly, it will be paid off in the middle of October. I get paid every two weeks, and as such, October has 3 paychecks. I can not wait to feel that first taste, little as it may be, of victory!

My next post will be about how found extra income and my current savings plan.

In the beginning. . .

Every story has a beginning and mine is no exception. I could tell a sob story about now I ended up with this debt, but the simple truth is that when I want something, I go out and get it. There was no huge misfortune. No past history of extreme poverty. I am simply an American who never waits for the things I want. After all, we have this unending supply of credit available to us, right?

So let's just get done to the details. I am a woman who likes to cut to the chase. Here are the facts:

Debt as of 24 September 2008
House Approx $150,627.96
Home Equity Loan $ 43,807.17
Minivan $ 19,994.41
MasterCard $ 11,258.77
MasterCard $ 3045.03
Unsecured Loan $ 7,388.03
Wells Fargo Loan $ 7589.09
Wells Fargo Credit Card $ 4765.06
Wells Fargo Loan $ 3480.63
Future Trust Credit Card $ 9914.47
Lowe's Credit Card $ 2543.17
Grand Total $264,413.79

Now, at this point, paying off my home is not even in the cards. I pay my mortgage and will continue doing so, but I am no where near being able to tackle paying off the mortgage early. So let's subtract that and see what I am truly tackling. Without the mortgage the total is $113,785.83 I could own a second home for that amount. I have over $100,000 in consumer debt! Completely and totally disgusting and unacceptable!

After looking at this mess, you may be thinking, "How much income does she make?" Well let's just get that out in the open as well. I currently draw $110,000 salary annually. If I were even a little bit patient, I would have no problem paying cash for the things I want. However, now that I have dug this hole, I am beginning to feel the crunch. I make over $100,000 a year and I feel financially tight?!?!? I can not take this lifestyle anymore. I have put into place some practices already that are beginning to show very positive progress in turning this mess around. And I will begin to share those in my next posts. This post is just about the facts.

I do have some savings. As of today, the savings picture is this:

Savings
401K $16,347.95
IRA $ 4,812.09
Online Savings $ 474.24
Grand Total $21,634.28

There it all is, the good, the bad, and the ugly! Next post will be about the first bill I am tackling and how I began to "budget". And I really do use the word budget very loosely.