Grocery Planning: The Pantry

Can you tell by my pictures that I am desperate for spring? There is absolutely nothing to take pictures of around here.

In this post I want to go over planning the pantry (and by "pantry" I mean pantry, freezer, under the bed, whatever). I mentioned before that I listened to an episode of the Busy Mom's Survival Guide  in which she (Pj is her name) explained the way she did her pantry and menus and such. I liked the way she explained it, so I've kind of combined some of those ideas with my own system.
 

The first step, which I've already done awhile ago but wanted to mention for those who are starting this from the beginning, is to write down all of your typical pantry/freezer items. Things you normally buy and use to make your favorite go to meals, or like to keep on hand. In the last post I talked about picking 15-20 meals for rotation. So I'll be making sure all the ingredients I need for those meals are on my pantry/grocery list.

For us this includes things like rice and beans, canned veggies, condiments, dried pasta, canned tomatoes, corn meal, flour, yeast, butter, etc. I am focusing on things that can keep for long periods of time, since I want to start a 3 month supply. Don't worry about fresh things right now. Just write down long term storage items. (Yes, butter is probably considered a "fresh" item, but I buy enough for a whole month and it can be frozen, so it gets put on my pantry list.)

Next, an idea I'm incorporating from PJ is to write down how many I want to keep in stock at all times. So let's say I want to keep 3 months worth of canned tomato sauce. I will figure out how many cans of tomato sauce we would go through in a month (let's say one large can a week, so 4/month) times 3 = 12 large cans of sauce for a 3 month supply. So now my list looks something like this:

20 lbs Rice
20 lbs Beans
12 28 oz cans Tomato Sauce
48 cans Green Beans
 And so on.

If you're not looking to create a big stockpile, just figure out how much you want to have on hand for the week, or two weeks, or whatever stretch of time you prefer and would be easiest for you.

Now when I am getting ready to go to the store, I can print out my list, look in my pantry and any items that are below quota get the number I need to buy written next to them. If I only have 30 cans of Green Beans, but my list says I want to have 48 cans, then I need to buy 18 cans in this store trip.

If you are just starting out and wanting to build a large pantry you can either budget and spend the money up front to get the whole pantry stuffed, or - the route we'd probably all choose - do it slowly over time. If your budget only allows you to buy 3 extra cans of Green Beans this week, buy 3 extra cans. Then the next week you can buy 3 more. It will build up over time, you can do it!

Make this is as easy as possible for yourself in how you list and sort your items. If you like to group a-z, do that. If you like to group by category, or by aisle in the store, do those. Make it a system that will be easiest for your brain to work with. I prefer by category. If you can arrange both your list and your pantry in the same way, excellent! It will make it much easier and quicker when you go to check stock.

**Bonus points: If cooking from scratch is your goal, take a look at your list and try to find items on there that you can start making yourself. If you typically buy enchilada sauce, you can start making your own with just some flour and chili powder, tomato sauce and water. Bam! Cross the enchilada sauce off your list and just stock the ingredients. Or make your own chicken stock and freeze it instead of buying. Try one thing at a time so you don't burn out or get overwhelmed. **


I am going to be including toiletries and personal items in my 3 months supply. Since those won't need to be rotated as often, I will just purchase a few extras each time I go to the store. 

And that's it for this step! Super simple! It might take a bit of time to put together at first, but once it's done it's done. If you can get it typed up then all you have to do is print it out for each shopping trip.

To recap:
Pick 15-20 (or however many) meals based off ingredients you can store.

Write a list of all the ingredients you need to make those meals.

Figure out how many of each item you need for your desired storage time (Two weeks, one month, three months?), and write that number next to each item.

The idea with this plan is that if there is ever an emergency (crazy weather, or job loss) then you know you will be able to make those meals with what you have in your pantry for the amount of time you stocked for.

Just a note - my "pantry" isn't one specific place in my house. I have a tall cabinet in the kitchen and a hall coat closet that got converted with shelving. If you are wondering where to store a stockpile of goods try places like linen closets, bedroom closets, under the bed, under the dresser, etc. It doesn't have to be pretty and perfect. 


Go forth and make a list! In the next step I'll talk about a price book and shopping for the best price.

Happy Planning,
Meg

Grocery Shopping: The Menu

I am going to try to make these posts and explanations as clear and understandable as possible. If anything is confusing or you need me to clarify, please let me know! It's kind of a work in progress as I see how things work for us at this stage in life, so it could be changing as we go.

I thought I should start out with my goals for the pantry and our food life. I already cook from scratch as much as I can, so that is a big part of our life and I don't consider that a goal. But you might, so please feel free to write up your own goal list if you want to do this along with me.

My Food Goals:

 - To stock our pantry to have 3 months worth of food for emergencies, to facilitate surprise crowds, or to help others out in times of need. I would like this to include water, so I need to find a place to store large amounts of water if I can.

- To save time in planning our menus and lists. And hopefully get down to shopping once a month.

- To have less waste. I've been pretty bad about tossing things lately.

- To save money on our groceries. Over the last year I have spent an average of $800 a month on groceries. Considering I used to spend $400 for 5 people, that was a major jump. Now, we do have 6 people eating full meals, and the boys are all getting bigger and eating more so I do realize that we are spending more for a reason, but I am hoping a better plan can lower us to about the $600 or under range (and I will admit our spending went up because the junk food consumption did...).

- To get our diet back on track and get rid of the junk food that has crept in while I was being lazy.

Planning Menus
I had originally planned on talking about the pantry first, but it made more sense to go over menus first, since that's why you pack the pantry!

My routine lately has been to write down whatever sounds easiest at the time, then shop for that. My menus have almost been the same from week to week lately, usually including enchiladas, a crock pot meal, and spaghetti. Which are all fine meals, but when I put the same things on the menu every week it gets boring.

So, my new plan is to come up with 15-20 of our favorite meals and rotate those. I might even try to come up with a meal for every day of the month and have the same menu every month. My plan is to use meals that involve mostly pantry items, since my goals is to have a stocked pantry, but you must rotate and use your pantry goods on a regular basis. I will have some days that are special meals, or trying new meals, but for the most part I am trying to simplify and focus on pantry building.

As far as what meal to put on what day, this is how I usually do it:

I usually plan for two weeks, since that is my shopping schedule right now. I am going to try to get on a one month routine, aside from quick trips for milk and such.

I use a blank calendar for my menus. You can print one out from your email/calendar program, or I'm sure you could find something on pinterest.

Mark down any special days like birthdays, anniversaries, etc that would have a special menu or going out. For example, we have a family dinner coming up at my mom's to celebrate some birthdays so I will put "OUT" on that day. If you will be cooking a special dinner, write out that menu on that day.

Make note of any days that need to be a quick meal or easy meal. If you have soccer practice every Thursday night, then a crock pot meal put on the in morning will probably be easier than making a 4 course meal. My cousin comes over every other Wednesday, so on those days I try to plan a crock pot meal or something quick so I can spend more time visiting and less time cooking (and cleaning up).

Fill in all the other days that are still blank. Try to include meals that will use leftovers from previous meals, or produce that needs to be used up. If I have leftover chicken from Wednesday, I will try to use it in pasta salad or enchiladas on Thursday or Friday. If you have some peppers that are starting to look a little sad, try to find a meal that will incorporate those so they don't go to waste.

That's pretty much it! So to recap:

Have a set number of go to meals that rely mostly on ingredients from the pantry. Fresh things can be a bonus as they are in season or the budget allows.

Use a blank calendar and fill in special meal days.

Fill in "busy" days that need easy meals.

Fill in the rest, again, still using meals that are based off of pantry staples.

Now, make a note of breakfasts and lunches, and snacks you want to have on hand (or preferably make). For us breakfast is almost always eggs and toast, in one fashion or another, or oatmeal/pancakes. Lunches are sandwiches or leftovers or hot dogs.

In the next grocery post I'll talk about my plans for the pantry and getting it stocked.

Happy Weekend!
Meg

How I Plan Menus

Planning ahead is one of my big ways to keep on budget for groceries. I thought I would share how I do it for anyone who is curious or wanting to know how to start.

We shop every two weeks, with one big trip at the beginning of the month for the bulk items and things that last awhile plus fresh stuff for two weeks, and the second one for just the fresh stuff like milk and produce.

I know everyone says to "shop the flyers" and while I do pick up certain things we use if they are on sale, I don't base my menus solely on the flyers themselves.

I start off with my menu sheet. It is a list of meals we like, broken up into categories like "Chicken", "Soup", "Meat Free", etc. Those make up the first column. The second, third and fourth columns are Side Dishes, Breakfasts and Snacks respectively. This master list lets me pick pre-approved meals that I know we like (or mostly like) without having to wrack my brain every week trying to remember things.

At one point I had set lists that included the main dish and all the sides in one chunk, but I don't always want greasy potatoes and salad with my chicken, so I broke it up and now just pick a few sides to go with a main. The lists of breakfasts and snacks are really just to remind me what we need to have on hand such as eggs for breakfast and fresh fruits for snacks.

Master Grocery List

Next, I print out a calendar for the month from my email program and my Master Grocery List. Printing the calendar just insures that major holidays and birthdays are listed out so I can plan around them. You can just use a piece of paper that says "Monday, Tuesday...." on it if you'd like. Once the calendar is printed out I add any upcoming appointments so I know if I need to use the crock pot or something that day if I won't be home until later. I have a copy of my grocery list available to download here if you'd like somewhere to start.

So far we have three pieces of paper:

• The meal list
• The calendar (or blank page to write down the week's menu)
• The grocery shopping list (or blank page to write down what you need)

 Now it's as simple as filling in the menu. Since we shop every two weeks, I make a plan for two weeks. Since I am using what I have this month, I will be choosing Main Dish items that include the meats and ingredients I already have and will be trying not to buy too much.

For example, I have a pack of chicken leg quarters, so on Sunday we will have BBQ Leg Quarters, Crispy Potatoes, Rolls, and probably a salad. Monday I will probably try a recipe for Chicken Enchiladas that uses Chili Verde sauce (since I have chicken, tortillas, and the chili verde sauce already) and serve them with rice.

I try to leave at least one night a week open for eating up leftovers. If we get to that night and don't really have leftovers then I will do something simple like sandwiches since I usually have the makings on hand.

Once I have written down my menus, I go through each day one by one and mark on my grocery list what I don't have. Since I have "salad" on the menu for Sunday, but I am out of lettuce, I need to mark that on the list. I'm pretty sure I have everything I need for the Enchiladas, but I will double check the recipe to make sure. I continue in this fashion for the rest of the week's meals as well. Make sure to double check all the ingredients of your main dish - including spices and condiments - and mark those on the list as well. If your Chicken Pot Pie calls for carrots and mustard, you'll need to make sure you have those on hand or put them on your list to avoid making a last minute trip to the store.

Next I will go through and mark down our regular staples that don't really appear on the menu.  Things like milk, butter, eggs, cheese and flour. Things we use every month. That was actually the reason I made the Master Grocery List, so I could look at it and be reminded to check the amount of yeast (or toilet paper, or oatmeal) I had left and if we needed to get more.

After that I mark/write down any extra or special things we want like chips, or if we want corn dogs, or things like that. Things that aren't necessary, but are a nice treat if there's room for them. What is or isn't a need for your list will depend on your family. Some people can't live without ice cream *cough* while others can.

One extra step I do is to write down the prices next to each thing I have checked on the grocery list. I keep a price book and know what the general prices are, so if I have marked down to get 5 gallons of milk that are usually $3/gallon, then I will put "15.00" next to the milk item. When I am done making my list then I add everything up and see where I am at. If I think it's a little high, or it will just plain put us over budget, then I will take out anything we don't really need (like the chips).

Tada! That's really it. And it really doesn't take much time at all once you get the system down. I can have menus planned and grocery lists made in about 15-20 minutes most times. The hardest part is just picking what to eat.

I usually keep the Master Grocery List on the fridge so we can mark things off during the week as we run out of them.

So, to recap, or the short version since I'm not sure my rambling on makes any sense:

• Start with a Master Menu plan that lists the foods your family likes. This will make planning menus faster and easier.
• Fill in your menu, using the meal list, on a calendar or piece of paper
• Go through your menu and mark down any ingredients/items you will need but don't have onto your grocery list (do you have enough chicken for enchiladas? tortillas? cheese?)
• Next, write down staples on your grocery list that you need that aren't on your menu already (eggs, flour, etc)
• Finally, write down any extra or special things onto your grocery list (like snacks or treats)
• Keep a running tally of your prices, if you can, so you know where you stand before you get to the store. This will help avoid the "Oh, that was more than I thought" problem at checkout.
• Go shopping! And stick to your list! 

A couple of notes:

• I try to leave a bit of room every month for things that might go on sale, like meats or sodas, or things like that. Stocking up when I can has saved us a bit of money in the long run.
• I only really plan for dinners, since breakfasts are usually eggs or oatmeal and lunches are leftovers or sandwiches. But if you need to plan for breakfast and lunch each day as well, put them on your menu and add the items needed to your list.
•  I have tried a few times to change my system and it usually tends to blow up in my face. This is the system that works best for us, so maybe it will work for you too.

But don't be discouraged! If you try this for a few weeks and you're still having trouble try changing it a bit. Maybe you'd work better as a "from the sales flyer" family. Each family is different, so each budget and shopping method will be different.

I can tell you that staying out of the store is the best way to save money, so try to go once a week, once every two weeks, or even once a month if you can stretch it that far. And of course, you will save a ton of money buy getting things in their rawest possible form - like produce and meats - rather than pre-prepped stuff.

I hope that wasn't too confusing!

Happy Menu Planning,
Meg

Make It From the Freezer March

Ok, so that's not the freezer, but you get the idea.

March is our month to get back into "Pay off debt" mode and start attacking our house with a crazy vengeance.

Because of that, and the fact that I really can NOT fit anything else in my freezers, and that we will have a new baby I am declaring March a "Make it From the Freezer" month.

My plan is to buy as little groceries as possible (we have PLENTY of meat) and use up what we already have in the house. We should really only need to buy fresh stuff like milk and eggs and fresh produce, and a few other regular monthly staples.

I am so excited about this. I love trying to find ways to save money and live frugally. We got a little off track over the holidays (we usually do) and have added a little padding to our monthly budgets. Now we will try to get back into our tighter routine and we realized that it is really nice when we have to be creative.

So, I figured I would share what I have on hand and what some of my ideas are for the month.

Perhaps some of you would like to join me in this challenge this month? To see how little we can spend on groceries and how much we can make from just what we have?

I have two fridge/freezers, one in the kitchen and one in the garage. I took an inventory of the freezers and pantry and this is some of what I have:

Meats:

• Bacon
• Beef Round Steak
• Breakfast sausage
• Boneless Skinless Chicken Breasts
• Chicken Leg Quarters
• Chicken Thighs (bone in and boneless)
• Whole Chickens
• Ground Beef
• Cooked and uncooked Ham
• Cooked and uncooked Turkey
• Meatballs
• Pork Roast

Prepared (or nearly prepared) Meals:

• Bean, Rice & Cheese Burritos
• Calzones
• Chicken Pockets
• Chili
• Chimichangas
• Clam Chowder
• Tortilla Soup
• Chili Verde Sauce

Fruits/Veggies:

• Canned Apples
• Cranberries
• Frozen Grapes
• Peaches
• Plums
• Strawberries
• Chopped Tomatoes
• Cooked Pinto Beans
• Peas
• Pumpkin Puree
• Shredded Zucchini 
• Canned Crushed Tomatoes

Breads, Baking Supplies & Other Ingredients:

• Shredded Coconut
• Nuts
• Banana Bread
• Dinner Rolls
• English Muffins
• Sourdough
• Leftover German Chocolate
• Cornmeal
• Beans
• Rice

The Plan:

I don't know exactly what my menus will be right now, but some of the stuff like the prepped meals are easy to plug into the calendar and I am leaving those for the week that Baby comes. The fruits and baking supplies will probably become things like cobblers, muffins and other snacks, along with smoothies and sauces.

Since I have such a wide range of meats to choose from thanks to sales and our love of the marked down section in the store, I have lots of choices for meals. I can make lots of casseroles, tacos, salads, soups, and I have been given permission to try enchiladas (yay!) which I think I will do with the Chili Verde I made and froze last week.

My usual monthly budget for the 5 of us is $400. This is just for food - I break out the household items like diapers and toilet paper separately just so I can keep track easier. Because of what I have on hand already I will be dropping my budget this month to $300, but I think I can really spend less than that for our staples. I did want to leave a bit of wiggle room just in case anything goes on a good sale (I am hoping for coffee to do so!). I do need to make a bit of room to buy some corned beef, because I can't go without it once the sales start. ;)

I can't wait to start planning my menus for the month! I think this will be really fun.

So, who would like to join me this month in using what they already have?

~Meg

YEEEEEHHHAAAWWWW!!!

I had a different post planned out for today, but it will have to wait because

Today we PAID OFF OUR CAR!!!!!

This means that aside from our mortgage WE ARE DEBT FREE!!!

Oh, such a wonderful feeling, knowing we won't have to pay that stupid car payment anymore.

This is the one benefit to Ben working all this overtime. We were able to pay it off not only 4 years before the end of the loan, but an additional 6 months ahead of what we were hoping for anyways (we were shooting for the end of the year).

And now I'm off to Happy Dance!!! :D

HAPPY, HAPPY WEDNESDAY!!!
Meg

EGE: Third & Final Week

Honey Mustard Porkchops - recipe coming soon.

Yes, I know there are four weeks in this month. But I don't shop during the last week - to save gas and to eat up what we have in the house.

So, that's it. The grocery month is over. I'm done with the budget. I've spent all I'm going to spend (unless we have an emergency). So how did I do?

Month's Budget: $350
Week 1 Spent: $119.30
Week 2 Spent: $96.96
Week 3 Spent: $75.63
Total Spent: $291.89

Wait. What? That puts me under budget by $58.11! So the month I actually cut the budget by $50, I spend an EXTRA $50 less. Gosh.

This month's experiment has really opened my eyes to the way I was shopping. As a reminder the main part of the experiment was not cutting the budget, but only buying what was on my pre-approved list. Rather than playing a guessing game of what to buy each week, I knew ahead of time what I was allowed to get during the month (ex. 1 25 lb bag of flour, 12 cartons of eggs). So how did I do on that?

I did pretty well with most everything. If I went over on a certain item's price it was because the price was a bit more than I budgeted, rather than buying too many items. I did fudge on a few things and bought things like lettuce, but didn't buy carrots or celery (since I still have some) to even it out.

I also bought a wee bit of candy... But it was for Ben. ;)

Here's the breakdown:
I went $.78 over on milk because the price went up.
I went $3.98 over on coffee because it's the highest stinkin' price I've ever seen it with no sales in sight.
I went $2.66 over on soda because I was a bad girl and bought Cherry Pepsi which was not as good of a deal once I got to the register as I thought it was. >.>
I went $.78 over on meat because... well because I wasn't using my calculator yesterday. Whoops.

I also bought lettuce, sunflower seeds, and candy, which weren't on the list but there were 5 things on the list that I didn't buy at all.

I really enjoyed this experiment. We were talking the other night how we've been eating better this month than we have in previous months. I knew exactly what I could get, so I knew exactly what I would have to make things with. One of my biggest challenges was only buying meat if it was under $2 a pound so that meant buying things that I wouldn't usually buy and I had to find/make up recipes to fit accordingly. Which was a really nice to break from our usual food.

I think I'm actually going to keep this system for awhile, with a few changes.

• A set amount for produce, rather than buying certain items. This will allow me buy what's on sale and fresh and hopefully get me to the farmer's market.
• A set amount for condiments and spices. To cover things we might run out of and allow me to stock up on those $1 sales.
• We drink waaay more milk that 2 gallons a week if given the chance.

I have to say thank you to my mom-in-love for supplying me with farm fresh eggs when she could. It allowed me to buy only half of the amount I needed, and saved me $24! Plus fresh eggs are so superior in taste to store bought. :)

Happy Eating,
Meg

One Year Later :: Benefits of Budgeting

This has nothing to do with this post, I just figured y'all needed some yarn. ;)

It's been about a year since we started an official budget, and today I thought I would talk about our journey so far, and the changes I've made in how we do it - both since it's the "anniversary" and because some people are interested in hearing about it.

Being on a budget has:

- Made the year fly by so fast. I can't believe we've already been doing this for a year. Not spending every week waiting for the paycheck, biting our nails, makes life so much more enjoyable and freeing.

- Opened our communication with each other. We talk about our finances in detail now, which is something we didn't really do before. We're in agreement on every single thing we spend, and that's the important part. I'm not sure what Ben would say, but I feel it's really improved our marriage to be even better than it was.

- Allowed us to pay off over $25, 000 in debt. We payed off two debts in the first month by putting our heads down, getting serious, and not allowing ourselves to spend the tax refund purely on toys (hehe). We also worked really hard to pay off a third debt by November. And now we're on our way to paying off the car - our last debt besides our house! - trying for the end of the year. If we followed the regular schedule, we'd still have 4 years left on the car.

- Allowed us to plan for the yearly/bi-yearly expenses that come up like car registration and insurance premiums. It's so nice not scrambling around trying to find the money when the bill comes.

- Allowed us to have one of the best Christmases ever last December. We saved all year and put it into our Christmas fund, and we were able to easily and guilt-lessly buy each other presents, and spoil our kids. It was great.

- Allowed us to save up a sizable emergency fund. So if this wind storm we're having as I type decides to finally take our fence that has feebly been hanging on for the last few months, we can replace it without a problem to our finances.

The Evolution

New & Improved!

I've reworked and simplified the budget sheet since my original post. I realized it was just a little too technical, and I was not only having to explain it to Ben, but I myself would get confused. Now we base it specifically off of what's coming in, not what I expect.

The paychecks go in the boxes on the right, and they total up in the box at the top. Then as we add the budgeted amounts for each category, the total of those subtract from the income, telling us what's left. Right now, any extra money gets thrown on the car.

Then, as we spend the money, I add the amounts to the middle column "Spent". The sheet subtracts the spent amount from the budgeted amount, and tells us what's left.

For our annual/bi-annual expenses I put them in the box on the top right. Then I just divide the numbers by twelve so we know what to put aside each month.

I'm really excited for this month because it's a three paycheck month. That will allow us to get a full month ahead. Meaning that the checks we get in April won't be spent until May. Up until now we've had to use the last paycheck of the previous month and the first check of the current month to figure out the budget. And if that first check didn't come in until the second Friday, we'd have to wait to finish the budget.

Every time we talk about being on a budget and how nice it is, it always comes up that even once we pay off our debt we never want to go back to pre-budget. It's hard, sometimes, knowing we can only spend x amount on something. But it's been so wonderful to know exactly where our money is going, and working hard to be debt free so that we can breathe and live our lives more freely.

Since I've had a few people ask about it, I'm uploading a blank budget sheet for y'all to use if you'd like. You can find it here:

BudgetDownload via Google Docs

You can either use it on the site itself and print it out (File button>Print), download it to your computer (the File button>Download As) and use it, or just print it out and do all the work with a pencil and calculator if you'd rather. You can easily change the categories by typing in your own. The sheet will auto-calculate all the numbers for you as long as you leave the top "Income" box and the "What's Left" boxes alone. If you'd like a completely blank page for use with a pencil, just delete all the zeros in the "What's Left" column and print it out. Just don't save any changes you make!

Have a wonderful Wednesday and Happy Budgeting!
Meg

EGE: Week 2!

I'm so ready for summer fruits!

It's week two of the Extreme Grocery Experiment. So far, so good!

Really, just knocking off $50 hasn't been hard. The hard part has been sticking to my "you can only get" list and not getting the extra fun stuff if I've got money left in the budget. Usually I'll get corn dogs or something for the boys if I'm under the week's budget. So it's been really difficult not to say "Ok, well I've got some money left, so let's get this." This month is about sticking to the approved list, and spending as little as possible.

Monthly Budget: $350
Week 1 Spent: $119.30 (I had estimated $190!)
Week 2 Spent: $96.96
Left: $133.74

The first week I bought most of our dry staples for the month like flour, beans, rice, pasta and our canned/frozen things. This week was the weekly perishables like milk, eggs, produce, and a package of meat. It's been interesting sticking to this, but it's given me better ideas for future months.

This week's Menu:
Monday (yeah, that was yesterday): Spaghetti
Tuesday: Chicken salad - using leftover chicken from Sunday and lettuce we need to eat. Homemade buttermilk ranch dressing!
Wednesday: Carnitas (pork tacos) in the crock pot - Pork from the store, tortillas on hand
Thursday: Tuna sandwiches?
Friday: Beans & Rice - Either refried, or something other variety.
Saturday: Undecided
Sunday: Sunday chicken, potatoes, bread, and a veggie.

And as a random note: When buying name brand butter - because there was a blinky coupon that made it cheaper than store brand - check the inside of the box when you're done with it. I bought three boxes last week and as I was emptying out the last one today (after I got back from the store of course) I found coupons for more butter. Naturally, the other two were long gone since I took the sticks out and I had not thought to check.

Extreme Grocery Experiment: Week 1

The Green Beans emerge!

 Today marks the first full week of April, and thus commences our Extreme Grocery Experiment. It's going to be an interesting month.

I'm changing my grocery shopping days to Tuesday, to take advantage of the sale fliers by knowing what's actually on sale before I get there. 

Grocery Budget for April: $350
Estimated Spending for week - $190. This is for the monthly store-able staples I've allowed myself, any meat that's $1.50/lb or less (up to $8 worth), and the week's perishables like milk, eggs, produce. I won't bore you with the whole list... Yet.


The Menu Plan:
Monday: Sausage & Potato Casserole - using the rest of the potatoes we have and sausage in freezer
Tuesday: Refried Beans & Rice, Tortillas - Using dried beans and rice on hand, tortillas on hand
Wednesday: Teriyaki Chicken & Rice - Using leftover chicken, with plain (or maybe fried) rice
Thursday: Cheeseburger Mac - Buy bacon & cheese, use pasta and ground beef on hand
Friday: Biscuits & Gravy (or breakfast of some kind) - Buy bacon, use freezer sausage, make biscuits
Saturday: Undecided
Sunday: Sunday Chicken, french bread, potatoes, and a veggie (I'm starting a new "Big Sunday Meal" tradition. We did it last night and it was really nice.)

That's the plan!

Extreme Grocery Experimentation

Picture by MFinderup

I've been thinking about this idea for a few weeks now, and it was solidified last night.

Ben & I were talking about how we're trying to pay off the car this year (the original loan would have gone to 2014!), and how we might need to get a little extreme to do it, and I was telling him my idea for our grocery budget.

Every month we take our income and tell it where to go in our budget. What exactly we will spend it on. X for Mortgage, X for Utilities, X for Gasoline, etc. And it clicked in my head: Why can't I do the same with our grocery budget?

We've been doing groceries on about $400 a month for the five of us. My usual way of doing things has been "Ok, I have $400 so let's just get whatever we need until I hit that limit". Which sometimes leads to $50 left for the last week of the month.

I've been a bit better lately, with only buying for the meals of the week and sticking to a weekly budget, but that hasn't allowed for stocking up and keeping extras on hand - which I like to do.

So we've decided that for the month of April we're going to try this experiment.

I've looked over the things we've bought in the last three months and added up how many of each item. How many gallons of milk, cartons of eggs, etc. From that I've picked an average number and we will be buying ONLY that amount of items in April. If we run out, we have to wait until the next month.

For example, I can get 8 gallons of milk (2/week), 14 cartons of eggs, 1 25lb bag of flour, 4 lb pasta, 15 lbs of meat at $1.50/lb (that's usually the price I buy it at, if not lower).

By going through it last night, we figured out we can drop our budget by $50 so far. We're keeping a lot of our "luxury" stuff for now just to make sure we don't hate the process. I figured we can try it for a month or two and if we feel like it, cut back even more. Or go back up to our usual budget.

Ben brought up that this will allow me to stock up on our non-perishables and freezer storables quit easily and quickly. If I am buying a big bag of rice every month, or 4 pounds of pasta every month - whether I need them or not - then we will soon have a surplus. Either allowing us to get through a lean time if it comes, or letting me cut the budget of a future month so we can put the extra on debt.

I'm really excited about this plan, and can't wait for April. I'm hoping we can soon cut down even more. The garden we have planned will help a great deal with this as well.

And I think this will play a big part on the road to my goal of self-sufficiency... But that's another post.

Happy Tuesday,
Meg

Repost: The Tax Refund Debate

 Hey guess what time of year it is? Tax time! Aren't you excited?? Those in the United States only have a month left to file their tax returns. Remember that if you owe money, you need to file the return even if you can't pay the money right now.

If you are getting money back, though, I have a post for you!

We filed our taxes already and got our refund. It's not as big as last year of course, but we used it to put a sizable chunk towards paying off the car, and the rest is being used for the Great Backyard Landscape of 2011 project. I'm re-posting last year's Tax Refund Debate post, for anyone who might be getting a refund and is trying to figure out what to do with it.

The Tax Refund Debate

Now on to the taxes! Because we are first time home buyers we get the $8000 homebuyer credit. Which means combined with our amount for having three kids and one income, all the other stuff, etc. we are getting a sizable refund. So naturally, we've had to figure out what to do with it all. 

BLOW IT ALL ON TOYS! WOOOHOOO! Heh. Yeah right. As much as I would like to get all the "toys" we've been wanting, we have to be responsible adults (damn).

We knew for sure we wanted to build up our savings. Ideally we will have at least 3 months expenses saved so that if the unforeseeable happens (such as a job loss or medical expenses) then we'll be able to float for a period of time. Be realistic for your situation. It usually takes longer than a month to find a new job, and not all medical companies will let you put your bill on a payment schedule. Save up a sizable amount.

Even with saving 3 months of expenses that still left us with quite a bit, and our list of things we would like to do. I'll share with you what I did so that maybe if you're facing the same dilemma (be it tax refund or other windfall) then you can use the same idea. All the following figures are fake.

I had originally just sat down with Ben and said, "OK, this is how much we're getting. What do you want to do with it?" But that... didn't go so well. Poor planning on my part. I forget that I need to spend my time thinking about it and making visual presentations to give him a better idea of what I'm thinking, rather than thinking out loud and not making sense. The next day I pulled out paper, a pencil and calculator as well as our current debts and wish lists and went to work. Then I threw it all into Excel to make it pretty and to be able to change numbers and have it auto-update the rest.

I set up possible scenarios for spending the money. In each scenario I listed certain things to do (like paying off the truck) and the total of them, then subtracted that total from our refund amount. After that I calculated how much one, two, and three months worth of savings would be based on what our monthly expenses would become after paying off certain debts. Once that was done, I then subtracted each amount of possible savings from the amount left from paying off debt. So my worksheet looked like this.

At the top you see the refund amount and monthly expenses based on what we would or wouldn't have to make payments on. Then for each scenario you see the item(s) to be payed off, the total of that, as well as the total of each month of savings. The bold numbers in the colored sections are what is left after all the math is done. This is money to either play with or additional money to put into savings. Our first choice is Scenario III with 3 months of savings. But that depends on what else comes up between now and then. We will probably use the leftover money to take a wedding anniversary vacation in May and hopefully build the shed and chicken coop with it. Or something like that.

2011 Update: Once we finally got our refund, we used it to pay off the truck, the credit card, put two months of expenses in savings, and start paying off a family loan (that we payed off completely in November!). 

Are you getting a refund this year? What do you plan to do with it?

Happy Taxing (unless you have to pay),
Meg

The Sinking Funds, And Why They're Awesome

No, we're not getting a new kitchen sink any time soon.

We got our car registration renewal yesterday. It's a fairly large amount of money. Ok, actually if I can just rant a little bit.... $237 for a STICKER?!? Really California? Really? On the bright side, it is actually down from last year... *rolls eyes*

Anyways. Yes, large chunk of money. But we can pay for it no problem! Without having to forgo food or diapers or pray for a bonus.

Back in my budget post, I talked about how we were adding up our yearly expenses and dividing that number by 12 to get a monthly amount to set aside. Because we've stuck to our budget and done that, we now have enough to cover the car registration (and the smog check. We just bought the car a year ago and they want a stupid smog check...)


I later learned that what we're doing was adding to what are called "sinking funds", defined as such:
A fund accumulated to pay off a corporate or public debt.

Obviously we don't have a corporate or public debt, but the idea is the same. You save up the money to pay it off in a big chunk later.

I created a spreadsheet using the instructions from Family Balance Sheet, and added and subtracted categories to fit our needs. The above is our sink funds. We are able to do it all from one savings account (with the exception of the E fund. That is in a separate account that earns higher interest.) By using the spreadsheet I can see how much money we have in each "fund", compare it to our savings account balance, and any extra amount goes onto the "KS Savings" line. This way I know what we can and can't touch for each expenses.

It's worked out beautifully. In fact, the sinking fund is what made it possible for Ben to build the shed. I love the spreadsheet as well. At any time I can pull it up and see our balances on anything we have. Our debts get a strike through when we've paid them off, so we can see our progress. It's great. I highly suggest making one for yourself.

How And Why: Check Register

Note: I am NOT professionally trained, nor a professional financial expert in any way. Just a semi-ex bookkeeper who is now taking care of the family finances, and who wants to share how she does things with anyone who's interested. 

It's been awhile since I've done a financial related post. Today I thought I would go over a check register (or ledger), how to keep one, and why you should. This is probably because check registers have been on my brain since I am debating changing from Quicken to just good ol' Excel. But more on that later.

Check Register 101
Before I get into the how and why, let's look at what a check register is. Dictionary.com defines a register as

"a book in which records of acts, events, names, etc., are kept."

A check register, therefore, is just a book were said records are of checks, or financial transactions. I know now-a-days most people don't use actual checks much, but any transaction from your checking/savings/whatever account, be it with debit card, ATM withdrawal, online transfer, etc, can qualify as a "check" and needs to be recorded.

The How
Keeping a check register is actually pretty easy. It might be a little confusing at first for someone who has never done it, but once you do a few entries you'll have it down.

A check register consists of a number of different columns - from basic registers with just a handful of columns, to very expanded ones consisting of many, many more. Each column has a title and describes what will be going in those columns. A very basic check register will look something like this:

You can see there is a column each for the date, the check number, the payee, the payment amount (if applicable), the deposit amount (if applicable) and the balance once the transaction is done. In this example you see that on August first there was a check, numbered 1055, made out to Bob's Grocery for $50.00, and that after that check was written there is $50.00 left in the bank account.

Each transaction will go along the same lines, putting the payment or deposit in the appropriate column, and totaling the new balance as needed. To do this you would add or subtract the amount (payment or deposit) from the balance on the previous line. (In the example you see $50.00 has been subtracted from the $100.00 "starting" balance.)

More advanced versions might have columns for a "Memo", where you can put a description of what you bought ("diapers & milk"), and/or columns for a category so you can keep track of your spending for things like "groceries" or "rent". Extra columns like that come in handy if you're trying to stay within a budget.

That's it! Mostly. Just fill it out to keep a running total of what you have left to spend. If you are not using a check then you can replace the check number with maybe a transaction number from your receipt, or most of the time I just put "debit" or "online", just so I know how it was payed. The "starting balance" at the top is what you are starting with when you begin a new register. It will either be the ending balance from your last bank statement, if you're starting from scratch (be sure to add in any transactions you've done since the statement ending date), or the ending balance of your previous register, if you're just starting a new one.  And now, the why!

The Why
A lot of people don't keep check registers. A lot of people say things like "Oh, I keep a running total in my head" or "Well, I just check my balance with my online bank access". And that's all well and good. Until you forget. Or until it's been 3 months later and your electricity company calls you, screaming that you never payed that bill for $46.83, and you don't have any backup of when you payed it and how.

There will be a day that you forget something. If you're one to check your balance online, it can take a few days for the transaction to come out, so you might think you have more money than you really do and overspend. If you're a "total in my head" person, what happens if you have a crazy busy day and something slips? Best case scenario, you're just a few bucks shorter than you thought. Worst case scenario, you've overdrawn your account and now you have overdraft fees, bounced checks, and they're declining to take your debit card for that loaf of bread and eggs you really need right now. It happens, even to elephants.

So, to avoid all that, just keep a check register! It doesn't take much time. You could save all your receipts for the week and update it once a week, or update it at the end of the day. Whatever works best for you. Just do it! It will also give you the opportunity to do a bank reconciliation. But that's another show post!

The Versions and Where to Get One
Ok, I've got you convinced. Now you really want to keep a register of your own. But where to get one? How? You've got a LOT of options. Honestly, you could get started with just a piece of paper, a pencil, and a calculator. Just make a grid with columns and a couple of rows, like the example above, and fill it out! If that's a little prehistoric for you, try these options:

•  If you get checks from your bank, or another company, most of the time they come with a little checkbook sized register. Use that! Free with the purchase of checks!
• Most office supply stores carry various sizes of register/ledger books. They'll be anywhere from about $8-$20 depending on the size and complexity. You might even be able to find one in the stationary section of your grocery or drug store.
• Have Excel, or another spreadsheet program? Make your own register, just like above. You can even use Google Docs (just like above). And if you're really tricksty, you can make the Balance column do the math for you with a formula! If you've already got the program, or want to use Google Docs, then it's free!
• There are various online sites that offer check registers. The newest kid on the block, that is all the rage, is Mint.com. Some are free (like Mint) some are not. If that's the way you want to go, cool! Personally, I get a little weirded out with the idea of putting all my financial data onto a website. (It could be argued that it's all there via my online bank access, but still. It just wigs me a little bit.)
• Software, software and more software! There are numerous pieces of software that will do all the tracking for you (well, once you input it of course). Quicken is one, which I use, but there are many others. They are a little pricey (about $40 and up), but they can track multiple accounts, assets, liabilities, generate reports, sing and dance. It depends on what you want to pay for.

I have been using Quicken since I started a checking account (around 16) and while I like it, I'm not quite "feeling it" anymore.  I think it is just a little too much for what we need now. For one, it runs everything by date - which is how accounting works! - but sometimes I will buy groceries at the very end of the month and they count for the next. So when I run a report to see where I'm at, the totals are off. I have been running all our budget tallies through Excel anyway, so I might as well just move everything over rather than have 20 different programs to track the same thing. But I digress.

If you'd like to go the spreadsheet route, but aren't sure how to get started, I am in the process of creating a few different versions, with and without spending category columns, and will let y'all know when they're done so you can get a shiny copy of your own! 

How Planning Ahead Totally Pays Off (Literally)

BAM! See that? OURS! We paid off Ben's truck and now it's OURS! No one can take it from us! (Well, you know, unless it's stolen...) Because we had a plan for our tax return before we got it, we were able to pay of Ben's truck at the beginning of the month and just got the title the other day. We payed it off 7 months early (which really isn't that early, but hey. It's still cool.) This sounds horribly egotistical, but I'm really proud of ourselves. :D Now on to the next one!!

Why A $1000 Emergency Fund Just Isn't Enough

I read a lot of books and blogs and websites about personal finance. A lot of "experts" say that you should have at least a $1000 emergency fund in place while you pay down your debts. When Ben and I were talking about our budget the other day I mentioned this and said that I really was not comfortable with a $1000 emergency fund and he agreed (ours is larger than that). One thousand dollars really won't protect you much these days. It's a nice idea, and hey it's really better than not having anything. But here's why I think people should work on building savings as well as paying off debt.

Unemployment: What happens if you lose your job? The usual time for one to find a new job was about 3 months. That has grown even longer now that the economy is in such a desperate state. How is $1000 supposed to last you 3 months or more? Our current house payment is $700 - that includes P&I, home and mortgage insurance, and property taxes. So if something happened and we had to use a $1000 savings as "income" that would leave us with $300 after housing to disperse to utilities, food, car expenses, insurance, etc. Not going to cover it. And what about the next month? Even when we were paying $625 for rent in our first tiny little loft that wouldn't have left us with much. Most people suggest 3-6 months worth of expenses (not income) as an emergency fund. I agree.


Medical Emergencies: If you are lucky enough to have insurance, you will have a deductible or an out of pocket expense to pay when the need for medical care arises. Our current insurance states that we have a $2500 OOP expense per person per year. $2500 - $1000 still leaves $1500 that we would have to pull out of our butt if all we had was a $1000 emergency fund. Some people's OOP are not that large, and some are even larger. But either way, $1000 will not cover you in most cases of a serious injury or illness. And let's not even get into what it would cost if you aren't insured at all. I would suggest that you have the amount of your deductible/OOP stashed away in savings for such an emergency. The term "Better safe than sorry" really applies here.

Vehicle Emergencies: This one is very similar to medical emergencies. Your insurance policy will have a certain deductible that you have to provide before they cover anything. But that's usually just if you have an accident. So if you're driving along and you don't hit anything/one but your transmission decides to take a dive, guess what. You're going to be paying more than a grand to fix it.

Natural Disasters: Earthquake, hurricane, flood, etc. In a 30 minute time slot people have seen their whole lives turn over and disappear. If you have start over completely do you think $1000 is going to cover it?

Death: I pray that none of you ever have to use an emergency fund for this because you will all be well over 90 before you pass on. But let's hypothesize that you and/or your loved ones get into a car accident and someone dies. Or there is a house fire and one of you doesn't make it out. It's a really horrible thing to think about, but if it were to happen funeral costs can rise well over $3000.

"Ok, that's cool but how am I supposed to come up with extra money?" Some people don't even have $100, let alone $1000. If you're trying to come up with any kind of emergency fund but can't figure out how, here's some ideas.

Cut back - See if you can squeak anything out of your budget. Do you have any extras or luxuries you can cut out for a period of time while you build up a safety net? Wouldn't you rather go a few months without cable, or that Extra Chocolately Mochacinno you love so much if it meant you could sleep easier at night? Or you could even do something as simple as turning off the light when you leave the room. Transfer that utility bill difference to savings.


Keep That Change - I wrote about it here and you can do your own version. Or set up a change pot on your dresser. Once a month take it to the bank and deposit it in savings.

Sell Stuff - Got any books you don't read lying around? Games? Electronics, musical equipment, appliances, furniture? There's many resources for getting rid of unwanted stuff and making money. Yard sale, eBay, Craigslist, or just getting the word out through friends and family that you're looking to sell it.

Save Those Windfalls - Tax returns, birthday/holiday money, inheritance, bonuses, overtime. You will most likely get extra money a few times a year. I would highly suggest you put it in savings, especially if you're hurting for a cushion. That shiny new toy can wait, can't it? And once you have what you consider to be a comfortable savings, then the next batch of extra money can go toward that 62" plasma you've been wanting so bad. 

In the end there really isn't an excuse not to have more than $1000 in the bank to cover you in the event of an emergency. If you can buy a soda from the vending machine at work every day, you can put it in savings. And if, heaven forbid, the need arises, you'll be much happier you sacrificed a little back then to cover you now.

Taking Control

 I told you I would post it, so here it is - finally. Over the last few months I've come to realize I was really being lazy about the budget. I always made sure all the bills were covered, but we've never really been careful about what to do with the rest of the money. It's all just kind of floated in and out. So I came up with this sheet. I looked over our Quicken accounts for the last six months and picked the ones that occur on a regular basis and added them to the list. Here's how it works.

You start a new one at the beginning of each month. You have a general master plan for the whole year, but things change so having a new one for each month will be the best. This way you can tailor it to any upcoming events or needs.

The first column lists each expense, grouped by category. These change for each family, but the ones in the screenshot are our general ones. In the second column is the "expected" amounts. At the top you put in your expected income, then your expected or budgeted expenses. In the third column you place what you actually made, as well as what you actually spent. If you're just starting out, going over budget by a little is alright (as long as it's not causing serious financial hardship), you'll get the hang of keeping track and staying in the set amount. Obviously though, what you budget to spend should not exceed what you expect to get. If you're over then you need to cut something (or multiple things). It's important to not just blow it off as "oh, I'll do better/make up for it next month." I've been bad about doing that with groceries (see previous posts of guilt).

At the bottom are places to put totals and differences. I total up the budgeted expenses and subtract them from the expected income. This is what amount we have projected as leftover for savings or debt repayment. I will do the same with the "actual" totals, and that amount will be used as decided. If you would like, you could roll any "extra" money into the next month. For example, if we didn't spend our $150 allotted for home improvement, we might roll it over to next month and the month after to save up for a new floor. The best outcome though, would be to have extra money to throw at any debt. 

The last section is for yearly expenses like car registration and gifts, as well as account balances as of the beginning of the month (like whatever debts you have, and checking and savings accounts if you'd like to have those available). For the yearly expenses I divide the total amount by 12 and put that amount in the budget for each month, then put it into the savings. For example, our car registrations for the year come out $526/12 = $44 a month (rounded up). This way, by the time that bill rolls around we will have it sitting in savings ready to go (and collecting interest) rather than scrambling to come up with the money. Same for gifting. Saving a little bit each month is easier than trying to squeeze out a birthday or Christmas present if you don't have any money left. Just total up any gifts you plan to give over the whole year and go from there.

If you want to get ahead at all you have to have a budget and tell your money where to go. I think this will work for us quite nicely.

I would be happy to send my blank version for you to fill in to anyone who wants it. Just drop me an email at bitoflifeblog@gmail.com. I'll zip it over to you as soon as I can. Or, just grab a piece of paper and write one out. It doesn't matter what method you use, it's just important to do it.

PS. On a slightly different note, but still related to money - by using my "Keep The Change" System I have put $94 into savings since the end of December. WOOHOO!

The Grocery Budget Rework - A Tale of Enlightment and Woe

(I know, you see this picture a lot. Sorry. It just works for so many things!)

Over the last couple of days I've done a lot of pondering about groceries and decided to change things around. I realized that things like diapers and toothpaste, although can be bought at a grocery store, shouldn't count. Toilet paper doesn't get eaten (except by super models, apparently). I also realized that I wasn't counting things like our Arrowhead delivery (which I'm hoping we can get rid of soon) and whatever miscellaneous food we might get while we're out. While I counted large fast food purchases for the whole family, I wasn't counting the little things like snacks from 7-11.

So, "Groceries" to me will now include any edible solid or liquid that is consumed. And it won't include zip bags, trash bags, Clorox wipes, toilet paper, paper plates, paper towels, toothpaste, diapers... etc. These are now being tossed into the "Household" category. I think this will give me a better budget to spend on just food, and help keep us in check as far as the "extras" we get somewhere other than the grocery store without thinking about it.

So by reworking the last few months (taking out household, and adding in extra stuff) here's what we've done on groceries (brace yourselves).

November: $510.83 ouch! To be fair, this was the first month we decided to keep track of things and change our routine.

December: $442.60

January: $396.28 close, but this was the month I wanted to eat from the pantry/freezer.

February: $441.40

March: $436.50

Wow. We're really not doing as well as I thought we were. Kind of depressing really. But now that I've got a better handle on it, we can do better. Now I'll remember to count the little things and add it to the tally. 

We still have 3 days left in March, but I think we're pretty much done. So I sat down and put everything into my sexy spread sheet and I see that Meats, Junk (crap that really has no nutritional value, and fast food), and Drinks (not including soda, they have their own category) are our highest expenses this month. I even added some fancy data charts so I can see at a glance what highest ones were for each month. 

So that put's us at an average of $446 over the last 5 months. A far cry from my noble $300 a month budget. Guess I better roll up my sleeves and get to work.

Wouldn't I Save More if I Didn't Pay You in the First Place?

I love books and podcasts and websites and just about anything else about saving money and people getting out of debt and what not. I think it's from being a bookkeeper. I've realized that accounting in general is what I'm really passionate about (next to knitting). I love doing our house financials, and I loved my job doing it for my dad. I've even considered doing it for others as a home business, and maybe going back to school for some official papers. Playing with numbers gets me high. (Seriously, I go a little crazy. Just ask Ben.)

Since I do spend a lot of time listening and reading about saving money I've seen lots and lots of ideas and systems to help you do so. Things like a pre-made cash envelope system. Or coupon binders. Or books on how to get out of debt. I've started listening to the Dave Ramsey podcast lately and I have to admit I love it deeply. It's so fun to listen to and he just sounds like nice Christian man. There are others who are out there to help you save money but they all seem to offer you something you have to buy (even Dave).

Which leads me to the question - Why would I PAY you to save me money? It just doesn't make sense to me. Maybe it's because I've always been pretty self sufficient and I don't really need anyone to hold my hand. Some people do. Some people need that push in the right direction. But I'm just having a hard time understanding how spending $30 on a book (that you can get at the library) or $29.95 on a binder system (that you can make yourself for a 1/4 of the price) is supposed to help anyone. Wouldn't that money be better spent in a savings account or going toward a debt payment?

You also have to consider how long it would take you to actually "save" by using such an item. Let's say, for example, you buy a coupon organization system for $30 and you got about $5 a month in coupon savings. It would take 6 months for that coupon organizer to pay for itself and for you to actually start saving by using it. Or you can ignore coupons for the most part since most of the time you can get store brand cheaper than name-brand-with-coupon anyways and keep that $30, plus some.

I understand the need/want to make money. And if you have a legitimate system/idea to sell that really works then more power to you. But I think that if these people really wanted to save you money then they would be offering their advice, or telling you how to make your own binder, for free. Which would really save you money.

The Tax Refund Debate

 

This picture of my flowers has nothing to do with taxes, I just had to share them with you because they are gorgeous (and I needed a picture for the post). Ben got them for me on Valentines with this note:

"It's really hard to be sneaky with you always in the room but it looks like I pulled it off.

- Love sneaky Ben."

He cracks me up. He ordered them while I was sleeping in on Saturday. ;)

Now on to the taxes! Because we are first time home buyers we get the $8000 homebuyer credit. Which means combined with our amount for having three kids and one income, all the other stuff, etc. we are getting a sizable refund. So naturally, we've had to figure out what to do with it all. 

BLOW IT ALL ON TOYS! WOOOHOOO! Heh. Yeah right. As much as I would like to get all the "toys" we've been wanting, we have to be responsible adults (damn).

We knew for sure we wanted to build up our savings. Ideally we will have at least 3 months expenses saved so that if the unforeseeable happens (such as a job loss or medical expenses) then we'll be able to float for a period of time. Be realistic for your situation. It usually takes longer than a month to find a new job, and not all medical companies will let you put your bill on a payment schedule. Save up a sizable amount.

Even with saving 3 months of expenses that still left us with quite a bit, and our list of things we would like to do. I'll share with you what I did so that maybe if you're facing the same dilemma (be it tax refund or other windfall) then you can use the same idea. All the following figures are fake.

I had originally just sat down with Ben and said, "OK, this is how much we're getting. What do you want to do with it?" But that... didn't go so well. Poor planning on my part. I forget that I need to spend my time thinking about it and making visual presentations to give him a better idea of what I'm thinking, rather than thinking out loud and not making sense. The next day I pulled out paper, a pencil and calculator as well as our current debts and wish lists and went to work. Then I threw it all into Excel to make it pretty and to be able to change numbers and have it auto-update the rest.

I set up possible scenarios for spending the money. In each scenario I listed certain things to do (like paying off the truck) and the total of them, then subtracted that total from our refund amount. After that I calculated how much one, two, and three months worth of savings would be based on what our monthly expenses would become after paying off certain debts. Once that was done, I then subtracted each amount of possible savings from the amount left from paying off debt. So my worksheet looked like this.

At the top you see the refund amount and monthly expenses based on what we would or wouldn't have to make payments on. Then for each scenario you see the item(s) to be payed off, the total of that, as well as the total of each month of savings. The bold numbers in the colored sections are what is left after all the math is done. This is money to either play with or additional money to put into savings. Our first choice is Scenario III with 3 months of savings. But that depends on what else comes up between now and then. We will probably use the leftover money to take a wedding anniversary vacation in May and hopefully build the shed and chicken coop with it. Or something like that.

Are you getting a refund this year? What do you plan to do with it?

My Version of "Keep The Change"

Have you seen the Bank of America commercials for the "Keep the Change" program? The ones where the narrator tells you that for every purchase you make, B of A will round up to the next dollar and transfer the amount of change into your savings account?

I'm trying something like that. We don't bank with B of A, but I don't see why that should stop us. Each Sunday I sit down and figure out what the change would have been on all of the purchases we make with our credit/debit card. I count everything but loan repayments. So this includes things like the auto insurance payments and PG&E bills, as well as everyday purchases. I add up the change and make a transfer in that amount from our checking to our savings.

We also save all our real pocket change. We put all of the pennies we get into a large antique glass water bottle that we found at an antique shop in Cayucous. This is for the kids. We will break into it when they go to college (or when it fills up and we need to start over). Our "silver" change gets put into a jar and usually about once a year we will take it to the bank for either extra cash or to put in savings. There have been a few years that we've used it for Christmas.

I also had the idea the other day to start taking each one dollar bill we get an put it into a jar or envelope. I bet we could come up with a lot of cash after just a month if we started doing that.