Fabulous Financials

23 comments:

1. prlinkbiz, 9 October 2006, 7:18
   

   I receive different lumps of money throughout the month. I have a set amount of money I know I need to live. I pay my bills and then I look for ways to make my money grow. I’m in high growth mode, so I’m looking for the greatest and fastest return on my money. I don’t worry about emergency funds etc right now, I know I can move to borrow if I need to. Wow- I really do everything bass-ackwards! But, I enjoy my freedom! (and you will too hot mama- you want it and you’ll get there!)

    
2. Miguel, 9 October 2006, 8:04
   

   We have three basic categories of spending or what I like to call “uses of cash” (as in Sources & Uses):

   Basic Uses:
   - 401K contribution (legal max)
   - mortgage (it’s a big one; we call it Orca the Mortgage)
   - utilities (old house = big winter heating bills)
   - Lunch money (really lunch, dinner, groceries, eating out, entertainment, etc. all the little daily things that add up)

   Big ticket necessities:
   - insurance (home, life, disab, etc.)
   - taxes
   - emergency reserves

   Big ticket discretionary:
   - Non-retirement savings/invmnt
   - Travel/vacation
   - Gifts (anniv, bday, xmas, etc.)
   - His & hers clothing allowance
   - Renovation & repairs
   - Home furnishings/remodel

   Our budget breaks down into these categories mainly based on the “sources” of funds. Basics are paid for from monthly salary, big ticket items from funds set aside from the last bonus.

   We’re pretty consistent from year-to-year on the basics and big ticket necessities. Where we vary is the big ticket discretionary, which is heavily based on what the bonus is for that year. We try to limit expanding the budget in good years, and banking any windfalls – difficult, but we try.

   It works well for us because our income can very wildly from year to year. In a way, the volatility forces us to live below our means, since you never know what next year will bring. I feel like we should be able to live on salary alone, especially with rental income helping defray a big part of the mortgage, but can’t seem to manage it. My peers seem to have the same issues – the NYC lifestyle is very costly.

   FYI, everything goes on quicken so we can have a historic comparison from year to year.

    
3. Single Ma, 9 October 2006, 8:31
   

   @ prlinkbiz – I’ma start callin you Ms Money Growth. I hear ya mama! But let me ask you this? What happens when a deal goes bad and your children still need to eat? I will never believe everything always work according to plan. So without an emergency fund or a stash for those rough times, how do you deal with REAL LIFE?

   @ miguel – Great breakdown! But I’m not really talking about annual budgets. I want to know, when you got paid last Friday (or whenever), what did you do with it? Where did it go? Break it down in laymens terms Big Money Grip so us normal people can understand. And if you don’t mind my nosiness (is that a word?), how much IS that orca mortgage? Such an ugly name for a beautiful thing. LOL

    
4. Miguel, 9 October 2006, 9:45
   

   LOL, Little Miss Nosy, Orca the Mortgage = $800K initial principal (amortized down to $765K in last 3 years). 4.75% ARM with 4 more yrs to go before D-Day.

   As for where my paycheck went, the mortgage ate it, and then we spent some on eating out, and then I have no idea where the rest went. Honest!

    
5. Bklyn Diva, 9 October 2006, 10:54
   

   ok first thing.. you shoulda told me that you wanted that music.. *I already had them* but err yeah Monica is HOT.. Luda is luke warm and Janet is still growing on me.. Dave.. well I listen to him daily..

   Now how do I spend my paycheck.. Lately its been paying for my mother’s dental expenses.. LOL but this month I am actually ahead of the game.. I got some unexpected money *bonus for an employee referral* so I paid all of my bills so techinally I’m bill free this month.. so that money will go into savings, vacation fund and Mamma needs a new pair of pumps!

   Again thanks for that template.. It helped me put a lot into perspective!

    
6. Maria, 9 October 2006, 11:45
   

   Single Ma,
   Last weeks’ paycheck for me went into my bank account(of course) to be used for November’s Expenses. I dont touch that money until November 1st when all of my income will come together. October’s expenses are being funded through September’s income.

   It’s a principle of cash management under the You need a budget process. I love living off last month’s income! (Sorry to sound like an ad)

   As for the individual breakdown, it’s alot like yours but with less to savings right now(except EF) and more to expenses. (Still working on thing)

    
7. Leogirl, 9 October 2006, 11:51
   

   Breakdown of this Friday’s NET paycheck:

   ~auto withdrawal for 2 separate savings accts (starting out small, hoping to develop a good habit here:))
   ~Student Loan payment…only 24 more years to go:)
   ~20K mile service on my car
   ~Emergency fund money
   ~Lunch money
   ~Putting aside extra money for 2 weekend getaways coming up soon (Niagara Falls, Oct 27 and NYC to see The Color Purple, Nov 9)
   ~Housekeeper
   ~Utilities
   ~Credit Card bills
   ~Birthday gift for niece

   That will take care of just about every penny I have…I keep very little cash in my checking account and have been moving most of it out to savings and credit cards (I’ve been paying off what I spend on 1 every month, the rest I’m just trying to pay down).

    
8. Single Ma, 9 October 2006, 12:19
   

   @ miguel again – lol @ lil ms nosey (yep that’s me!). Only $800k? I expected you to say a few million. That’s not bad considering where you live and what I imagine your standard of living to be. LOL @ mortgage ate your paycheck. I know the feeling. That’s why I have to divide mine in half or I’d be broke for 2 weeks. And what you mean you don’t know where the rest went? I don’t believe that!

   @ bk diva – Well alrighty then! Tell me, how can I be down? I want Mr Hollister too!

   What you buying new pumps 4? Where you going? See, Miguel called me lil miss nosey so I’m trying to live up to my name. :-)

   @ lndsy – If you’re living on last month’s income, then that must mean you’re ahead of the game and paying bills on time (or early). And hey, you got the EF going too. Good for you! I hope the money is earning interest while it waits for you to spend it.

   @ leogirl – Starting out small is the only way to create a good habit. Wish I could remind myself of that when I’m trying to lose weight. And I feel you on the SL payments. Ugh! Ms Sallie has made herself a part of my family. If I were you, I’d flip the list and put credit card payoff at the top. There’s so much more you can do without that CC debt.

   BTW, you’ll love The Color Purple!

    
9. Maria, 9 October 2006, 12:30
   

   Basically I have one month’s buffer, so I pay all my bills on the first of each month, regardless of when they are due.
   I dont pay attention to paydays except to add the amount to my “coffers” so to speak. I used to worry tremendously about juggling things but not anymore. You shoud check it out, it saves alot of headache!

    
10. Single Ma, 9 October 2006, 12:49
    

    Nah mama. I don’t pay bills EARLY. The man gets it when it’s due, not a day early. Hell, if I have a grace period at no extra charge, I’m taking that too! LOL Otherwise, my money is earning interest until it’s time to give it away.

    I don’t have much to juggle. All small bills are charged to a credit card, then I pay ONE BILL when the statement closes. If I could charge my mortgage and car payment, I’d be in CC reward heaven! LOL

     
11. Maria, 9 October 2006, 12:58
    

    Sounds like you have it together and that’s what counts!

     
12. Miguel, 9 October 2006, 13:11
    

    I expected you to say “OMG, that’s crazy, what were you thinking man!” So forgive me if I’m a little disappointed. But, yeh, I guess you’re right: Orca is not too bad considering.

    I think of it as huge because if we had stayed in our co-op apt, the mortgage would have been paid off a couple years ago and we’d have housing cost of only $600/month (just the co-op fees) for a huge apt in NYC vs. $6000/mo (w/insur/taxes) for a townhouse. We loved the apt, but hated the country-club politics of the co-op (some day I will have to give you the lowdown).

    With our own brownstone, we call the shots, it’s ours, nobody can tell us what to do with out property (except for of course the govt). After the initial monster down payment and renovation cost, it’s not too bad because we also have rental income.

    So, I can’t really blame the mortgage on sucking up my paycheck. I honestly don’t know where it all goes. I know the big things, but the daily, weekly things like dinner, shopping, etc. seem to add up to a lot. We’ve been trying to figure this out lately – mystery of the disappearing paycheck.

    I guess that’s kinda bad huh? Believe me when I tell you, we don’t spend nearly the kind of money I see others spending with reckless abandon [he said to deflect attention away from own shortcomings].

     
13. HC, 9 October 2006, 14:07
    

    My gross is very much the same as yours, except my 401k-ish plan is 9.5%. I’m bumping it to 10 in the new year. (Also, I just recently realized that my IRS planning had totally neglected that I have health insurance premium conversion. Gotta love those untaxed health benefits!)

    Net:
    $35 auto to overdraft fund ($15 of which is then moved to the vacation/Xmas fund)
    $75 auto to condo downpayment fund
    $40 auto to e-fund
    $10 to charitable contributions
    $11.54 to healthcare FSA

    The remainder is direct deposited to checking.

    If it’s the pay period before the first of the month, [WAY TOO HIGH A] % goes to my rent payment via check.
    Then a little bit remains for renter’s insurance and basic groceries.

    If it’s the next pay period, then online bill pay/direct debit covers car insurance, student loans, utilities, and paying off the full credit card balance. What’s left goes to groceries, the occasional lunch out, entertainment, and gas.

    If it’s one of those lovely months in which I have a third pay period, then I dance. Hee. Seriously, I take some of it and make an extra student loan payment, but I allow myself a little more leeway on clothes shopping and such with the rest.

     
14. sf mom, 9 October 2006, 14:45
    

    Hi Single Ma. Long time, no blog (for me that is!) I hope you get well soon.

    Well, I just got paid at the end of last week too. Here’s the breakdown: (I don’t want to do the percentages right now…so I’m bearing my soul)

    Taxes: $178.63
    Dental/Medical/FSA: $321.73
    Auto Deduction (for company car:): $36.92
    SuppAD&D: $4.62
    Legal (my comp offers legal services under a corporate plan…my husband and I just got our wills and trust set up under it): $7.62
    401K: $108.94 (5% of income, company matches 3.5%)

    All of this is automatic from payroll. The rest is direct deposited into my checking account.

    The rest of it sits in my account until I pay bills when they are due.

    Direct from Quicken: Online balance $4344.28, Current balance $428.22, Ending balance $6620.61.

    This is kinda arbitrary because I write out bills months in advance and keep them organized to send out on the appropriate day (I too don’t give out any cash one day sooner than I need to.) The online balance includes mortgage checks, that are out there but not cashed yet.

    To try to answer your question a little more direct…I spent money at church (tithing), I bought a latte and chocolate milk at Starbucks after church, I bought one CD (Carrie Rodriguez)for myself after hearing her play at the Hardly Strictly Bluegrass Festival in SF (which was FREE and AMAZING), I bought Carrie Rodriguez and Chuck Taylor’s Duet album for my husband for Christmas (which is signed specifically for sfdad.). So…a total of $50 cash spent since I got my check last Thursday.

    C’est ma vie!

     
15. Single Ma, 9 October 2006, 16:30
    

    @ lndsy – Hey, there is no ONE right way. Gotta do what works for you. :-)

    @ miguel – Sorry to disappoint! LOL I expect a man who wears an Hermes tie on a daily basis to have impressive living quarters. :-) Ok, I might believe YOU don’t know where the rest of your paycheck went, but I KNOW your wife does. I forget who I’m talking to. Just keep making that money and let the Mrs handle the rest. K? Ha!

    @ HC – Overdraft fund? What’s that for? You write THAT many checks? I feel you on the rent payday. This is why I split my mortage half and half, so I won’t feel that crunch. Other than that, your breakdown and discretionary spending sound just like mine. Are you my twin? LOL

    @ sf mom – Been a long time. *wavin* Missed ya! What’s the deal with the comp car and what exactly are YOU paying for? Being nosy again. he he

    $50 for all of that? Tithing, CD, starbucks run, a festival AND a christmas gift. Wow! Sounds like a lovely weekend.

     
16. sf mom, 9 October 2006, 19:10
    

    yea, yea. i know. I really shouldn’t complain AT ALL! A free car is a free car. And free gas, oil changes, maintenance, insurance, heck, I even get free car washes! I have to pay for “personal use of the car”. I do keep mileage of personal use and report it on an expense report each week. It’s been “said” that this company car benefit adds a virtual (or very real)$20K to your salary. While I was complaining, I ‘m still psyched about it.

    Yup, we had a great weekend. The festival was FREE thanks to a billionaire in San Francisco who loves Bluegrass music. (Thanks Hellman!) The CDs were cheap and friends brought extra beers since my husband got there early in the day to get a great spot. You MUST check out the North Mississippi Allstars, they kick it!

     
17. Tired of being broke, 9 October 2006, 19:48
    

    last pay day:
    403B first
    HSA
    Health insurance
    E-fund
    Sallie ( u know how she is)
    Federal student loans
    CC ( go too many)
    Coned (can’t stand him)
    Cablevision
    Car payment

    Each pay check is pretty much the same, until I get the CCs and student loans away.

     
18. Miguel, 9 October 2006, 20:00
    

    LOL, yes, the Mrs very likely knows where the paycheck went, though even she has been slacking off on tracking expenses lately.

    But, a look at the CC bills usually tells the story. We eat out about twice a week, she has all her girlie stuff (nails, hair, etc.), maybe I bought a couple of shirts, seems we always need a gift for somebody, and maybe we rented a car for the weekend, blah blah. Adds up really, really, amazingly, frighteningly fast.

    When the CC statements get especially scary looking, the Mrs sounds the alarm that we are outta control and running a deficit and we cut back some. Maybe not the recommended way to manage things, but works for us. As long as we end up on budget for the full year, we don’t focus too much on the monthly swings (though maybe we should).

     
19. Leogirl, 10 October 2006, 5:36
    

    Single Ma,

    I honestly struggle with being debt free on my credit cards. I recently called the CC comp with the highest interest rate to negotiate and they would not/could not do it. The customer svc rep said she didnt have the authority. This is a CC with a very high interest rate that I’ve had since college. I haven’t had one increase in the limit or anything (every other CC I have has consistently increased my limits, decent interest rates, etc.). For the longest time I’d just pay the minimum (I’m paying bigger chunks now, because I want to get rid of it). I know I probably shouldn’t close a long term account, but I just can’t STAND having this card—it just does not benefit me in any way.

    Anyway, I’m really trying to get things in order with my finances and savings. I’m what some would call the Young, Fabulous, and Broke, hahaha! 20 something, single, no children…has a habit of spending up all the discretionary income I have (until recently:)…now I’m saving and building an e-fund). No David Yurman jewelry for me until Christmas:).

     
20. HC, 10 October 2006, 5:45
    

    “Overdraft fund” is my shorthand for “$300-$500 that gets parked in my credit union savings, earning almost no interest to speak of, but instantly available for transfer into checking if I need an extra $50 before the next payday, or (more importantly) available for transfer to my credit card if I have to make an emergency purchase and want to clear out the balances to keep my utilization down.” Since my credit card limits were raised this year, this is less important than it used to be. But I still like having the security of that extra pool in case I need money right away.

    Sure, let’s be twins. Even though I’ll be the plain one next to your fabulous self. [grin]

    And feel better, okay?

     
21. Single Ma, 10 October 2006, 8:06
    

    @ sf mom – Umm, can I come work with you? LOL While I’m reimbursed for POV mileage when I drive my own car and have a company CC to rent a car if needed, having a company car to drive everyday is much much better on the personal budget.

    @ tired – There goes Ms Sallie rearing her ugly head again. That heffa is in everybody’s pockets. LOL Like I mentioned previously, I’d slide those CCs just a tad bit up the totem pole. Paying double digit interest can hold you back from achieving your financial goals.

    @ miguel – LOL @ girlie stuff. That’s a necessity! Much like food. Ha! tsk, tsk, tsk @ scarey CC statements. You know betta!

    @ leo – Since you have other CCs in good standing, have you considered doing a 0% BT on the problem child card? Paying off doesn’t mean you have to close it. Unless it charges an annual fee, it won’t hurt to let it sit idle and give you a boost in your credit score. I’ve been YBF so I know what you mean. I think it’s fabulous that you recognize and are correcting your spending habits at such a young age.

    @ hc – Oh ok. I thought you meant overdraft as in writing checks and may not have the money in your checking acct. So it’s more like a “Just In Case Shyt Happens” fund (LOL got that phrase from another SMFF reader). I can dig it. Sometimes those online accounts just won’t do when you need your money right away.

    And by the way, you ARE FABULOUS, but only if you believe it yourself. *wink*

     
22. prlinkbiz, 10 October 2006, 10:57
    

    Single Ma-(Ms. Growth here lol) I never bet the ranch. I keep what I need to live, and then put what I have saved or earned over and above into investments. I am even a little more risky, because I know that if I lose it all moving forward, I have fabulous friends and fmaily who believe in me who would take me in and feed my kids if I needed it to get back on my feet. I don’t want that to happen- but I’m not afraid of it either. You can always end up like that no matter how careful. So start small, with some money you can afford to lose, but look for ivestments that will have a good fast ROI. Start with something you already know- like how to shop for fabulous deals and then turn around and make some money on them. Then put that money back into your investment, and keep it growing- then it is money totally separate from your living expenses. You’ll be hooked! LOL

     
23. Single Ma, 12 October 2006, 16:57
    

    “Good, fast ROI.” That’s every investor’s dream!

    I hear ya, mama. Sounds overly optimistic and unrealistic to live your life this way. Risking all you have and expecting good fast ROI all the time is a bit much for me. But hey, do you!