Saving Monies

A couple people have asked me what Nate and I do to save money (other than budget like crazy people) so I thought I would do a post about it. None of it is rocket science. Not even close. We don’t do one or two big things to save a lot of money. It’s the combination of many little things that add up. I’m sure we do more than this, but here is a short list:

• Make our own dog treats. Nate and I are pretty picky when it comes to the treats that Mazi gets—we would only buy treats that had a few ingredients that were actual food, so they were more expensive than your average Milk Bone. I looked up some recipes on Pinterest and started making dog treats. Even though I have to spend some time making them, we are saving money and I know exactly what is in the pup’s treats.
• Make my own individual oatmeal packets. I love bringing oatmeal to work for lunch. Call me weird. A couple months ago I started buying big canisters of oatmeal and making my own “packets.” I put a half cup of oatmeal, a couple tablespoons of brown sugar, and then either some pecans, almonds, or cranberries.
• Sunday dinners at my parent’s house. My parents like to have big dinners sometimes on Sundays. It’s such a win! We don’t meal plan for weekends, it’s yummy food (think full Thanksgiving style food, for real), we get to catch up, and we get leftovers for lunch. Score!
• No cable. Nate and I didn’t have cable for over a year, but gave in and got it a couple months ago. But then we cancelled it. It’s expensive and you get caught up watching stupid shows. Sure, sometimes we want to watch shows that are on cable, but we get over it.
• Make do with what we have. For example, our sheets have ripped twice; therefore, I’ve sewed them twice.
• Buy store brands. I used to be one of those people who always bought name brands because I didn’t think the store brands were as good. For some things I still buy name brands because they are indeed better quality, but I’ve found that many store brands are just as good if not better than name brands. Sorry I’m being general, but you know what I mean. 
• Keeping track of what we spend at the grocery store. I do a menu plan for two weeks and put all the food we need on a list on my phone. Nate uses his phone to add up all the items we get at the grocery store to make sure we don't go over our $110.00 budget for food every two weeks. If we go over, we put something back. It's that simple. 

There you have it. What do you guys do to save money? 

Small Victories

Sometimes you have to celebrate the little things to stay motivated. This week we have three little things to be happy and proud about.

1. We have paid off more than $20,000 of our student loan debt. While we still have a long ways to go, that amount feels good and is a milestone. Have you noticed the Payoff Tracker that the hubby added? It's a nifty little tool to clearly see where we are at. 

2. We had enough money in our grocery budget to buy some beer. Now, people, this is big because sometime we have to put groceries back because we don't want to go over budget. So, I tried hard to plan meals that were cost-effective. Beer = happy hubby.

3. We think some people are starting to think we are weird. And that's a good thing.

Now off to do a grown-up thing and get our taxes done...

Does no debt = higher credit score?

I wasn’t planning on writing another blog post until next week, however, Shaina and myself were talking about how policies in the financial world today are set against those who are debt free. The specific topic being discussed was mortgage lenders and how they use the all powerful credit score to pretty much determine your future when it comes to buying a home. Bare with me, I just feel like ranting for a little bit.

After we pay off debt our next main goal is home ownership. In doing a little research on loan types, programs, down payment requirements, and so on, there’s one point that pretty much every lender takes into consideration, and that’s your credit score. In my opinion the credit score is one of the most backwards and flawed systems we have. Essentially your credit score is a numerical depiction of how you interact with debt. If there is a lot of interaction, meaning, that you a) have debt and b) make payments towards the debt, you will most likely have a higher score. Inversely, if there is no interaction, because you a) have no debt or b) you don’t make payments towards the debt, you will mostly likely have a lower credit score.

Now, does any of what I just said throw up a red flag? That’s right. If you have no debt, you will have a low credit score. Have no debt for long enough, and you will have no credit score at all. Obviously if you have debt and you stop making payments you’re probably deserving of the low score. But that’s not the part I have an issue with. Let me explain why I think this is a totally backwards system.

Mortgage lenders often use your credit score to assess risk. In other words they look at your score, see that you have interacted with, or made timely payments towards, some form of debt. They conclude that since history shows you made payments on other debts, the chances of you continuing to make payments are high, while the chance of you defaulting, or not making payments, on your home loan is considered low. Lenders will value that risk and will present you with an interest rate on your loan to compensate them for taking on whatever risk they feel you impose. The higher the risk, the higher the interest rate will be. For those who are declined, this usually this means that the lender has determined your risk to be too high. Now, there are obviously other factors that come into account such as debt to income ratios and so forth. However, credit scores are a major driver.

Let’s look now at someone who has no debt, but who also may have a very low or even now existent credit score. There are some lenders who are all "bad" and will look at this, take into account that the score is due to no debt, and will move on to accepting other forms of validating payment histories such as statements from landlords on rents paid, or letters from utility companies showing timely payments. However, you may have to search a while before finding a lender who will work with you like this.  In fact a lot of the major banks will probably look at you funny if you ask them that. As an example, after Shaina and I got married we went to open a joint checking account at the bank we both had previously banked at. During this process they asked us if buying a home was in our future. I assumed this was a sales pitch and was right. We said yes, but that it was still a few years out. But then the banker stated that at this particular bank, they like to see at least five lines of credit open and active to be considered for a home loan. Five! I really wanted to just laugh at him, but of course my mother didn't raise me that way.

So let’s recap: More debt = higher score, granted that the payments are made on time. No debt = lower score. In the eyes of the lender: higher score = less risk of the borrower defaulting; lower score = more risk of the borrower defaulting. I’ll let you make the decision on this for yourself, but who do you think is at more risk of defaulting on their debt, including the new home loan they just took on, say if they lost their job? Or in other words, who has the better chance of paying back the money the home owner borrowed? The perfect credit score who has a ton of debt with cash tied up in other minimum payments, or the low credit score with no debt, no financial obligations to anyone else, and who also has a history of PAYING OFF DEBT? Tough one, right? Not really, but apparently our society can’t seem to fathom the idea that anyone could survive without a credit score.

Keeping Your Money On a Leash

As year-end reporting slowly comes to a close at work, I have a few weeks of “down time” before quarter end reporting starts up. This time of year is especially draining, so I’m excited for it to soon be over. We have a few smaller filings to wrap up and submit to the SEC before we can officially say year-end is over, but the light at the end of the tunnel is getting brighter.

To keep with the promise in my previous post I thought I’d do another one this week and try and keep to the every-other-week time frame. Also, I know you all are dying to dig into more numbers (or not).

I thought I’d explain more about how we budget every month, not just that we have a budget meeting every month, but what exactly that entails, and how I record everything each month to ensure we stay on track.

First, when we sit down for our budget meeting we list out what we anticipate we will need to spend money on for that particular month. These items are separate from the expenses that we regularly pay each month, such as rent, utilities, minimum loan payments etc. I record the variable expenses in a spreadsheet and we assign a dollar value to each item based on what we think it will cost. I try and inflate this number slightly just to be safe. The worst thing we could do is estimate an item lower than what it’s actually going to cost, and then mess up the rest of the budget throughout the month. We need to be honest with ourselves when it comes to budgeting. More times than not, those with budgets that fail, are not truly being honest with what their spending habits are, and instead estimate what they hope to spend. Also, a myth about budgeting is that there is no room for fun, especially when you’re trying to pay off debt. The truth of the matter is that while the “fun” items probably need to be scaled back quite a bit, they don’t need to be cut out entirely. We simply need to account for them within the budget. An example expense list is as follows:

Note that I've split up the expenses into two groups. Since Shaina and I each get paid twice a month, once in the first half of the month and again during the second half, this helps me break down which paycheck these expenses will be coming out of. Also, to help me further visualize when these expenses will occur, I assign an estimated date. For example, even though our fuel budget is $130 for the first half of the month, I can easily see that between the two of us, we have $65 a week for gas. After these expenses are documented, I add them up into one of four categories; Fuel, Food, Dates, and Miscellaneous. Dates include any dinners or lunches out, not necessarily between just us, but also with friends, such as Shaina’s occasional coffee dates with her girlfriends. I then insert these totals into our master budget, along with our other regular expenses.

The type of budget that we use is called a zero balance budget. This type of budget, as the name would suggest, allocates our entire paycheck to some category, until the ending balance is zero, giving each dollar a “home” for that month. The benefit to this is that you will then know where your money is going. Too often, before this journey began, I would look at my bank account and wonder where my last pay check went. It was stressful and quite frankly annoying to be working so hard, and to constantly feel like I had no money to show for it. Another benefit of this type of budget is the ability to look back at the previous month’s budget, know where everything went, and have the ability to adjust amounts for the next month. If you had no idea where your money was going adjusting spending habits would be nearly impossible. An example of a zero balance budget for a given month, using example amounts, and also using the example variable expenses above, would be:

Once the amounts of the variable expenses are dropped in, that month’s budget is complete. The easy part is over; the hard part of sticking to it has just begun. Next post I’ll explain some tools that I use in tracking our overall expenses, as well as some tips on staying on top of food and gas spending that so far seem to be working.

Best Dog Ever

I want to take a bit of time to write about our dog, Mazi. She is one of the things in my life that puts a smile on my face every day, shows me unconditional love, and gives me constant companionship. As some of you know, she almost left my life three years ago. So on this “Throwback Thursday” (I usually never do #TBT, but oh what the heck), I want to share Mazi’s (abbreviated!) story.

On the night of January 31, 2011, Mazi ran away. No one will ever know what really happened, but we speculate that she chased a snowmobile on the trail behind the house. I wasn’t home at the time. When I made it back home my friend Megan came over and we started searching for her (along with many other people). We were driving around in my car looking for her and I had to pull over to throw up. I was that hysterical. 

 

For the next week or so, my family and close friends spent all our time searching for her, going door to door, calling all the shelters and vets, putting up signs, researching ways to find lost dogs, you name it. Some of those nights it dipped down to -20 degrees, so I was losing hope.  Being a boxer, she doesn’t have much fur to keep her warm. There were no sightings of her anywhere. You couldn’t even talk to me about it without me tearing up. At a certain point, I just wanted to know if she was alive or not. I couldn’t concentrate on anything during those days. You never know how quiet your house is or how much of a void there is in your life when your dog suddenly isn’t there anymore. 

On the night of February 8, 2011, I got a call from a woman saying that her family heard a dog crying in their woods and they thought it was Mazi (they saw the lost dog posters). The house was a couple miles away. Every time they would try and find where she was, she would stop crying. The family enlisted the help of another family in the neighborhood, along with their dogs. It was the dogs who eventually found Mazi. I was crying on the way to the house, not knowing what to expect. We had to trudge through a lot of deep snow to get to where Mazi was. She was curled up on an icy patch under a tree. She had to be carried out because she was so weak she couldn’t walk. Even though I could tell she was really out of it and in pain, she still licked me.

 After all was said and done, she spent a night at the emergency vet and a couple nights at our home vet. She lost 11 pounds, she had to have some of her teeth pulled because they got cracked (we sometimes call her the toothless wonder), she had to have surgery on her back hocks because they split open, and she had to wear bandages on her front two paws for many months because the pads completely fell off. Our vet doesn’t think she would have made it if she wasn’t found that night. 

I am so thankful that the people who searched for Mazi didn’t give up. If Mazi wasn’t found, then Nate and I wouldn’t be together. Mazi continues to bring so much love and joy into our lives every day. Plus, she is so goofy that she is a great form of cheap entertainment for us :) 

On a box of dog treats that we bought Mazi recently, there were these “Lessons to Learn from Our Dogs.” And yes, I cut it out and put it on the fridge. They are great everyday reminders for how you should live your life.

-Allow the experience of fresh air and the wind in your face to be pure ecstasy.
-When loved ones come home, always run to greet them.
-Take naps and stretch before rising.
-Run, romp, and play daily.
-Eat with gusto and enthusiasm.
-Be loyal.
-Never pretend to be something you’re not.
-When someone is having a bad day, be silent, sit close by, and nuzzle them gently.
-If what you want lies buried, dig for it.
-Never pass up the opportunity to go for a joy ride.
-Thrive on attention and let people hug you.
-Avoid biting when a simple growl will do.
-On hot days, drink lots of water and lie under a shady tree.
-When you’re happy, dance around and wag your entire body.
-Delight in the simple joy of a long walk.

Who could not love this face?