The evolution of our budget

Like most things, our budget has undergone some changes in the past and will need to undergo more changes in the future. This constant evolution occurs because we are constantly changing and requiring different methods to keep us on track.

Of course we didn't always have a budget. When we first moved in together we kept our money separate; my income was mine and his was his. We used to divide the bills between us so that every month we would both pay about the same amount. For instance, he would pay the rent and I would pay the rest of the bills including groceries and going out expenses.
After moving to DC, I went to grad school and barely made any money and my boyfriend got a wonderful job that supported us both. For 2 years, his income paid for all of our bills so things were pretty simple. But because I did have part time jobs here and there, we agreed that I would pay for my own personal bills (cell phone, metro, going out food). This is when I started keeping track of my expenses with a budget. There wasn't much to keep up but after I graduated we decided that in order to achieve our financial goals faster we would combine our income (on paper only, we still have separate accounts) . So we began to do a combined budget where we estimated our expenses for the month and then attempted to fall at or below that mark. Of course this is not as easy as it sounds, especially when two people are involved. So over time our "budget" has turned into a document that simply tracks our expenses. The column that lists the amount we hope to spend has become meaningless and we actually ignore it now.

Should we even bother with this "budgeting exercise" every month? I don't know. At least it tracks what we spend and at the end of the year (which will be 6 months of us combining our income) we can look at our spending patterns and trends and decide if we need to make any adjustments. (My poor boyfriend will think I'm punishing him by doing this but I promise it'll be ok ,babe!) In the mean time we need to figure out if keeping a budget will benefit us or if we should turn to another method. I've heard many people say budgets don't work because they are like a diet: you stick to them for a while but then decide it's not practical and do what you want in the end. We are definitely not sticking to a budget although we're not frivolous with our spending.

The thing is I prefer to have structure in my financial life. I'm much more comfortable when I know exactly where we are in our "alcohol budget" so we know we can absolutely go out for drinks this weekend. My boyfriend, on the other hand doesn't see the point in tracking every penny because we're doing fine financially.
Bottom line is we're due for a budget change. Somehow we will need to come up with a system that works for both of us and keep trying until something sticks.

(photo: scoobay, flickr)

Little Things Add Up

In our efforts to spend less and save more, we have started to limit our consumption and waste. I'm not sure how much these little steps have actually saved us but I have no doubt that they add up. Here are some of the things we're doing:

1) We make our own laundry detergent. I know I could probably get great deals on store-bought laundry detergent but I seriously doubt I'll ever pay around $0.50 for 16 loads of laundry. Plus home-made detergent is a lot less toxic than store-bought and since we re-using the same gallon sized Gatorade as our detergent container, we don't go through multiple plastic containers from store-bought detergent. It works really well and doesn't have an annoying scent. Here's the recipe I use modified from the one at this website: http://tipnut.com/10-homemade-laundry-soap-detergent-recipes/
1 gallons Water (hot)
1/2bar Soap (grated)
1 cup Baking soda

1 cup Borax

• Melt grated soap in a saucepan with enough hot water to cover. Cook on medium-low heat, stirring frequently until soap is melted.
• In a large pail, pour 1 gallon hot water. Add melted soap, stir well.
• Then add the baking soda and borax, stir well again.
• Use 1/2 cup per full load, 1 cup per very soiled load.

2) We reuse plastic baggies. I have just recently started doing this about 2 weeks ago after reading about it in a book but my boyfriend's mom introduced me to it years ago. I used to think it was kind of gross but I just realized it's not. I turn the baggies inside out and use a soapy sponge to scrub it, I rinse it then let it dry inside out. Then after it's dry I flip it right side in and throw it in the drawer. I'm not sure how long I'll wash the same baggie but so far they're doing just fine.

3) We make beans from scratch. It does not take any actual knowledge to make beans from scratch, you just follow the instructions on the bag. It's not labor intensive at all. You empty the bag into a big bowl of water and I usually cover them and let them sit over night. Then I'll rinse them and throw them in a pot full of water and cook them on low for a few hours. If you have a crock pot then you can leave them in there while you go to work. Sometimes if I'm feeling like I want gourmet beans I'll throw in a couple cloves of crushed garlic and salt but usually I don't add anything at all. Then we'll eat the beans for dinner and whatever's left over (usually a lot), we'll throw in little Tupperware containers with water and freeze them. When I know we're going to have beans for dinner, I'll take out the beans in the morning or throw them in the microwave to thaw them out. It's so easy and soooo much cheaper than buying canned beans.

4) I use the dryer to dry 2 loads at once. we just moved into a new apartment that doesn't have a washer and dryer. So we have to use the machines in the building. At first I noticed that the dryer was pretty powerful because one load came out super dry- much better than my last dryer. So I tried 2 loads and it dried those well too. Then I pushed my luck and tried 3 loads- this failed miserably. Almost everything was still wet. So now I know, 2 loads for the dryer. This saves us $1.25 each week. It doesn't sound like a lot, but remember, it's the little things...

(photo: the green field blog, flickr) 

Starting to stock pile!

I went to Safeway and Giant today in the rain! Or should I say in the mist. Yes, it mists in the city. It's very weird (I'm from Florida where when it rains you can feel it). Anyway, we were out of all produce so I had to go grocery shopping today. I went to Safeway where I bout 6 non-dairy milks(Soy Dream and Rice Dream) for $1.50 each. We usually can't find any for less than $2.00. I had also bought 6 of these milks the other day too so I guess this is technically my second shot at stock piling. I think we go through 2 milks per month and these non-dairy milks do not need to be refrigerated until the're opened so they have a pretty long shelf life. Then I went to Giant and bought 6 tubs of Smart Balance. They were on sale for $2.50 and I had 3 coupons for a dollar off of 2. So I paid $2.00 for each instead of the usual $3.00. Apparently you can't freeze Smart Balance but we usually go through one tub a month (I think) and the expiration date for them is a while from now. I also saw chocolate chips on sale for a dollar cheaper than normal so I bought 4 packs. We usually don't go through many chocolate chips around here but I do crave homemade chocolate chip cookies every now and then.

All in all I think I just purchased six months worth of:
Milk: paid: $18.00 , saved: $15.32
Butter: paid: $12.00, saved: $5.92
Chocolate chips: paid: $11.16, saved: $3.20

Total paid: $41.16
Total saved: $24.44

Groceries Part 3: looking to the future

I have been so proud of myself the last few months for saving half on our grocery bill that I can't stop telling people about it. But I've been slowly realizing that I'm only making a dent in the grocery bill. Apparently, stock-piling is where the true money-savings lie.

Here's what the "experts" recommend: When there is a crazy sale going on for a particular item you would normally, instead of buying just one or two, buy a ton. The strategy here is to only purchase most of the items you buy at a deep discount. So when you buy a ton of that item, you're buying enough to last till the next time it's on sale. This way you never buy it for full price.

I haven't been stock piling yet but I guess I did try once. About a month ago Safeway had a coupon in their circular for pasta (I can't remember the brand) at $0.59 each. Normally pasta sales are 10 for $10 so this coupon was a lot cheaper than their normal sales. The coupon let me buy up to 6 boxes of pasta at a time, so I did. I have no idea when this sale will happen again but I think if I was smarter, I would have gone back, picked up another circular at the front of the store, and purchased 6 more really cheap boxes of pasta. Because this is the only example of my attempt at stock-piling I was really excited to have so much pasta. This means I made A LOT of pasta dishes so we ran through our "stock pile" of pasta really quick.

So now that I understand what I'm supposed to do: stock pile, then I can start to make a conscious effort to slowly build it up. I remember reading somewhere that it takes about 3 months to build a complete stockpile. I'm going to start this week with butter. We use Smart Balance which is on sale at Giant for $2.50. I have a Giant coupon from months ago and when I was at my parents last week, I cut out a few (my parents get 2 local newspapers delivered) Smart Balance coupons. So my plan is to my around 6 tubs of butter and freeze the excess (I just learned recently thanks to my boyfriend's mom that you can freeze butter). Maybe next week I can stock up on something else that we use and then maybe some day we'll have a decent stock pile to brag about.

Groceries Part 2: the new way

Although the old way of doing the groceries had worked for us for a few years, we both came to the conclusion that we could go about it smarter. Believe it or not, we were spending $400 every month on groceries- for just 2 people! I know prices are a little more expensive in D.C. but $400/month was still over the top.

I'm not sure where I got new ideas for how to do the groceries, whether it was from a blog, a podcast, or a book, but they have worked wonders. I've been doing a few new things.

1) I started a price book. I know I got this tip from a book I read called "Your Money or Your Life". The purpose of a price book is to get an idea of how much things are and how to spot a good price. So you take a notebook and divide it up by each letter in the alphabet. On each page you will create columns for the name of the grocery store, the date, the item, the size and brand of the item, the price, and the unit price (you can find templates online to print out). You then write this information down in the notebook while you're in the grocery store, or you can do it when you get home by looking at the receipt and the groceries you bought. This takes a little bit of time, but after a while you will get an idea of how much things are. Remember in Part 1, we used to do groceries without really looking at prices, not anymore. After a while (a couple months) you will start to notice patterns in the price of an item at a particular store. So pasta may go for $0.69 at Safeway every six weeks.

2) I look at the weekly circulars for the grocery stores in my area. I don't actually have a grocery store near me (the joys of living in a city), but I do have metro access to several different chain grocery stores. It's actually worked to our benefit to not have one store that we shop at because it leaves us open to go to the store that's having the best sales that week. So what I usually do is go online and go to the store's website and pull their weekly circular and I'll take a giant legal-sized pad and a pen and I'll write down the name of the store and list each item that I want to buy and the price. With my price book, I can tell if an item that's advertised as being on sale, is truly on sale.

3) I develop a meal plan. I LOVE to plan things so making a plan for what we'll be eating the next week or two is actually fun for me. First, I go shopping in my kitchen. I walk a few feet into my kitchen, look in the refrigerator, in the cabinets, in the freezer and I take note of what I already have. Then I look at the sales I've written down from the circulars and I begin to write down dinners I can make with what I already have and what's for sale. I try to write 2 weeks worth of dinners on the same piece of paper that I wrote the sales on. Then I write down my grocery list (on the same piece of paper). I use my meal plan to decide how many of a certain item I will need. So if I'm going to be making tacos and pasta with a side salad in a week, I know I'm going to need 1 onion and maybe 3 tomatoes. This way I'm not just guessing how much produce I will need and risking it going bad.

So you can see we've pretty much done away with the running grocery list. Following these methods have definitely helped us not only save money, but save time. I have an entire 2 weeks worth of dinners to pick from every night. I know I have all of the ingredients so I'm not metro-ing to the grocery store and we're not getting take-out because we don't know what to make for dinner. I've been doing the groceries this way for about 3 months and we are now spending around $200 every month! As I keep learning about how to save money on groceries I'm improving my strategy. Next time I'll talk about the direction I'm trying to go in with buying groceries because I think it will help us save even more.

Groceries Part 1: the old way

Lately I've been readjusting our grocery shopping methods to try to get the most bang for our grocery buck. When we first moved in together we came up with a system of keeping a running list on the refrigerator door. So as we ran out of something, we would write it down, then we would take the list with us to the grocery store and buy what was on the list. This worked really well for us because we wouldn't forget things to buy (because we had a list).

Although this worked on the surface, underneath there were many problems with this method. First, we weren't very disciplined to sticking with what was on the list. The items on the list were the things we knew we were going to buy. But everything else in the store was optional. My boyfriend actually enjoyed going to the grocery store because it was a place to find new things to try. Of course anyone will tell you going to the grocery store and viewing it as a free-for-all is not a good way to save money.
Second, we would buy the items on our list regardless of the price. We might switch brands or buy generic if we bothered to look at the price, but either way, we would buy it if it was on the list.
This brings me to the third problem. Remember, the only reason the items were on the list was because they had been in the refrigerator, not because we planned on using them. We often bought things (produce) that would go bad before we got around to eating them. You know what we'd do after throwing them out? PUT IT ON THE LIST!

Now that we have financial goals and try to give purpose to the money we bring in, we have had to pay attention to the money we spend. Next time I'll share what our newest method is and how we've cut back our grocery budget by half.