Yesterday I talked about the start of our personal finance journey and the next step. I explained that in 2006, we had a wake up call that we had to stop blowing our money. It was time to start caring how we spent our money before we ended up in the poor house.
We’d been so careful previously, but then I think we got caught up in having so much disposable income we just began to spend. We didn’t overspend and charge things we couldn’t afford. We didn’t go out thankfully and buy a new car with monthly payments. We just happened to spend every penny we had after we saved for retirement and an emergency. Which might have been fine if tuition payments weren’t looming.
So what did I do? I went through our spending statements from 1/06 to 3/06 and tried to see what we were spending in different categories. Then I averaged it and slashed it in half. Yep half. I decided I would try a loose budget. I would keep track using an excel spreadsheet of every penny we spent and track it against our “budgeted” amount. This wasn’t a strict budget, but a loose budget. If we went over I wouldn’t freak out, but I’d try to keep us under.
At this time I still allowed for cable, internet, cell phones, eating out, maid, etc. We were going to budget spending $150/month on cable/internet/phone, $70 cell phones, eating out $400/month, groceries $400/month, maid $200/month, Fun $200/month. Yep this was after cutting our expenses in HALF!
We were still spending a lot a month, but I decided for 2006 we’d start with baby steps on controlling our spending and living on a budget again. I still daily tracked and reconciled our spending, and our large travel expense was a 3 week trip to Japan and Hong Kong. We spent well over $6k for the airline tickets, dog boarding, hotels, etc.
Also in 2006 I launched my blog LivingAlmostLarge in November. I look back at my first post about goals by 30, and unfortunately with a decimated market, I doubt I’ll get there. But hey it was a good idea. I didn’t realize the impact my DH’s tuition would be on our savings.
So while we certainly were living quite large at the time, we had began to live more responsibly and on a “budget”. We were continuing down the path of financial freedom.
On Friday…I’ll continue the story.
7 responses so far ↓
1 Kristy @ Master Your Card // Feb 11, 2009 at 12:15 am
Wow, LAL! $400/month eating out AND $400/ month on groceries??????
I’m guessing you weren’t consuming everything you bought at the grocery store if you were eating out to the tune of $400. And I had no idea maid service cost that much either, how frequently did they clean your house?
As pf bloggers we talk a lot about how eating out really gets our pocketbooks, etc., but I think the real damage (not including the fact that eating out is so unhealthy) is when we try to eat out and still buy groceries. To me, that’s where the real waste comes in. I do this all the time. I know it’s a waste and I’m trying to get better. But, if I only spent $200 a month eating out and didn’t spend money on groceries, that really wouldn’t be all that bad. I haven’t mastered the skill of spending $100 or less a month on groceries, so I spend an average of $250-300 for food at the grocery store – in fact, I save if I were just to eat out, lol. But $250-300, in addition to the $200 eating out, is what really kills my budget.
2 LivingAlmostLarge // Feb 11, 2009 at 9:51 am
That was after I cut our budget from $800/month for eating out and $800/month groceries.
Oh it’s easy to run up a bill that much. And the food got eaten. I was buying only seafood (which I prefer) like fish, shellfish, etc. Or expensive cuts of steak. All organic foods for veggies, milk, etc. Everything was pretty much 2x the price or more of normal food.
And eating out? Well we would eat out Friday night, Saturday, and Sundays. With just those 5 meals x 4 = 20, plus takeout during the week at least once that’s 25 meals out a month for 2 people. At around $20/meal per person that’s $800/month.
We never wasted food, we were just buying a LOT higher quality stuff. Plus when we ate out, we went to nicer places previously! Like trendy in the city places! Not our more cheap eats now.
3 fengshui // Feb 11, 2009 at 9:41 pm
I personally would not be able to spend $100 a the grocery store in a month and still eat the type of foods that I prefer. I eat mostly organic, and that stuff is expensive! We spend (on average) “about” $70 a week at the grocery store. I eat convenience things sometimes like bagged frozen ravioli, bagged fresh frozen veggies instead of canned, frozen pizzas, snack foods such as chips and guacamole, diet coke, etc. It adds up. And we’ve cut out eating out/ ordering out in half. We only order out 1 x (sometimes 2) per week where we used to always order out 2-3 times a week. I would say we spend an additional $150 a month on ordering out. Sometimes, I just don’t want to cook… so I don’t!
One place that I know that I REALLY need to cut back on is my endless and unnecessary trips to Target. Sometimes I think that I go out of boredom instead of necessity…. I’m always spending between $75-$150 every time I go, and I usually go 3-4 times a month. And I get all kinds of things…. toilet paper, paper towels, cleaning products, laundry supplies (they now carry Mrs Meyers and Seventh Generation products), bedding, things for the house, clothes, vitamins, make up, and god knows what else…. I could have $5k sitting in a savings account if I wouldn’t have bought a single thing at Target in 2008….. 
4 LivingAlmostLarge // Feb 11, 2009 at 11:05 pm
Yep organic foods kill the budget! So does shellfish and seafood, or higher cuts of beef, lamb, etc.
Part III - evolving frugality - Feb 13, 2009
Dollar Frugal » Blog Archive » Carnival of Wealth, Money and Life - February 15, 2009 - Feb 15, 2009
Rich Life Carnival #32 | Rich Life Equals Better Life - Feb 18, 2009
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