Thursday, September 25, 2008

Number Crunching 125

09/13/2008 – 9/25/2008

Quicken Cash Flow = -134.41

“No shame, no blame.” This is a mantra from Your Money or Your Life, which I’m currently working through to regain my grasp on my finances. I may have to repeat it a lot during this post because I dropped the ball badly. But I can’t afford to get caught in the self-beat-up game.

Though my honest question to myself (the one that currently makes me squirm as I answer “I don’t know”) is why do I think I will hold onto the large chunk of money by ignoring it? I can trace my fall down to when I cashed my last student loan check. There has to be a reason for it, but I’m waiting for the epiphany.

Also I’m apologizing in advance for the length of this post. It’s going to be a dozy.

May – August Budget Meetings

Reconciling Quicken with Bank Statements: I have received all bank statements for these months and everything reconciled.

Reconciling last month’s budget: Well, here’s where it gets interesting, folks. I made a budget for May, so that can be done. However, I never created a budget for June, July, or August. I will forward May’s budget to the other three months to figure out what happened.

September 20 Notes: As you may have guess, I didn’t finish writing on the 13th. Power got disrupted in a thunderstorm and I didn’t have the printouts I needed. I finally got back to it on the 20th. Thunderstorm knocked out power again, and my computer battery charge lasted five seconds. Yes, it has been bugging me with updates to buy a new one and I just figured it was a pathetic sales tactic.

  • Idea 1: upgrade computer backup battery.
  • Idea 2: upload budget spreadsheet to Google Docs when I have to balance at work. Easier than keeping multiple files on flash drives.
  • Idea 3: Edit category list in Quicken to list Late Fees for different loans.
So now I’m tryin to finish this by hand so all I have to do is type when I get electricity back or get annoyed and plug-in the generator.

I think I spent thirty minutes trying to reconcile by hand. What I have figured out is I need a Quicken report with spending broken into Categories and then listed by each payment. I’m fairly certain that payments I made to medical debts ended up under Medical in Quicken (which is fine) but that’s not how I was trying to track them on the monthly spreadsheet. *headdesk*

After two teases with electricity being restored, I went to plug in the generator. Then power was restored while I was trying to do that. I decided no tempting fate and watched a DVD and saved the math for tomorrow.

September 21 Notes: Today, I did a check through the window before starting Quicken and Excel. Nothing but blue skies, so I got started. Why was the sky completely overcast when I took a break and went to check on the laundry? I have taken to printing every fifteen minutes so I should be able to finish by hand if I need to.

Results for May: I had five unexpected sources of income in May: a sale of things at Mom’s store, selling cans for recycling, a return to a store, borrowed from Dad, and a school loan. So I was left with a positive balance at the end of May, but not due to me watching my money.

Good points: I did payoff some outstanding liabilities, so I don’t have to worry about them anymore. I am upset that I paid the mortgage and CitiFinancial late, and I earned $274 in bank charges.

Argh, and now it is raining just as hard as it did yesterday. Do I press on or try again tomorrow? I’m voting for trying again tomorrow. My brain hurts and I’d like to play a game now.

September 24 Notes: I’m certain I have dragged all necessary paperwork to the paying job to finish this in my free time. Let’s see how right I am. Another thing to remember from now on: monthly Itemized Categories reports from Quicken get the job done much faster.

Results for June: I’m good with not messing up what is deducted from the paycheck, but heath insurance went up in June. I really can’t say that I overspent anywhere else since I hadn’t budgeted anything since May. I did end up with money left over; too bad I didn’t do anything constructive with it. I added a new bill: waste disposal with a new company split with my parents.

Results for July: July’s tabulations came out a tad odd. Because of the way my credit union works, it ended up being my three paycheck month instead of August. So I had a bundle of leftover, but I’m afraid it all got spent in August. Added a new bill: newspaper subscription that my father should reimburse me for since I never get to read the paper before he does. Ever. :p

To double check in Quicken (i.e. why reconciliation is never done) big jump in Atmos in July, go back through the statements.

Results for August: And as expected, August is the mouth I ended in the red. How was that possible with a little extra thanks to the way the paychecks fell?

Crap, I need to recalculate the previous months. This is the issue I have with how transfers are totaled in Quicken reports; I forget that I already categorized that money if I knew where I spent it. Okay, got that recalculated and must remind myself for next month that the transfer balance only shows deposits and withdrawals between the Quicken accounts. Quick answer for what I pulled out of the ATM, bad answer for what I spent it on. Back to where I messed up August question.
  1. I blew through nearly $600 and have no idea where it went. At the end of August, I put a correction into the Quicken Cash in Pocket account, since I stopped using the spending notebook in February. I didn’t spend it all in August but I had to balance Quicken at some point.
  2. I made nearly $600 in bank charges because I wasn’t watching my money. I think I could have paid off a year in my mortgage with what I have given the banks in NSF and overdraft fees. It has to end.
I also renewed my subscription to Big Fish Games, which was probably a bad idea all around.

Creating next month’s budget: Yes, I know September is practically over, but I can’t skip it. Especially since this is a pay week and I have to get bills in line. One ray of sunshine, thanks to Gustav, I qualify for disaster food stamps and I got them. It’s a one-time thing, but at least I can put $0 in groceries and no be lying to myself.

1st Step: correct all my deductions since health insurance plan changes went into affect back in July.

2nd Step: adjust the amount of all other bills—especially the ones on automatic payments. Most advice recommends you estimate on a yearly basis. I’m going to use the average of what I have paid for the last eight months.

3rd Step: go ahead and cuss because the amounts you have to spend have ran into the negative on a zero balanced budget.

4th Step: copy everything to October, erase negative starting amount, and see the negative amount decrease, but still didn’t go away. Damn, I was really hoping it was all due to the carryover from August.

5th Step: realize this budget is already blown because I have spent money in categories with $0 already this month. *headdesk*

6th Step: see if the check stub for this week is ready to print out. It is so plug in the numbers for the deductions at least.

7th Step: cuss the powers that A) made me come to work when I didn’t have to and B) paid me overtime for it and increased all the taxes I had just gotten normal.

8th Step: take a break, copy over October to November and December spreadsheets, undo everything in September to print out a beginning budget sheet.

9th Step: realize I do have the paperwork for how much I borrowed from Dad and add it in before printing. While doing that, realize the formula is wrong and probably wrong on every sheet. Fix sheets, plan to double check at home. Still have the negative amount. Give up and print.

10th Step: move onto next step in monthly budget review after vowing to not spend any money. Also deal with September in the weekly budget review.

Home edits to spreadsheets: adjusted May—wait a minute. If my course correction was done in Quicken in August? To bring me into balance with the actual cash in I had in pocket? Argh! Is August amount on spreadsheet now wrong because of what I have in other months?

Add in May’s adjustment to Quicken and change August adjustment. Now add in the rest. Okay, so I have to adjust the August spreadsheet again but at least I don’t look as bad in one month. I was bad, but it took longer.

Before I do that, double check Atmos bills. Right amount, but they took me off budget billing. Wasn’t aware it had a time limit. So onto fixing August. If I have everything right now, the bills are paid and I have money to buy gasoline in September. Now I’m going to add in what I have already spent in September. Oh goody, I had already put in my fuel allowance, now for the bills.

Determining how much cash to withdraw for the pay periods in the next month: Recognizing that my spending is out of control in certain areas, I think I need the envelope system. I also need more income and fewer bills, but I’m tackling things as I reach them.

Plenty of people have praised the envelope system as the only way to curb irresponsible spending. I have never taken the full plunge—too afraid to actually control my impulses and cause a bigger backlash. But something has to give with my personal mess and the greater economy mess. There’s no more time to be chickenshit over finances.

First thing is to figure out what categories need to stay on the debit card or in the checking account. So I color-coded September’s spreadsheet. Categories for the envelope system:
  • Household yard = 99.41 (60 months) 35.26 (8 months)
  • Household: maintenance = 99.41 (60) 335.26 (8)
  • Clothing = 11.93 (60) 27.44 (8)
  • Grocery = 54.02 (60) 104.81 (8)
  • Eating Out = 72.09 (60) 163.96 (8)
  • Personal Care: Items = 7.25 (60) 44.10 (8)
  • Personal Care: Workout = 3.66 (60) 9.38 (8)
  • Personal Care: Vitamins = 13.05 (60) 26.09 (8)
  • Personal Care: Massage = 4.67 (60) 7.50 (8)
  • Gifts Given = 7.93 (60)
  • Entertainment = 84.33 (60) 63.40 (8)
  • Hobbies = 44.69 (60)
  • Writing Expense = 7.58 (60) 15.62 (8)
  • Vet = 3.51 (60) 5.89 (8)
  • Donations = 0.41 (60)
  • Personal Money = 58.26 (60) 115.21 (8)
Even though I don’t have the money this month (or probably next month) I will spend money in these categories. I don’t need to spend as much as I have been spending. Since I had the totals, I decided to do monthly averages based on all my spending (60 months) and what I have spent this year (8 months). Now I need to settle on what I can reduce spending in. I’m not going to quit cold turkey, which leads to me going nuts with a windfall.

Okay, stopping for another night. My desks are a mess with paperwork everywhere.

September 25 Notes: Brief pause in this while I pay my bills and get my cell phone back in service. Okay, that’s done and got email confirmation. Now to check my phone. Huzzah, I’m connected again! And since I already reduced that bill, it shouldn’t be as painful the next go around. Back on the how much cash topic.

Yesterday’s math not the exercise in futility that I thought it was in the middle of doing it. My initial thought was to reduce spending in all categories. That thought quickly followed by how that has backfired every time I’ve tried it and I end up blowing the money in the vending machines (which is a whole different but related to money issues problem).

So while fixing the spreadsheets last night, I remembered the “60% Budget Solution” article. I had despaired the last time I tried to set it up and moved to zero-based budget. But I thought it could work for the cash categories. I could make much broader categories for the envelopes, but once the percentage of money allotted is gone, it’s gone. And it wouldn’t matter if I decided to buy clothes instead of eating out or going to a movie. (I know, I know, the goal is to leave money in the envelope and toss it to the wind, but I’m trying to work around the stubborn mule inside of me who throws a spending tantrum upon hearing can’t. Oy, that’s bloody good symbolic imagery that I must explore later.)

This morning I grouped my expenses into stay-in-checking-account bills, debt payments, savings, and pay-for-with-cash. Then using the amounts I had budgeted, I calculated the percentages of my gross monthly income.

Bills = 73.71%
Debt payments = 33.19%
Savings = 1.92%
Cash = 0%
Total = 108.82%

After I stopped twitching over the overspending built into my lifestyle, I started tweaking and settled on this is what the percentages should be:

Bills = 63.39%
Debt payments = 19.69%
Savings = 1.92%
Cash = 15%
Total = 100%

Upon adding up the totals of the categories I figured out yesterday, I found this:

8 months average cash spending total = 706.95 = 27.14%
60 months average cash spending total = 572.20 = 21.97%

Since my historical spending is between 27% and 21%, reducing it to 15% is doable. Now reducing the bills and debt payments is a whole different barrel of monkey bats (If you have made it this far and recognize the quote, I will send you real cookies—not just virtual ones.)

Does any of this tell me how much I can draw out today for the next two weeks since I’m already in the budget black hole? Not entirely sure yet. My car insurance and mortgage payment are both past due, and I don’t have enough to cover them, much less my loan payment. What is left needs to stay put for gas payments and to get my brakes checked. So the answer is “no” for this pay period.

Automatic Payments:

Missed in August: Liberty Mutual
Atmos Gas – paid in September
Demco – paid in September
Missed in September: Liberty Mutual
GMAC Mortgage

And there is not enough money left in the checking account to cover them. So I have phone calls to make at lunch, and I have no idea what the verdict will be—since I won’t be able to afford a double whammy from any of them in October.

Verdict of calls:
  • CitiFinancial – already moved September’s payment to the end of the loan because of Gustav. Just pay October’s bill normally. So how did the evil personal loan lenders end up being the most understanding about a hurricane?
  • Liberty Mutual – taken off automatic payments and need to call in as much as I can on the past due when I get paid again on October 9th. Changed the deductibles and got $92 credit on last bill and I can change again after renewal in November.
  • GMAC Mortgage – set me up with a repayment loan (probably not the proper term for it I didn’t note it) that has no grace period for the next six months. I have to make phone call payments and I think I can pay it off early, if I end up in that situation, but will have to wait on the letter to explain that again.
  • Sallie Mae – cancelled online payments that I accidently signed up for. Call center guy was adamant that I didn’t need to turn in a deferment form that he couldn’t find where I had faxed it anyway. Funny, the two people who called me before Gustav hit and then right after were adamant that I had to have it and have mailed it to me twice. Need to call the phone number on the letter and find out what’s going on.
Not going to lie; the mortgage shuffling is going to be tight. Luckily, I get paid on or before the 10th all six months.

Reviewing Short-Term Saving Goals: It is time for me to get serious about getting out of debt. 33.19% of my monthly income is nothing to dismiss. I can barely meet my bills, I can’t save, and let’s not talk about groceries.

Side note but related I promise: I’m going to look for another job, part-time while I finish school and start my Internet revenue stream. Wal-Mart is currently hiring, Winn-Dixie had a sign up too, and Best Buy is opening in Hammond and will be having a job fair. Retail sucks, but desperate times….

To manage this debt nightmare, I’m going to follow Dave Ramsey’s Total Money Makeover with a few modifications. As Cash Money Life explains, it’s “a rough guide, not an absolute road map.”

Step 0 is no more debt. Okay, no more borrowing and I’m going to get a second job to meet in the middle.

Step 1 is establish $1000 emergency fund. And here’s where I veer away, since I established way back when my STEF needed to have $2202 in. For now, I’m going to stuff it into my second credit union saving account that’s not tied to my primary checking, nor is it accessible by ATM. I might move it later and get a better interest rate once the economy stabilizes a bit more. And since today is payday, I moved half of my automatic savings to the restricted account bringing the balance to 149.96. Great, I’m already on my way! And if I’m really good with my checking account, hopefully the other half won’t get spent and I can add it too.

Update NetworthIQ statement: If nothing else didn’t hurt like a MF, this will.

Yeah, I knew that wasn’t going to be pretty.

Update NCN Savings Chart:

*Snort* Well, I totally screwed up on my goal date, didn’t I? And that’s information I can’t update. Still the money amount is right and that’s what matters.

Overview and Plans: NEVER let this get so out of control for so long. I CAN’T AFFORD IT!

  • Brake check for car Saturday
  • Upgrade computer battery backup
  • Upload budget spreadsheet to Google Docs
  • Reduce bill spending to 63.39% of gross monthly income.
  • Apply to Best Buy
  • Apply to Winn-Dixie
  • Apply to Wal-Mart
  • Finish Your Money or Your Life
  • Restart weekly budget meetings
  • Finish Internet project so to go live
  • Use monthly Itemized Categories reports from Quicken to reconcile
  • Set up a small expandable binder/folder (like for coupons) for money envelopes
  • Unsubscribe from Big Fish Games
  • Contact Atmos about budget billing
  • Analyze the stubborn mule comment
  • Call phone number on letter for my deferment form
  • Organize financial binders and paperwork
  • File paperwork
  • Call Sonnier Chiropractic. for what Datapath needs
  • Need to add PayPal and Revolution Money Exchange accounts to Quicken and October spreadsheets
  • Rename Transfers between Quicken accounts to “Added to account name” instead
  • Give STEF balance its own worksheet in the spreadsheet file.

My Gods, I actually finished this damn post. Eight pages long in Word. I’m already flinching to see how long it’s going to look on screen. Sorry, but I did warn you.

Read Free!
The BookWorm


Sharp said...

That was epic. Good luck with your finances. I know first hand how getting your spending down seems almost impossible sometimes.

KLCtheBookWorm said...

I warned you. I warned everyone. And it should be telling my mental state when the first quote that pops into my head comes from a guy with only half a brain.

Now I have the fun of going job hunting for something part time, that I can train for on the weekends, that yes, I'm over-qualified for but I'd like to get paid for doing brainless XYZ right now.

I think I'm going to have to work on my enthusiasm.