Purchases: Week Three

Instead of listing purchases this week, I'm going to give an update on the budget categories.

Groceries: We hit our budgeted amount for groceries for the month, so either I have to buy nothing next week, or I need to pull from another category and do without something else. The good news is that I spent the rest of our budget for groceries on long term storage that will last for months. I bought chicken at a great price.

Clothing: We're under budget in clothing. I spent about 75% of our budget, so I could spend the rest this week, but I don't need to.

Dining Out: Just bought a few ice cream cones for the kids after piano lessons (the free ones, remember?)

Gasoline: Right on budget, and we have two full tanks. Since we don't shop as much this month, we're saving tons on gas. I'm not super strict about combining my shopping trips--I went out on Saturday just to buy some paper to make cards.

Household Consumables: Right on.

Household Non-consumables: Love to buy a huge leather couch, but our lovely floral sofa will do fer now. We really didn't buy much this month.

Recreation: I bout some paper and counted part from the gift category and part from the recreation category. We really need to get babysitting and get out more. It's in the budget!

Gifts: I was able to make two batches of truffles and give gifts to my friends who had birthdays this month. I also made sure my husband (who has supported me through this month of poverty) got plenty of truffles.

We're doing all right...and just a few more days left.

How To Stick to a Budget

What 's the best way to stick to your budget once you've created it? The Budget Fairy* has five helpful tips that will help you stick to your budget:

1. Self control means putting off something you want today for something you want even more tomorrow--and sticking to a budget requires plain old, unsexy self-control. Self control means that if you put an impulse item in your cart, you should impulsively put it right back on the shelf.
   
2. Print your budget. Print out a copy of your monthly budget and keep it with you. There's no way you can remember the amounts you budgeted for everything. Print it out and keep it tucked in your bra. (Or wherever you keep important stuff.)
   
3. Break it down. Break down your monthly budget into a weekly budget. If your family budgeted $200 for groceries for the month, that's $50 a week.
   
4. Review your budget often. It's not only helpful to do frequent budget reviews, it's also a morale booster. When I can look at our grocery budget for the month and see that we've spent half of it and we're half way through the month, that makes me happy. (Yes, in a dorky Dave Ramsey sort of way.)
5. Save receipts. Saving receipts and then entering them into a logbook or money program on your computer is so boring. But it helps. It holds you accountable and forces you to assign each of your purchases to a budget category (which you mentally should have done before you made the purchase.) Walmart receipts are the worst because so many budget categories are on one receipt. McDonald's will always be in the dining out budget category.

Stick to your budget, and at the end of the month you'll have a great feeling--legally, that's all I can promise you. But there's also a good chance that if you stick to your budget, you'll spend less, waste less and save more. Not bad!

*The Budget Fairy, while not as sexy as the Tooth Fairy, is very cute--in a dorky Dave Ramsey sort of way.

How to Create a Budget for Household Non-Consumables

How much should a family plan to spend for Household Non-Consumables? You know, the stuff that you buy but don't plan on throwing away any time soon. A clock for the kids' bedroom? Sure. A new set of sheets for the master bedroom. Perhaps.

This budget category is for purchases that are going to be around for a while, so choose well. Poor-quality will end up costing more in the long run. If there is nothing to buy this month, you may want to save unspent budget money for a larger purchase next month.

HOUSEHOLD NON-CONSUMABLES
(Budget for family of six- $75)

Small Appliances
blender
toaster
hand mixer

Tools
hammer
drill
saw

Furniture
mattress
bed
bookcase
chairs

Home Decor
clock
wreath
picture frames
lamp

Linens
sheets
pillows
towels
blankets

House
mop
broom
scrub brush
storage bin

Toys
bike and helmet
bike lock
train set
board games

What else should go on the list?

How to Create a Budget for Household Consumables

How much does your family spend on Household Consumables? You know, things like toilet paper, toothpaste, paper towels, detergent and soap...things you use up and throw away.

When creating a budget for Household Consumables for your family budget, it helps to look at what you actually need. Toilet paper? Yes! Hair dye? Maybe Purple hair dye? Maybe not.

As you go through these categories, your family may have different needs. Be sure to factor those into your budget. Also, don't be afraid to reassess items that you may be accustomed to, but aren't necessarily "essential." Can you live without contact solution? You can if you wear your glasses. Can you live without hairspray? Try it for a week and see. Do you need batteries for your smoke alarm (yes!) or kids' toys? Hint: The toys that take batteries are usually the loud, annoying ones...

HOUSEHOLD CONSUMABLES
(Budget for family of six- $50)

Toiletries/Health & Beauty
diapers and wipes
toilet paper
feminine hygiene
contact solution
shampoo
soap
deodorant/baking soda
lotion
lip balm
makeup
hairspray

House
lightbulbs
batteries
all-purpose cleaner
trash bags

Office
printer paper
printer cartridge/toner
tape/glue/staples
mailing supplies
postage stamps

Kitchen
liquid dish soap
dishwasher detergent
sponges or dish cloths
paper towels
waxed paper/foil/plastic wrap

Laundry
laundry detergent

What else would you add to this list of Household Consumables? What would you take off the list?

How to Tighten a Tight Budget

Oh, that we all had a family budget as tight as a dish (as watertight as a ship). Throughout this experiment in living well below the poverty line, we've had a chance to reassess our budget, check for leaks and make improvements.

After grocery shopping this week, I looked over my receipt and noticed--I'd been robbed!! Smith's Food and Drug had overcharged me on four separate items. I returned to the store and took full advantage of their company policy: "Free if the item is under $3, and $3 off regular price if it's over $3." Patched a hole! At Albertson's today, I bought a package of beef. When I returned home I opened the package to find the beef was blue on the bottom (goodbye beef!). Patched another hole!

A tight budget, like a tight ship, means that the money goes where you want it to go. There are no leaks or gaping holes. Are there places where your budget is leaking? Are there holes you can patch up? Is your budget tight? Could it be tighter?

Dining Out
Prepared Foods
Overcharges
Poor Quality Merchandise
Walmart
Dollar Store
Fines
Fees
Infant Formula (versus nursing)
Magazine Subscriptions
Nutritional Supplements
Cable TV
Credit Card Interest
New Car
Car Payments
First Run Movies
Plastic Junk Toys
Memberships
Auto-renewall
Fads
Impulse Purchases
Forgotten Expenses

Our Poverty Budget

Every family needs a budget.

Before we embarked on the Poverty Project we had a budget. When my husband was in grad school, we had a budget. When we were first married (and actually were living in poverty), we had a budget.

Budgets hold you and your money accountable. Here's our budget for the Poverty Project:

Income $2,416
Mortgage $1,000
Utilities (water, gas, electric, trash) $190
Auto: Gasoline $85
Groceries $200
Dining Out $20
Clothing $50
Student Loans $135
Household Consumables $50
Household Nonconsumables $75
Household Repairs $30
Tithing (10% + $10 donation) $251
Gifts $10
Short Term Savings* $220
Internet $55
Recreation $30
Long Term Savings $15
TOTAL $2,416


*Short Term Savings is for items that we pay for yearly. The idea is to save a little each month, so that when the lump sum comes due, we have enough to pay for it. The five items in Short Term Savings are : $15 for auto licensing, $85 for car repair, $25 for Vonage phone service paid in advance, $20 for vacation fund, and $50 for insuring two vehicles.

Do you think this budget is realistic? What's in your budget?

Poverty Project

"Can a family of six live comfortably in poverty without government or family assistance?"

Our family of six is going to live below the poverty line for one month--without any kind of government or family assistance.

The catch?

We're going to try to live well below the poverty line while living well below the poverty line. We'll try to eat whole foods, have fun, purchase high quality clothing, save a little and spend a little. We budgeted for recreation and savings.

The rules for the Poverty Project:

1. We must live on $2416 a month ($29,000 a year, for a family of six)
2. We must pay mortgage, bills, debts and expenses from our "poverty budget"
3. We will post the receipts for any purchases we make
4. We will not put our children at risk in any way (We'll provide adequate clothing, food and health care)
   

Want to join us in this project?

Projected 2009 Poverty Guidelines

Persons in Family or Household	48 Contiguous States and D.C.
1	$10,730
2	14,450
3	18,170
4	21,890
5	25,610
6	29,330
7	33,050
8	36,770
For each additional person, add	3,720