Wednesday, November 12, 2008

My Jar and Budget System

It has been requested that I (attempt to) explain my jar and budget system. I'm still new to this whole budgeting system, so I'm sure there are still kinks to be worked out. But so far, so good...and it works (on paper!)

Now, with that said, I'll try to guide you through the process that led me to my "jars" and where I am today. It is a ton of information, I know. I'm going to do my best to keep it as basic as I can, and give examples where ever possible. I'd like to say it isn't confusing, and I really don't think it is. But if you are coming from a different system, or no system at all, this may seem somewhat overwhelming. Stay with me, and I think I'll eventually explain it all by the time you get to the bottom of the post. Also, all numbers in this explanation are hypothetical. They are NOT my actual budget.

When I decided that I needed a bona fide budget, I sat down with my notebook, a calculator and a pencil and started scribbling away. We are fortunate enough to know exactly (within pennies) what our income is each month, and we get paid on the 1st and the 15th. Next, I determined what all of our bills were, and how much I was actually paying towards them. I pay the mortgage only out of one check, and all other bills out of the other check, regardless of due date. It works out to be roughly the same amount out of each check going towards bills, so that is why I chose to handle it this way. I also determined how much we owed to credit cards. Equipped with all this information, I was able to establish my budget. (Using the 1st paycheck, here is a hypothetical breakdown and explanation to my madness...I will try to make this as simple as possible.)

$3233.56 deposited
$3200.00 (round down to have a nice round number to start with and a small buffer of $33.56 savings)
- $320.00 (10% savings)
- $320.00 (10% debt)
$2560.00 (this is the amount I actually have to work with)
- $1800.00 (mortgage)
- $500.00 (this is taken out in cash for my Jars)
$260.00 (leave in the bank)

Now we move on to the Jars. It is like the "envelope" system that many people use. However, I decided that envelopes were too easy to put into my purse and keep there. I knew I would need some sort of system that made me make a conscious decision to get money out of a jar for this or that, and not just grab a stack of envelopes and dash off to the store. It meant I had to plan ahead. It also meant that my husband had equal access to the money as well. And they aren't really jars at all - rather they are plastic food containers I picked up from the Dollar Store. I have the following "jars": groceries, gas, clothing, entertainment, gifts, health & hygiene, J's lunches, haircut, school, cleaning/laundry/paper products, miscellaneous, and nails(manicures.) I also have an annual bill savings file for AAA membership, vehicle registrations, and Sam's club membership. On payday, I go to the bank and take out my $500.00 in ones, fives, tens and twenties. I then go home and divide the money up into the jars. I have already determined how much each jar will receive, and it will be the same amount every paycheck. This makes life simple. So I break it down like this:
  • Groceries $150 (ONLY edible food)
  • Gas $100 (for all vehicles)
  • Clothing $30 (for the whole family)
  • Entertainment $20 (go to the movies, popcorn at the movies, movie rental, etc)
  • Gifts $15 (for birthdays, baby showers, get well cards, weddings, etc.)
  • J's lunches $5 (he can pick 2 days that he would like to buy hot lunch at school)
  • Haircut $10 (I'm the only one that pays for haircuts)
  • Health & Hygiene $20 (cough drops, razors, toothpaste, shower gel, ibuprofen, etc.)
  • School $5 (this ensures that there is money for field trips or other school related expenses)
  • Cleaning/Laundry/Paper products $20 (409, laundry soap, toilet paper, etc.)
  • Nails/manicure $20 (I get my nails done each month)
  • Slush funds $20 ($10 each to both myself and David - it means that we can get a coffee or whatever and this money does not have to remain accounted for.)
  • Miscellaneous $50 (covers for any overages or needed extra money in any area. This is also where J's "paycheck" comes from - another post entirely)
  • Annual bills envelope $35 (AAA, vehicle registrations, Sam's membership)

In some jars, I'm saving for something like a haircut. In other jars, it is what I have to spend. If I don't spend it all, it remains in the jar. I don't have to buy clothes each month, so that money continues to accrue. Then when clothes are needed, there is money available specifically for that need. But when the money is gone, it's gone.

Back to the bank account. As you can see, there is money left over. This allows for unforeseen emergencies. However, if by the day before the next paycheck, there is still all this money in the account, it gets transferred out to savings so that the next paycheck comes into an empty account. Using the above example, I would transfer $293.56 to savings. This includes the $33.56 saved off the very top plus the $260 left after everything was paid. Get it?? So, for this check alone, I have saved $613.56 with my 10% included in this number. I'm also $320 closer to paying off credit cards.

Now lets move on to the next paycheck on the 15th:

  • $3233.52 deposited
  • $3200.00 (saving $33.52)
  • - $160 (5% saving)
  • - $480 (15% debt)
  • ---------
  • $2560 (my available money)
  • - $1920 (bills, and this number should remain the same)
  • ----------
  • $640
  • -$500 (jars)
  • --------
  • $140 (leave in the bank)

OK, now lets discuss "debt." My credit card payments are not included in the bills. They are being addressed twice a month out of the "debt" money being taken off the top of the paycheck, and I'm using the snowball method for paying them off. This means that all credit cards will have slightly more than the minimum payment made, and the rest of the money will be applied to the highest APR card until that card is paid off. Once it is paid off, all money gets focused onto the next card with the next highest APR until it gets paid off, etc. This cycle continues until all the credit cards are paid off. Also, if you noticed, out of this paycheck, I have only 5% going to savings and 15% going towards debt. I'm still working within the same 20%, but I'm trying to get my debt paid down as quickly as possible. I am aware that I could apply less to savings, and more towards debt to pay it off even faster, but I chose to make sure that we have money set aside for emergencies.

Now, on to the bills. This amount should remain the same every month. I'm saving whatever is leftover after paying each bill. It will balance out in the end. Here is what I mean. For example, I have a budget of $200 for the electric bill. However, this month my bill was $129.37. I pay the bill, and transfer $70.63 (the difference between my actual bill and my budgeted amount) into a savings account set up specifically for the purpose of holding the monthly bill savings. Now lets hypothetically say that my bill next month is $212.44. I won't have to readjust my budget for the month because I have $70.63 in savings specifically saved for the electricity. So I transfer back to checking $12.44 to cover the balance of the bill, and I still have $58.19 in savings. Are you still with me?! Now, like the last pay period, whatever is left in the account the day before payday gets transferred over to savings. This time my total would be $173.52 ($33.52 at the very beginning, and $140 that was left in the bank.) This means that for this whole month, I have saved a total of $947.08. And I've paid off $800 in credit card debt.

OK, now I'm sure you are asking how I'm keeping this all straight as the months move along, right? I use Microsoft Money. Using the above example for the electric bill, when I transfer money into the savings account, I assign that it is as an overage (category) for the electric (subcategory.) Later, I can choose to look at a category/subcategory to see how much is available.

I understand that my system is more detailed than most would use, and that is fine. If you decide to use any of my ideas as jumping off points, please feel free. Make the adjustments you feel necessary. Add a jar here, tweak a jar's purpose there. Like I said at the beginning, I'm still settling in to this particular system, and there is room for adjustments. But, after a lot of long evenings scribbling away on my notebook, this is what I have come up with that works for me. If you have any questions, please leave me a comment and I will try to answer it the best I can.

For all sorts of other tips and tricks, check out Rocks In My Dryer. There is something for everyone over there!

Monday, November 10, 2008

Menu Plan Monday (Nov 10-16)

This is my second time posting my menu for the week, and my fourth week of planning. Last week went fairly well, but I did end up switching to the Chicken Noodle Soup because my husband felt like getting sick, and yesterday we didn't get to the Tortilla Chicken Bake. Otherwise, it was nice to have it all laid out there what we were having each day so there wasn't much thought or energy required. And my son is loving that he can go read what is on the menu each night. Now, if only the little Monkey would figure out this reading thing!!
  • MONDAY Chicken Tortilla Bake (this is a new one for us - I'll post the recipe if it's any good!)
  • TUESDAY Tuna Melts
  • WEDNESDAY J's birthday dinner!! Burgers, baked beans, fries, pistachio jello salad and chocolate cake. Happy 8th birthday!!
  • THURSDAY Chili Mac (using chili from the freezer)
  • FRIDAY Grilled cheese and soup
  • SATURDAY Mac & cheese (just me and the boys for dinner, so I geared it towards them)
  • SUNDAY Leftovers or a sandwich

For more menus, check out orgjunkies page.

Gotta love club cards

I haven't done too well staying within my grocery budget this month. On Thursday, I had to take David to the doctor, so I was on an AFB which meant I was by a commissary. There were simply some deals that I couldn't pass up, so I stocked up on some stuff. (If you've never been to a commissary, here's the scoop - you never know what the price will be. We as the consumer pay whatever the commissary paid plus a 5% surcharge, no tax. Sometimes, even with the surcharge, it is still much cheaper than at the grocery store. However, it is always hit or miss when it comes to prices. A deal is usually a really, reallly good deal and no deal means it's probably cheaper elsewhere....and you never know what you will find or when you will find it at that price again.) Here were a few of my steals:
  • Campbells Cream of Chicken soup...60¢/ea
  • Creamora (35oz) ...$2.79
  • Theraflu Severe Cold...$3.42 - $2 coupon = $1.42
  • 2 Celestial Seasonings teas...$2.78 - $1.55 in coupons = $1.23
  • 2 Kellogg's Frosted Mini Wheats....$3.98 - 2 $1 coupons = $1.98
  • 2 5# bags Gold Bread Flour...$3.20 (that's $1.60 each!!)
So as you can see, some of the groceries I got were really good deals...but I'm more proud of my Safeway trip yesterday. As I said, I haven't stayed in budget. But Thanksgiving is coming up...hopefully without holidays, I'll do better. (Sorry, no pictures of my well-planned shopping trip, but I'll lay it out with full prices to show you what I saved!)
  • case of water $3.77 + CRV $1.20
  • 2 Safeway "cool whips" $5.78 (paid $3.50)
  • Pkg of hamburger buns $4.38
  • 9.86 pounds of oranges $18.63 (paid $6.81)
  • 3.13 pounds of Roma tomatoes $6.20 (paid $3.10)
  • 14.57 pound turkey $14.42 (paid $5.99)
  • 14.91 pound turkey $14.76 (paid $5.99)
  • 20.25 pound turkey $20.05 (paid $7.99)
  • 20.70 pound turkey $20.49 (paid $7.99)

I looked at the total of $111.40 and then handed her my club card and it magically said $50.72. Then I handed her my "Save $10 on any purchase of $50 or more" coupon and my grand total became $40.72!!! (And that included 70+ pounds of turkey!!) I had a savings of 63%.

As I said, gotta love club cards!

Tuesday, November 4, 2008

Works-For-Me Wednesday

(**Today, there was a theme over at WFMW, "toys worth buying." I must have missed that memo, or I still have money saving ideas on the brain. Either way, my post link looks a little out of place over on Rocks In My Dryer's page. Sorry if you were looking for my list of amazing toys, I don't have a list at all...I'll have to get on that. But for now, you can read about kleenex! Again, sorry for any confusion...)

Growing up, kleenex was just something that we didn't have in our house. We had toilet paper. I remember having friends over and they would inevitably ask where a kleenex was, and I would have to point them in the direction of the bathroom where the toilet paper was (typically) located. As I got a little older, I eventually wised up and always kept a roll of it in my room so that I didn't have to send them to the bathroom for our version of kleenex.

Fast forward a few years, and kleenex just managed to become one of those "must haves" for me. It still is. I have boxes everywhere you turn. I keep a box in each bathroom, one in the living room, one on my desk and one in my car. Trust me, if I could find more places to keep them, I would - but these are all well-placed, so they are easily accessible from just about anywhere in the house.

So, with all of the ways I'm trying to save us money, how do I fund my kleenex addiction? I buy it after holidays, of course! I have cute Longaberger baskets and kleenex box covers to hide the actual box, so it doesn't matter what the box looks like, its always hidden. The day after Halloween, I bought 5 packages of the double-boxed, purple and orange and ghoulish-looking, kleenexes for $1.49 each (that's 50% off and that made them 75 cents a box!) It's a good thing I grabbed them, too. I was completely out of my stockpile. And with David being sick, he's been sailing through the kleenex - - he has been carrying around his own box for 2 days now! (Poor Guy!) I have my fingers crossed that I'll have enough stockpiled to get me through Christmas when I can stock up on Christmas boxes of kleenex for half off...

So there you have it... Stock up on kleenex after holidays and you'll save money, and that works for me!!

For more tips and ideas, head over to Rocks In My Dryer.

Monday, November 3, 2008

Mmm Mmm Good

No, I'm not doing a Campbell's soup ad, although the chicken noodle soup that I made today was quite tasty. And if you read yesterday's post, you would have seen that we were supposed to have omelets for dinner tonight. We obviously didn't. David looked and sounded awful, and felt 10x worse than he looked or sounded, so Chicken Noodle Soup it was. To make today even more fun, Jordan had to stay home today for looking and sounding like Daddy. Nothing like having a houseful of sick people!

The following was the highlight of my day - you know, besides the trip to the store for more cold medicine and cough drops, with coughing kids, and all the other stuff that comes with sick kids (and husbands)....

Honey White Bread
(designed for the bread maker, but I only do the dough in the bread maker. You can make the whole thing start to finish in the bread maker if you wish.)

1 1/4 cups warm milk
1 1/2 Tablespoons honey (stir the spoon in the warm milk to get ALL of the honey)
1 1/2 Tablespoons butter shortening
1 1/2 teaspoons salt
3 cups bread flour
2 teaspoons yeast

Put all the ingredients in your bread maker on the "Dough" setting. Let the machine do its magic. After the dough is done, take it out of the bread maker and shape into a loaf-ish shape and put into a greased bread pan. Let it rise in the pan in a warm place for 30-40 minutes or until the dough doubles in size. Preheat oven to 350 degrees. Bake the bread for 19-20 minutes. Immediately remove from pan onto a wire rack to cool. Brush the top of the bread with butter while its still hot.
(**we have a double oven, so I turn the lower oven on LOW and put the dough in the upper oven to rise.)

This was the best loaf of bread I've made. It was delicious, and it also went very well with the soup.

Now I'm stuffed, so I'm off to take a nap. I'm trying to ward off any possibility of getting sick (yeah right!)

Sunday, November 2, 2008

Menu Plan Monday (Nov 3-9)

I'm going all crazy and out on a limb here. I've been making a weekly menu plan, and so far it has been working! Yay me! I've also been enjoying lurking around on various blogs seeing this "Menu Plan Monday" and so I'm going to give it a try. Here goes...

Monday - Omelets (or if my Hubby gets any more sick, I'll do a quick switch to Chicken Noodle Soup)
Tuesday - Chili (double batch and freeze half)
Wednesday - Mac & Cheese with tuna and peas
Thursday - Spaghetti
Friday - Leftovers
Saturday - Pumpkin Pancakes
Sunday - Chicken Tortilla Bake

For more ideas, check out