Month 3 | Binge Spending

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I'm sitting here calculating this month's numbers, and I gotta say, it doesn't look good.  I began this month with a trip to go meet the new boy's parents.  I have to say, I set a budget of $300, and I came in at just under $200!  However, I think the fact that I had so much financial aid left over kind of screwed me.  I think that my subconscious mind was thinking "Ooo, look at all the money you've already saved this month.  You don't need to stick to your budget.  Heck you don't even need to look at your budget."

And I didn't.

Until this morning...  I seriously have not tracked one item I have purchased this whole month!  If you want a sneak peak into what my-old-spending-habits-that-are-not-changing are like, I've posted my monthly spending tracker below.  UGH!  Do you see all of the red?  Red is not good.  Red is money I could have saved. 

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$957.00!

I think I'm going to be sick!

As usual, I'm hoping next month will be better.  I'm hoping that this sick feeling lasts long enough to force me to get my butt in gear and not screw around for another month.

Month 2 Made it Through...Barely!

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I am so discouraged!

Month 2 was a total fail.  I feel like the fact that I forgot to factor in Tuition and other school expenses into this month's projected budget set me up for disaster.  When I planned my August budget with tuition and books factored in I wasn't expecting to "save" any money at all.  To make ends meat, I cut everything out of my budget this month except for my necessary bills and retirement savings (yep, even groceries were gone, and I've been eating a lot of pantry goods and frozen meals).

I wasn't sure if I was going to qualify for financial aid from my school because as of last year, I had exceeded the allowed number of credits for any student.  Basically they said I have been in school too long, and they're not helping me pay anymore.  Although I appealed it, and was given back my financial aid, every semester since then has been a game of Russian Roulette, and I'm usually on the loosing end.  Last year I didn't find out my financial aid didn't go through until classes had started.  Imagine my excitement when I received a letter telling me that I had one week to come up with $3,000 or else I would be purged from my classes.  That's why I had to take out that ridiculous Signature Loan. 

While I originally saved quite a lot after the first pay period this month.  ($516.00), I was feeling so discouraged by the 2nd half of the month that I went into crazy.bad.habit mode and overspent most of my potential savings/tuition!  What I had left ($100.00) was not enough to make a dent in tuition, so I put it towards the Signature loan.  I'm hoping my financial aid comes through.  I feel so disappointed and anxious and stressed out, and I'm kicking myself as I review where I went over budget:

• Food ($197):  Cutting out groceries was a huge mistake, because there are only so many Cup'o Noodles I can eat in a month before I go crazy.  I ended up eating out this month more than I ever have in my life!  Normally I budget $100 a month for groceries, and $0 for eating out.  Of the amount I went over budget in the food category, $156.00 was from eating out!  Seriously? It would have been so much better if I had just budgeted even $50 for groceries.  Since I don't eat fast food, eating out cost me a fortune because I had to get food from "nicer, healthier" places.  Thomas' birthday was also this month, so I decided to take him out.  We didn't do anything super expensive, but I paid for dinner and dessert.   
• Taxes ($23):  Taxes get me every month!  I never know how much to budget, and my estimations are always wrong.  Maybe next month I'll just highball the figure!
• Entertainment ($127):  While I try to do as many free activities as possible, sometimes spending money is inevitable.  It's times like this that I wish I had purchased a $100 emergency gift card.  I know a girl who is new in town and doesn't have many friends.  She asked me to go to the movies, and while I had told her about my Spending Fast, she wasn't really getting that "movies isn't something I consider a necessity."  So I ponied up, and went... twice.  I also purchased a portable DVD player for an upcoming road trip (I justified it because I had a gift card, and bought it refurbished so it was like half off).  I also bought a few songs on iTunes and two books.
• Personal Care ($123):  I own two pairs of jeans, which I wear literally every day.  One of them ripped, and while I tried to sew them (make do & mend), the only way to save them was to turn them into Capri pants or shorts...  I needed jeans.  I bought two pairs at Forever 21 for just about $11, and bought some shoes too.  I'm still trying to force myself to return them.  I also purchased a gift for Thomas' birthday, as well as some fabric.  Since I started going back to church I realize I don't own any skirts or dresses.  Trying to be thrifty, I decided that making these items is much less expensive than buying them, and I'm right.  Fabric for a pencil skirt costs $12, an actual pencil skirt costs at least $20.  Bargain right?  Sure, just as long as you don't run out of fabric and have to spend $50 to "Special Order" more!  D'oh!
• School expenses ($119):  I had to purchase textbooks and pay for a campus parking pass.  Most of my leftover money went for this this month.  Ugh, if my financial aid doesn't work out I'm going to have to pay my tuition out of pocket.  That means no money towards my house down payment for the next four months!

So there you have it, I went over budget $589.00!!  Wait what?!  Where did that money even come from?!  I feel nauseous.

Luckily, I did have some extra income this month.  We had a problem at work a few months ago, and because of it, everyone is required to work 4-8 hours of overtime every week until further notice (probably through the end of the year).  I have been maxing out my hours, and I'm so glad because without them, I probably wouldn't have finished this month with my head above water. 

Everything I made on overtime pay went directly to my MMA account, either for my house, or in case I end up needing it to pay tuition, and all of my regular leftover Spending Fast Savings went towards my Signature Loan.  I know it sounds counter productive, but I'm trying to pay off the Signature Loan I used for tuition last year, so that if my financial aid doesn't go through, I can take out another one.  I am willing to empty my current Spending Fast savings, but I still have only saved about ⅓ of what I need.

My total savings for the month of August is $1158.00!  I am so excited by this number, especially considering I wasn't planning on saving anything.  I am kicking myself for going over budget as much as I did (A monthly tuition payment!)!  To think, I could have saved a whopping $1747.00!  I'm also a little nervous that my online bank statement, and my excel money tracker aren't matching up...  My tracker says I should have about $150 more leftover than I actually do.  Where is the missing money?!

On the bright side, this month I was able to reach 6% of my total savings goal of $20,000; so despite everything else, that was at least exciting!  This, my friends is totally depressing!  I am sick to my stomach at how easy it was to fall into old habits.  I've decided I'm going to stick with it though.  I said one year, and I'm going to do one year, and maybe more. 

Next month my goals are to get better about creating a more realistic budget, planning ahead (for things like school) and I am also instituting the Envelope budget.  As much as I love how easy it is to track my spending with my debit card, clearly I am not responsible enough to be doing that yet.  I need cash.  That way, when I'm out, I'm out!

  

Where Did the Savings Go:

$546 to Money Market Savings Account
$294 to my Roth 401K

$0 to Emergency Savings Account (This all went towards my Signature Loan)

$318 to Signature Loan (Student Loan for last year's tuition)

Potential Spending Fast Hold

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I have encountered a large bump in the Spending Fast road...

That bump is more commonly known as tuition.  Every semester, it seems as though I have "issues" (to put it nicely) with my financial aid.  I qualify for it, the government awards me money, and then my University thinks of a reason not to give it to me... I often wonder if they are just pocketing it for themselves.  This semester is no different.

After applying for financial aid, the government awarded me $6,2500 for both the Fall 2011 and the Spring 2012 semesters.  Insert sigh of relief because I will finally be able to finish school and not have to take out another loan...  I was so excited.  Not only would I able to finish school and graduate, but I would be able to continue saving money for my house down payment!

Holy crooked criminals Batman, the greedy University monsters are at it again!

Shortly after being awarded my government money, I received a letter from my university stating that I was not eligible for financial aid.  The reason?  I have exceeded the maximum credit allowance for my university, which is 186.  What?!  That seems like an awful lot of credits to have earned without a degree...  I met with my financial advisor, and she assured me that in fact I only had 125 attempted credits, but typically, "students who reach 100 credits are flagged," and thus forced to appeal the revocation of financial aid.

Of course I submitted an appeal, but found out that the process will take about 30 days to complete.  Meanwhile, my tuition is due in 2 days.  If it is not paid in full by Friday at 5:00 pm. I will be purged from my classes, with very little chance of getting back in due to wait listed students.  So what do I do?

I tried signing up for the school's offered payment plan which would allow me to make payments for the next three months, and because I would be paying, I would not be purged from my classes.  I am so upset, why should I have to pay, when I was awarded financial aid?!

At least until my financial aid is appealed and the money goes through, the payments on the plan are something I can afford.  So, with much lament, I decided to sign up.  At the very least, at least I could be reimbursed later when my aid goes through.

Not so fast!

Because I have "Pending Financial Aid" I am not eligible for the payment plan.  I was to told I would have to pay my bill up front.

"If I had the money up front, I wouldn't have applied for financial aid, or tried to sign up for a payment plan," I complained to the undergrad freshman who was manning the Financial Aid office and being very unhelpful about finding a solution to my problem.

So, it looks like I am stuck paying a bill I had not counted on paying.  The only money I have is the money I have saved so far from my Spending Fast, and even still, I am still about 2/3 short.  I have emptied my money market account and am in the process of taking out a signature loan through my credit union to pay the rest.  I am determined to pay the loan back in the same amount of time that the school's payment plan would have allowed, 4 months, so that I can continue saving again as soon as possible.  As sad as I am about my diminishing house fund, I have to pay for school, so all of my Spending Fast savings for the next four months will not be going into my money market account, but now will be going to pay back my tuition.

Let's keep our fingers crossed that my financial aid appeal goes through, and I will be reimbursed so that I am not completely deterred from my saving.

Month 1 Done & Done

Holy cow!  Month 1 of the Spending Fast is done!  I can't believe how fast it went, how not fun it was, or that actually saved money!  Below are this months details.

My total savings this month was $973.00!  Usually I have to take about $200 out of my savings account every month just to break even.  This month, however, I didn't even touch it!  Plus, I had extra that I used to start my retirement account!  While on the Spending Fast, I'm counting my short term savings account (my credit union) and my retirement account as "necessities," so while I'm technically saving money in these accounts, I'm not counting that towards my "Spending Fast savings" which I hope to use as a down payment on a house next year.  So, technically my total reason.for.the.spending.fast.house.down payment.savings for the month is $575.00!

After my first pay period (July 1-15), I opened my high interest money market account and deposited what was left of my paycheck into that account.  I have to admit, while it was thrilling, I was literally sick to my stomach.  How is it that I actually had this much money left over every pay period?  And where did it go?!  One month of frivolous spending is the equivalent of ½ a semester's tuition!  I feel like I need to go lie down when I think about the waste.

Overall, I consider Month 1 to be an epic fail even though I was able to save a lot to stay within my projected budget.  I went over in almost every category of my "necessities," but because I cut costs in other places, and had some extra money come in, I was able to pretty much break even with my projected costs..  Here's the break down of where I went over (the things in red are not counted "necessities"):

• Bus pass: $25: Before I committed to buying a 30 day bus pass, I wanted to make sure it was something I would be willing to do, so I purchased a 5-day pass.  I didn't know that it was good for 5 consecutive days, and not "five uses."  I bought it on Friday, July 1st, expecting to use it again after the 4th of July weekend.  When I went to go to work Wednesday morning, July 6th, the driver informed me that the pass had expired and while she would let me ride to work, she tore up my pass.  What a WASTE OF MONEY!
• Groceries $48:  Because my juicer broke, I figured I could wait until my birthday to get a new one.  However, I am not willing to give up juicing everyday, because to be honest, it's not only good fore me, but I have severe digestive problems that only seem to dissipate when I juice regularly.  I have been buying juices at the store, such as the Naked juices, and other organic, fresh juices, and they're costing a fortune!  I went over my grocery budget nearly $35 on juice!  I think I'm going to have to just bite the bullet and purchase a discount juicer.  Also, on one of my juice runs, I had something to do and asked my brother if he would go get them for me.  When on a Spending Fast rule #1, don't spend money, rule #2 don't give other people your debit card!  He came home with a box of Twinkies, a Kit Kat bar, and a flavored sparkling water for about $13.  I flipped out, and am still hoping he'll pay me back.
• Dining out $8:  I completely eliminated dining out from my necessitates budget.  I have been making myself a big salad for lunch everyday, and I supplement with other fruits, vegetables, or other healthy snacks.  However, I recently started an intense exercise program, and I noticed that I'm usually hungrier than my normal salad.for.lunch. routine can handle.  One day, I joined some co-workers for a more hearty lunch, and it cost me $8!
• iPhone App $2:  Because I am now taking the bus, I downloaded the transit information to my iPhone (still haven't cancelled it yet...).
• Highlights $80:  I went over budget at my hair appointment.  I was really shocked, but to be honest, it was kind of worth it. 
• Concert $25:  Remember that FREE NKOTBSB concert I went to?  It turns out the friend of my brother ended up asking for some money.  He wanted the money for at least one ticket, so I split the cost with my brother.
• Taxes: $28:  Because of my raise, I ended up paying more money in taxes which I hadn't anticipated.
• Roth 401K $100: This was the biggest money shock of the month!  Again, because of my raise, a lot more was contributed than I had estimated/budgeted.  I was literally sick to my stomach at the sight of that ginormous number.  I'm not sure if I will have HR change it to make the contribution less, or just leave it (more money for me later right?)
• Tanning Membership $25:  I cancelled my tanning membership one week BEFORE the Spending Fast began.  However, that particular company requires 30 notice before they'll actually cancel it.  Because my payment due date fell within that 30 days, I still had to pay for the month of July, plus a $5 cancellation fee.
• Exercise Program Extras $20:  If you ever order exercise programs online or via TV, please please please read the fine print!  I ordered an exercise DVD back in January, and because I never check my bank statements, I didn't realize that I was being charged $20 a month for a "club membership" from the company!  Essentially it was payment to be able to chat in an online support forum.  I never used it, and because I didn't read the fine print, I didn't even know about it.  Again this company requires cancellation notice, so I was stuck with a $20 payment in July, and one more in August!  MONEY WASTED!
• Experian.com $15:  Again with this one, READ THE FINE PRINT!  When I payed for a copy of my credit report, I did not read the fine print, and was enrolled in a membership program with Experian.  I called to cancel but they would not refund the $15.

All in all I went over my projected budget by $248.00!  Just think, that could have been extra savings this month!

While I didn't have to buy gas this month and was able to save some money in other categories, I was SAVED by some extra income I had come in.  Apparently, last year, when I paid off my final credit card I paid $100.00 more than I should have (how I did that, I have no clue).  Of course, the Credit Card company never said a word.  When I pulled my credit reports and noticed that the account was still showing a balance, I called them.  They informed me that it wasn't a balance, but a credit, just sitting there.  "Well can you send that to me?" I had to ask.  They did, and then updated my report with all three credit bureaus.

I also noticed four errors on my credit reports that have since been deleted or updated.  If you haven't pulled your credit report in a while, DO IT!  It's worth the 10 minutes it takes to do so.

I also received my Flex Spending reimbursement from my insurance which helped.

Extra Income:  $321.00
Over Spent:  $248.00

Dang!  While my $973.00 is pretty great, I had the potential to have saved $1,542.00 (the $973 I saved + $321 om extra income + the $248 I overspent)!  It's crazy to see how quickly the little things add up, and what a huge effect they can have on the big picture.  I guess I can't get too down, I was still able to save more than I ever thought possible, and now I'm determined to try harder next month. 

Where Did the Savings Go:

$ 575.00 was put into a Money Market Savings Account

$198.00 was put into my Roth 401(k) Retirement Account
$76.00 was put into my Emergency Savings Account
$124.00 went towards a Signature Loan I used for tuition last year

Killing Two Birds

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I got the idea for my "Financial Goals" from the book I'm currently reading: Women & Money Owning the Power to Control Your Destiny.  In it, Suze Orman has what she calls the "Save Yourself Plan."  Geared specifically towards women's finances, each chapter outlines what every woman should do/have financially.  Each set of goals is designed to go in order and can be done in small steps, or conquered all at once.  The book spaces them out by month, so that accomplishing them will only take about 1-3.

Two of my financial goals for the month of July were to check the interest rate my current savings account offers, and look for banks that currently offer higher rates.  I also wanted to check how the interest on that account was compounded.  Next I wanted to set up a money market account where I would put all of my funds saved from the Spending Fast, and eventually turn into my Emergency Savings with eight months of income.

Today, I killed two birds with one stone!

I first checked the Federal Funds Rate.  The Federal Reserve is our government's bank. The big wigs at this bank meet eight times a year and decide if they are going to lower, raise or leave unchanged the key interest rate, the Federal Funds Rate.  All of our country's banking institutions base their interest rates off of the Federal Funds Rate.  Per Suze Orman, any institution offering an interest rate that is less than ¾ of a percent lower than the Federal Fund Rate is not worth banking with.  For example, if the Federal Reserve Rate is 5.0%, don't bank with anyone offering 4.25% or less!  Today, the Federal Funds Rate for general savings and Money Market Accounts is 0.25%.  (Seriously?  That number is tiny!)

Suze is getting my hopes up, because in her books, every interest rate she mentions is upwards of 8.0% (but this book was written back in 2007, before the economic crisis).

I have heard that banks with the highest interest rates are actually online banks, but I still wanted to check as many as I could.  I went to Bank Rate and searched for Money Market Accounts with the highest APY (annual interest rate, not the "Rate Post Intro"), taking into consideration that I also wanted an account with no minimum balance and no fees.  Some banks require that you have a certain amount of money (usually in the $1,000 range) in your account in order to get the interest rate advertised; or in order to avoid banking fees; and some banks charge a yearly fee just for having an account with them.  I say all of that is money WASTED!  You may as well throw your money in a fire if you have an account that charges fees.

DING DING DING!

I found one!  I checked out Sallie Mae's offer.  A few of my student loans are with Sallie Mae, so I am a little familiar with them.  After reading and doing a little more research, I decided to open a money market savings account with them.  I was able to open an account with no fees, no minimum opening deposit, and a 1.15% interest rate that is compounded daily!  (1.15% is almost 5 times the Federal Reserve Rate!)

I am now going to use this as my primary savings account from now on.  I am not closing my current savings account at my credit union however, because I have a student loan who's monthly payments are automatically withdrawn from that account.  Plus, it's always a good idea to bank through a credit union!