Big Budget Crisis Update

A couple weeks ago I blogged about "The Great Budget Crisis of 2013". I talked about the fact that about $2000 of our income was somehow going completely out the door without us even realizing it. It's been an interesting couple weeks since that post, and I wanted to at least record some of our progress toward paying off our debt.

1) We made a budget. This was actually really satisfying to do. We had previously entered all our info into mint.com, so it was pretty easy to look at where our money was going last month. The budget is constantly getting updated and changed. I've also started a log of "infrequent expenses" - you know, the insurance payments, the car registration fees, vet visits for the cats, and when things are due so I have a better idea of when we need to set aside extra money for the month.

2) We talked about credit card debt. It seems every month, we would put some purchases on credit cards. We always paid our balances off at the end of every month, but, for some reason, using the cards made it harder for me to figure out where our money was going and to keep track of it. Alex was convinced that we were making money off the cards (we have some points/cashback policies on the cards). Turns out we've made $6, and a couple hundred points on our cards since the beginning of the year. Not much, right? So, we decided that we are done with credit cards, at least for now. Absolutely nothing goes on the credit card, and we pay cash (or debit) for everything. Seems pretty easy, right? So far, it has been!

3) We started asking how much things cost. I called my insurance to ask about the cost of labor/delivery/birth. I called a couple vet offices to ask about cost of services and vaccines. I visited my dentist and made sure my visit was "in network" (and I checked how much my filling would cost after the baby's born - all very low cost - yay for good insurance!). I checked to see how much all my OB visits would cost. I asked our landlord if they would raise our rent when our lease is up in the fall (right when the baby is due!). This has been great for a number of reasons. For one, I have never asked how much things cost. I always just thought, "Well, whatever it costs, I will have to pay it, so it doesn't matter." However, this made me feel really passive and not in control of my financial situation. And asking about services up front, or shopping around, is ALWAYS a good idea. Adopting this policy as my own has been a way to make me feel in control of our finances, which is a much more positive feeling.

4) I started using the calculator on my phone. Whenever I go shopping, I just start to add things up, just so I have an idea of how much things will cost. This helps me, again, feel in control of my finances, but also helps me to not overspend. This "being on a budget" thing means I have less money in my checking account, and I never want to overdraw it (since that results in some fees).

5) I finally got renter's insurance and life insurance. Looking at our finances made me realize that if  something were to happen to our home (we do live in earthquake country), it would be hard to start over again and replace some of our important things (like our bikes, computers and furniture) without significant debt. And, since I am pregnant, it would be devastating (in more than one way) if Alex was left to care for a baby alone (also shouldering all my student loan debt). So, I called around and got myself a 30 year life insurance policy and I got us covered under a renters insurance policy. Although, I am hopeful we will NEVER have to use these policies, I feel a little bit more peace of mind knowing that some stuff is covered. I am actually glad I called them when I did because if I would have been in my third trimester, I would not have been insurable! Alex is working on getting his own life insurance policy. That's on the "To-do" list for this month.

6) We paid off all our credit card debt. We are now at $0 balance on all our cards, and I am just so excited to look at those numbers on a daily basis!

7) We doubled our car payment. If you will recall, our loan was taking about $25 "finance charge" out of each payment on our car loan. Although they are still taking that $25, we have now doubled our car payment, meaning we have one less car payment to make in the end. And, our loan amount is now under $10,000! We are planning on continuing this (and possibly adjusting the amount we put toward the car loan) as time goes on.

8) I got a library card. One of my weaknesses is books, I will buy them anytime, anywhere. I love, love, love to read. However, my habit is just not sustainable. We have a perfectly lovely library right down the street with all these new-fangled things like audiobooks, DVDs and CDs (the Oxnard Library offered none of these when I was a member as a kid. Welcome to the 21st century, Christine!). I used to LOVE the library visits with my Grandma Seaton when I was little. I would get a stack of 8-10 books each week and plow through them. I have very fond memories of the library as a kid, and I would love to "rekindle" that. So, we went this morning and we both got library cards and checked out 4 books. I am so excited I can't even tell you!

9) I started thinking about what we want to eat for the week. I try to make a grocery list of all the things we need. Our pantry has become a bit lighter (which is probably a good thing) and we've tried some new things (also a good thing). I think I am just going to need more inspiration in coming months to come up with recipes and menus we can use.

10) I've started to be crafty. I got a Pinterest account and I've started to look up things that I think will be helpful for the future. For example, I found some great cat toys made out of empty kleenex boxes and toilet paper rolls. I'm starting to think more about making things that will be functional for our lives rather than purchase things (for example, I'd like to make a quilt hanger for a beautiful wedding quilt we got - turns out we can make one for about $20). Thank god my husband is good with his hands and is not afraid to try to make or repair things. I'm such a lucky girl!

11) We haven't bought lunch at work in three weeks and we only went out to dinner once. We have gotten the occasional take-out (pizza, burgers), but that has been pretty infrequent. While this might sound kinda depressing, it's actually been really good. We end up cooking together most nights, giving us both time to catch up with each other's lives. And eating out really adds up! Plus, I just don't like food prepared at restaurants. I always think I can do a better job (unless it's maybe In-N-Out or something like that!). Plus, it's better for us (and for the baby), and we were doing it for so long back in Philly, that it's almost second nature.

12) I'm taking advantage of all the things I get for free. I go to the Stanford pool to swim (the admission fees are part of my hiring package) and I've been attending free prenatal yoga classes. I've vowed not to miss a one (barring unforeseen circumstances) so I can be sure I get my full benefit.

13) I've rounded up all our gift cards and resolved to use them up! We still have a couple giftcards from our wedding kicking around, and we've got a couple other gift cards that might otherwise fall by the wayside. Using them up is going to be a priority for us before the baby comes!

14) I've started looking for used baby things on the web. My mother in law hit up her local church sale and scored a bunch of baby clothes and things. I bought a glider rocker from a fellow Stanford employee and I couldn't be more pleased with it. The only thing we are planning on buying new is the car seat (as those can expire/be in accidents, etc, so it's hard to know how it was treated). Other than that, all those newborn things that little Golack will likely outgrow very quickly? We'll get them used. Another good thing about used items? We have to pay cash!

15) We've started to really talk about the things we want to do as parents. I think we are leaning toward cloth diapering, so we've started to talk about diaper service, logistics, etc. I've even enrolled my Mom in for a bit of sewing advice (again, thank god she's game for my crazy schemes!) And we're both pretty active, so we've decided we need to get a jogger type stroller with a big wheel base to make sure we can hit up some of the more gentle trails in the area. I've checked out some books on the things a baby needs and how to be both economical about them and also ecologically friendly. Both Alex and I are concerned about things like toys from China or toys made out of excessive plastic. I realize there is no way to control kids' toys as they get older, but we are hoping to minimize things like lead and other heavy metals in little Golack's life, at least in the beginning. I realize some of these things might not be totally feasible when faced with actual child care, but I think it's great to talk about nonetheless, if to at least ensure we are both on the same page.

16) We visited the daycares around our work and we started to talk about our options. We are getting on the waitlist for three daycares on Stanford campus and we are hopeful one of them will work out for us. Even though daycare on Stanford is (by far) more expensive, we've both decided it's the best option for us since most of our time is spent at work. If little Golack needs us, we are right close by, and we can take him to lab for a couple hours if need be. We've also decided that half-day daycare will work best for us.

Well, I really think we've made pretty good progress on our budget in the last couple weeks! I am feeling encouraged and pretty happy about our progress and I'm looking forward to this month, where I am working on purging a lot of stuff, selling some extra things we don't need, and just in general getting more organized.