Changes in Attitude

I started working on a break down of my credit card spending today and was able to complete the catagories on one card. Tomorrow, I'll work on the second card and hopefully have the results posted by Friday. Looking at my spending habits is a real wake up call that I have a lot of work to do when it comes to self-control. This got me thinking about my attitude towards money (and debt) in general.

This article, published in May 2011, talks about four unhealthy attitudes towards money. From those four catagories, I would probably place myself in the "Money Status" & "Money Worship" catagories. Looking back, I think a lot of my credit card use came from wanting to impress others, either by picking up a restaurant tab, buying a new purse, or getting someone the perfect gift (even if it was more expensive). After taking the Financial Values Inventory Quiz (page 3), my "values" (Personal Care, Social, Hobbies, Travel, Housing) reflect that attitude as well.

An article in the NY Times online quotes Eric Mills (founder of ohnomymoney.com): "The taboo around talking about money is ill-founded,' he says. 'When you’re the only person dealing with it, you’re subject to all of the dysfunctions we all have. If we could all be a little less uptight and more communicative and social about it, we’d be getting better advice, and it wouldn’t be the sort of thing that we stress about privately."

We didn't talk about money in my family. I don't remember over-hearing conversations between my mom & dad about money and I don't remember any conversations between my parents & I about money. I remember I was allowed to "spend half, save half" of any birthday or Christmas money received, but there was never any ultimate goal of the money saved. In fact, I don't even know where it went. I assume it went into the savings account my father turned over to me when I was 18, but I can't tell you for sure. As a result, I went to off to college with very little in my checking account, a credit card in my own name, and not a whole lot of common sense. You're correct if you assumed that the savings account was drained rather quickly.

Are you sensing a pattern here? I am.

I still struggle to talk to my husband about our finances as a couple. I feel we never have enough in reserve; He thinks I worry too much. He doesn't know how much revolving debt I'm currently carrying because I'm so ashamed to admit it. It's hard to disappoint the people you love. Don't worry, I'll tell him eventually. Baby steps. Last night I told him I was blogging about not shopping and saving money. He was happy I don't mention him by name.

How did you learn about money? Did your view of money as a child affect your relationship with money as an adult? Do you find it difficult to talk about money with your significant other? (I can't be the only one!)

Day Eight Spent: $0.00
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Day Eight Saved: $0.00

oh oprah, you are so wise.

A Mortgage Fancier

Friday was our one year anniversary of becoming homeowners.

closing day 2011

Yesterday, we received a statement from Wells Fargo regarding our mortgage and escrow account. We utilize the escrow account to pay our homeowners insurance, city taxes, and the mortgage insurance. Each year, the company reviews our account and adjusts our mortgage payment accordingly. The minimum balance our escrow account can be is $701. At one point this year, we dipped to about $605 which left us with a shortage of about $95.

Wells Fargo provided us with two payment options:

Option 1: Pay the $95 up front and increase our monthly payment about $5 to make sure we don't have a shortage in the coming year -or-
Option 2: Spread the $95 dollars out over the course of the next year in addition to the $5 increase in the mortgage payment.

I chose Option 1 since the shortage wasn't an exorbitant amount of money. Our new mortgage payment starts in April; Previously, we were paying $12 extra each month on the principle to make our mortgage payment an even number (easier for transferring funds between bank accounts). After reviewing the statements and talking with the hubs, we agreed to put an extra $200 towards the principle. According to my calculations (but remember, I'm not the math teacher in the marriage), this puts us on track to have our mortgage insurance removed in about 7 years.

We're also weighing a payment plan offered by Wells Fargo that would allow us to make bi-weekly payments on the mortgage. Allegedly, this is supposed to help us pay off the principle faster. Hubs is sold on the idea, but I'm wary of another mid-month payment, since that tends to be when the majority of our bills are due. Right now, I want to keep my focus on utilizing any extra money for savings and paying down my credit cards.

Feel free to share any helpful tidbts or stories you might have about homeownership in the comments!

Day Seven Spent:
Wells Fargo: $93.18
Wawa: $2.67
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Day Seven Saved: $0.00

Count Wagula

Everyone has a few categories in their life where they spend a lot of money. For some, it's shoes, for others, sports gear, and for most, it's their child(ren). Meet my child:

molly on howl-o-ween

Some days she's 35 pounds of terror. Most days she's 35 pounds of joy. But sometimes, I look into her cute little face and see this:

no, she's not giving me that money

I spent $382.18 on Molly in January 2012. A good chunk of that ($250 to be exact) was for obedience classes. Molly graduated from a basic class at Lucky's Bed & Biscuit in 2011, but was still lacking in the obedience department (ie: she never listened to us). On the recommendation of a co-worker, we enrolled in a six week program at Hanlon's K9. It has been wonderful. Molly isn't quite where we want her to be, but she is definitely a much better dog than she was six weeks ago.

Now it's time for us to move onto the Novice class which means forking over more money. This time it's a bit more expensive ($275) but we also get more classes (10 as opposed to 6). Here is a great example about how subjective wants and needs can be. Obedience training is a little bit of a want and a need. I feel like it's money well spent because we have a better behaved dog; However, I understand that we could probably do without the classes and continue working at home for another month or two. Another factor to consider is the added travel time - the class is near my work, so that is an added day's worth of gas and tolls. I'm sure you've all seen the price of gas recently.

We decided to wait a few weeks before enrolling her in the Novice class. I will be helping a friend out at his restaurant on St. Patrick's Day so we'll use some of that money towards her "education". We have free passes towards the school's daycare facility so we'll rely on that to keep the exercises fresh in her mind.

Without receipts, I'm not really sure what the other $132.18 was spent on. I know I bought food once ($35.00) and rawhides on two occasions (@$9.99 each), but other than that, I don't know. I'll have to add "keep receipts" to my rules.

But as my friend Patty once said "it's still cheaper than a child."

How much do you spend on your pet(s)?

Day Six Spent: $0.00
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Day Six Saved: $0.00

Frugal Foodie

Confession: I went shopping today. It was food shopping, though, so it's okay! In accordance with the rules, I made lists and used coupons . I was still over budget, but more on that in a minute.

I used the "Buy Me a Pie" app for the iPhone to make a list for BJ's. I purchased 17 items, 11 items of which I had coupons for. And I had two coupons for Listerine.. holla! The items I didn't have coupons for I made sure the price matched the quantity (for example, 3 tubs of lunch meat for $8). With coupons I saved an extra $26.

Last night, I used the Target app to make a list of the things we needed; However, when I got to the store this morning, I realized the list I made was only valid until the 25th. Now, none of the items I had saved were on sale anymore. Not to worry though. Most people don't know that Target is one of the best kept secrets in the grocery market. Everyday, they mark down packages of meat $2 or $3 because it is at it's "Use or Freeze" date. Today, I was able to score two packages of hamburger patties (4 patties in each) for ..... are you ready for this?? ..... 0.29 cents!!!

The burgers were originally $5.49 and marked down to $3.29, plus, each package had a $3 coupon on the front. I also scored ground pork on sale for 0.99 cents ($2.00 coupon off $2.99) and two packages of chicken breasts (with 3 breasts in the package) for $1.14. I spent a little bit more for a package of Archer Farms steaks wrapped in bacon (originally $9.39, on sale for $6.39). We rarely eat steaks or bacon by themselves so it actually makes more sense for us to buy the steaks this way.
The last stop I made was unplanned. Our local Pathmark is going out of business and I wanted to see if there was anything left in stock we used. I was able to pick up some of my favorite cleaning supplies (7th Generation & Clorox Greenworks) for about 60% off. I also picked up some baking supplies, a few of our favorite Lowry's marinades, and three boxes of tea.

I did spend a bit more money than I planned (about $40 over budget), but it helped me learn something very important about myself: the bright tags of a clearance sale are my siren song. I lose control very easily when I see a 60% off sign. Even in Target, those little red-orange clearance stickers got my heart racing and made me a little breathless. Next time, I know to stick to my lists and coupons and then get in my car and drive home.

Day Five Spent: $247.09 [budget: $200]
BJ's: $140.39
Target: $46.98
Pathmark: $59.72

Day Five Saved: $0.00

It's Electric!

As part of my goal to save more money, I will be reviewing different financial categories to see if there is anything I could be doing differently. In addition to my personal spending, I also want to look at our household spending. Obviously, there's nothing we can do about our mortgage payment, short of refinancing, but since we just bought the house last year, that's not really an option now. Plus, our interest rate isn't too bad (4.25%).

One area where we can and have spent a lot of money is our electric bill. The house is wired for all electric use and according to our last bill, the majority is for heating. Hot water is second. We already do a lot to try and keep costs down. Our friends can confirm we keep the house on the chilly side and many of the rooms don't even have the heat on. We replaced the hot water heater almost immediately after moving in so that has helped some. I rarely wash our clothes in warm or hot water (unless it's something that needs it, like towels or sheets) and often skip the heat cycle on the dishwasher. The hubs can tell you I am a fanatic about unplugging things that aren't in use.

Even with all these little steps, our last bill came in at $289 for 1,662 kwh of electric. Ouch! So I decided to take a chance and signed up with Constellation Energy. They offered us a 12 month fixed rate of 9.55 cents versus our current rate of 10.67 cents with Atlantic City Electric. If it doesn't work out, at least I have 90 days to cancel without penalty. Hopefully we'll be able to beef up our joint savings with the reduced rate!

In other news, I did some unnecessary spending today. It was Molly's last basic obedience class and afterwards we went to Petsmart for a new toy & bones. I also had to buy her ear cleaning solution. So two wants and a need in that purchase.

Day Four Spent:
$22.35 Petsmart
$30.01 Wawa (gas)

Day Four Saved: $0.00

The Big Reveal

I'm nervous. Today is the day where I have to admit to all of you (and myself) just how bad it's gotten. My fingers are shaking as I type. But, before we get to that, I have some good news! I have $20 for my starving savings account.

The hubs and I had a planned dinner with one of his former neighbor's from home last night. She was in Atlantic City for a conference and we couldn't pass up the opportunity to see her (& play some Slingo). We picked a moderately priced tapas style restaurant and I set a budget of $60 for dinner, drinks, slots, and parking. Miss T, being a wonderful & generous person, grabbed & paid the bill before the hubs & I even had a chance to open our wallets. I agreed to leave the tip and my hubs paid for the t-shirts we had ordered from her brother (he brews his own beer - gotta support your friends!). Pre-Lent, I would've put both $20 bills in the slot machine, but this time I chose to just give $20 away to the Slingo slot gods (I didn't win). Then, as if to reward me for my restraint, the frugality god(s) left a Diamond card on a nearby slot machine. I know, I should have turned it in. But I didn't. Now I have free parking at four casinos until March of 2013. And $20 to put in my savings account. I'll take it.

Now onto the not so awesome part of the post. Before I get into the details about my personal finances I ask, nay demand, you refrain from posting negative comments about "how irresponsible I am" or "how could you let it get that high", etc etc. I know this is my fault. I know it was/is irresponsible of me. I do not and will not attempt to place the blame on anyone else. This blog is about being honest with myself and whoever chooses to read it. I won't sugarcoat it, but I also won't be shamed. At this juncture, I need support, not insults. Thank you in advance for that.

My heart is pounding.

I have $9,076.88 in credit card debt.

Wow.

I have four cards. #4 was opened last year when the company was offering 0% on balance transfers. Technically, I have five cards, but one (a store card) has no balance (we just paid it off two months ago). Here's the breakdown:

Card 1: $2,719.51
Card 2: $1,942.97
Card 3: $534.79
Card 4: $3,879.61

I'll save the breakdown of what I spent money on for a later post (I think that's going to take some investigative work). I might need the weekend to process the above number- at least we're not doing anything that involves spending money.

Day Three Total Spent:
$25.00 EZ Pass
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Day Three Total Saved: $5.00
(Rebate from bakeware purchased three months ago)

Rule #12: When It Stops Being Fun, Break Something

Yesterday, I outlined the basic plan for the next forty days - stop unnecessary spending. It would be great if that was all the direction I needed. But without specific boundaries and limits, pursuing such a broad goal would be a futile as deciphering furniture assembly instructions from Ikea (seriously, who makes those?).

The Rules

1. Identify if items are needs or wants. Needs are defined as items essential to personal and/or household function. Examples include food, stamps, gasoline, cleaning supplies. Needs may be subjective in nature. For instance, I consider Molly's rawhides a need because sometimes she needs a distraction while I pay bills/work out/take a nap. Rawhides are essential to our household's sanity. Wants are defined as items I can live without (no matter how good the sale is).
2. No credit card use. One credit card may be given to the hubs for emergencies but he must hide it and not tell me where it is.
3. Pre-planned functions such as dinners and happy hours are acceptable as long as a budget is set and paid for in cash only.
4. Food shopping is permitted; However, a list must be made in advance and only items off the list may be purchased (again, no matter how good a sale is). Coupons & sales must be used whenever possible.
5. Non-essential items for the home (paint, frames, furniture, etc) must be approved by the hubs before purchase.
6. Pre-existing gift card purchases are okay as long as I remain within the limits of the card. No buying a $20 item with a $10 gift card.

For every week I can go without spending needlessly, I may purchase one small item (under $10) for myself. I'm hoping these little rewards will keep me on track. I know full on deprivation will only lead to a spending binge that I will feel bad about and knock me off the wagon completely.

I did not set a specific savings goal because ultimately I want the next five weeks to be about reflection and change of my current habits. Any money saved is good, in my opinion! During the forty days, I will be reviewing my financial situation in depth and seeing where I should be spending less and saving more. I'll be using a variety of different resources, but notably Dave Ramsey's Seven Baby Steps and Total Money Makeover (mostly because I already own the TMM workbook).

Tomorrow, we'll dive into the nitty gritty of how much I owe, to whom, and how the hell I got myself here.

Day Two Spent:
Drs. Foster & Smith: $25.98
(Aforementioned rawhides - 5 lb. bag @ $19.99 + $5.99 shipping)
Tip & Slots @ Bally's Casino: $40.00
(Budget: $60.00)
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Day Two Saved: $20.00!

We are Living in a Material World

And I am a Material Girl. That's what got me into this mess in the first place.

I recently discovered the Lenten practice of giving up something you enjoy is optional not mandatory. Call me a bad Catholic (it's okay) but for all my years of Catholic school, I never remember being told I didn't have to. So I always have. Even into adulthood, where my practice of the faith has lapsed, my Lenten ritual remained. This year, the challenge is bigger than ever.

The wake up call came yesterday, when I pulled my yearly free credit report, and found my score had gone down. Significantly.

I tried to tell myself it was because we just bought the house last year. While I'm sure that had a hand in it, that nagging voice in my head and the bad feeling in the pit of my stomach told me what it really was - credit card debt.

So for my Lenten resolution I've vowed to give up spending and start religiously (pun intended) saving. I'll be spilling the good (if there is any), the bad (there's tons), and the ugly for the next forty days as I try to evolve from a spendthrift to a savvy saver.

Day One Spent:
Library fine: $1.20
Shop Rite: $69.98
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Day One Saved:
$0.00