Thursday, January 29, 2009

Being Cents-able

I purchased a used copy of Your Money or Your Life by Dominguez and Robin and it became one of the many books waiting to be read in my room. Frugality has been a large part of my adulthood out of necessity. This book came up in Internet reading I did on that subject and since I was having a very bad year at work and longed to quit, the notion of being able to live on less was enticing. Summer, home repairs, and a sick mother sidetracked me.

At the end of the summer, as we watched financial institution fail and the stock market fall like a lead brick, we learned that there was a possibility of my husband’s job ending and our income being drastically cut. My quitting was no longer an option, but the urgency to stretch our money was renewed. After some digging through the stacks of books in my bedroom I found Your Money or Your Life and with highlighter in hand I began to read.

The book is not about creating a budget. It is about developing a new appreciation for your time, life energy, and knowledge about where that and your money goes. I am still in the baby steps of financial independence and living the sort of life my heart yearns for, but on the 8th of January I paid off Christmas and today I put $100into savings.

I must note that I am the one reading the book and attempting to change my life. My husband is frugal by nature, makes a great deal more money than I and we have different spheres of financial responsibility. I say this to point out that my finances amount to my salary and the drizzles and drabs of money I get each month. My resources are responsible for food for six, sundries for three, and clothing for two along with gifts and a YMCA membership. That said, if you are interested in my financial journey, read on.

Dominguez and Robin talk about people’s impulse to buy “gazing pins” which is anything an individual has trouble saying no to. Generally these are things that a person collects, sometimes just for the sake of collecting. Their collection has long since surpassed anything enjoyable. I have a cousin who has a collection of china dog figurines that has become an obsession for her. I’ll bet she has 3,000 of them if she has one and if there’s one at the thrift store you can bet she will buy it. My weakness is books. I am getting better at saying no to books, but I am not always successful.

I started the physical act of accounting for each and every penny—and I do mean every penny which includes the ones that I still stop to pick off the ground—in the middle of December. I might have waited until New Year’s, but it actually seemed like a good idea in the middle of Christmas madness to begin to take a hard look at where my money goes so I dug out an old ledger that I’d purchased at Goodwill. This baby is really old, but old things appeal to me and I knew enough of my personality and habits to know that it was going to have to be pleasing to me to do what the book was asking—keep track of every penny.

As is so often true, I missed my dad at this point because I remember him using just such a ledger to keep track of our family finances and his and my mother’s checking account. Each month the bank sent him their canceled checks and he would let me put them in numerical order and then he wrote them down in the ledger in columns according to what they were for. I remember it looking complicated and that may be why I’ve steered clear of such accounting, but Dominguez and Robin do not suggest that you use some complicated method or program. Just do what makes sense to you and pretty soon you’ll be making cents. Okay, no dad to call on, but I made something up for myself.

I started out small. For the last half of December and all of January I kept track of spending in two categories, food and nonfood, and of course a running balance showing deposits and expenditures. I color coded things. Nonfood, deposits, and balances are purple. Food totals are green. Expenditures are red. In conjunction with this I am being religious about saving receipts. Because I receive self-addressed envelopes from institutions I do business with, but respond on line, I have a cache of envelopes I am too frugal to toss out. As New Year’s approached I took twelve of these and marked them for the months of the year. Another Goodwill find, a large file box with dividers, became designated as the home of the envelopes as they fill up.

On New Year’s Eve I wrote the totals for my food and nonfood expenditures for ½ of December on the envelope, licked it shut, put it in the box and turned to a fresh page in my ledger. Across the top I wrote “January 2009’ and kept exactly the same sort of records. These are little mundane pleasures like the pens, but whatever floats my boat, right?

Because of my having shopped for Christmas for twelve months instead of one and because I was watching every penny during the latter half of December I was able to zero out the balance on my credit card on January 8th. I felt like confetti should have fallen from the ceiling, but I did my own little dance of joy.

Making the month and my money come out even has been problematic for me, largely I suspect because I haven’t paid attention to my spending as much as I thought I was. Immediately accounting for every penny I spend has had the effect of making me think not twice, but three times, before I do it. Taking the time to sit down and figure out what was food and nonfood and keep my running totals and balance of everything from what is in the bank to what is in my wallet has had a calming effect on me. And I know that at any given moment, assuming my math is correct, I know exactly how much money I have, not just in the bank, but altogether.

Since I get paid on the last working day of the month as far as I am concerned my financial month ended with one last trip to the store after work today. When I ran my numbers I came out with $109.56 at the bottom of the page. Eureka! I came out ahead and before I can go spend it on any gazing pins I went to the computer and transferred $100 from my checking account to savings.

For February I have added categories to the ledger. I am keeping track of charity, health expenditures, money I spend on my mother, lessons (grandson’s violin lesson, my daughter’s tutor, the YMCA), as well as food and deposits and, of course, books. Stay tuned for the continuing story of my financial renaissance.


Lorraine Hart said...

Well done Stephanie!

We've been doing the same thing for quite a while.

There was something quite obscene about today's Yahoo headlines...the first saying we're at the lowest economic point in 27 years...then the next talks about Exxon's record-breaking profits...again.

Here we are, keeping track of the pennies and trying to keep the country going, while they take it's just not right.

Stephanie Frieze said...

Our best defense against the Evil Oil companies is to not buy from them. The faster they become dinosaurs, from whence they came, the better. I did not know that Exxon is reporting profits!

Kim Thompson said...

Profits? Exxon? J.C.! Ick, ick!