This is the final installment in this little mini-series on how I’m approaching my finances in 2013. It’s a big area of my do the work theme and I’m sick and tired of feeling overwhelmed about my finances and out of control.

My money goals for this year are the following (also found on my resolutions page):

• Put myself on a strict budget and evaluate how I’m doing on a monthly basis. I plan on doing this in great detail the first weekend of every month, but also keeping a log in Google Docs with where my money is going and keeping up-to-date on that. Typically, I can go weeks without looking at my bank account, terrified to see what my balance is. That’s not helping me at all. I also have a budget template I use that breaks down where my money needs to go (i.e., bills, savings, extras, etc.) and I want to take one morning every two weeks (preferably the day I get paid) to get all the bills taken care of.
• Save at least $83 per month to have $1,000 saved by the end of the year. I’m terrible at saving so this is an area I want to work on in 2013. Having $1,000 in savings would just make me feel so much better if anything unexpected pops up. I know it’s really not enough, but it’s a start. In doing so, I have a goal of saving $83 per month which is doable for me right now.
• Pay off my last credit card. This one is being taken care of tomorrow! It has been YEARS since I have had no credit card debt on my conscience so it is going to feel amazing to have this goal done with. By paying this off (and not using it unnecessarily), this gets yet another bill off my plate which is necessary for my future budget.
• Set up a payment plan with the collection agency holding my ER bill. One of my major money goals this year is to get my ER bill completely taken care of. I’m not sure if I can get it all paid off this year, but I definitely want to make major strides with this because it’s been weighing on me for a while now.
• Spend less than $100 on Kindle books. My Kindle habit is out of control and between free book deals I’ve snatched up and a Kindle gift card I have in my possession, I don’t see myself spending any money for a few months at least.
• Buy a car. This is my biggest money goal for 2013. I’ve put this off because of money issues, but it’s apparent I really need to possess my own car, if only to give me more of a feeling of independence in my life. I don’t live in an area with a good public transit system and relying on other people is getting old. I am hoping for a decent tax return so I can put a good amount down and not have too high a car payment. I CAN’T WAIT TO DO THIS, YOU HAVE NO IDEA!

There are some money habits I want to begin this year, too. These will help me with my bigger money resolutions, and I think they’ll help give me more control over my spending.

• A cash budget system. I heard about this idea years ago and have always wanted to utilize this in my own life, but I just never had the motivation to do so. Getting money out of my bank is a pain and requires more steps than simply paying by debit card, but I know it’ll help me keep a handle on my money. My plan is to decide on a certain amount to take out of my bank account every other Friday and use that money for any extra expenses: food, entertainment, shopping, etc. I can use it however I like but once that money is gone, I’m done. If I use it all up in a week, well, I’m out of luck until my next payday. 
  
• Gift cards. Amy originally brought this idea to my attention. Basically, the idea behind this is loading up gift cards with certain amounts to give me a limit I can easily see. Once I use up the gift card, then I’m done. I really, really love this idea and I’m thinking of implementing it. I’m still brainstorming ways I can use this effectively in my life but right now, I’m thinking of setting aside a “gift card envelope”. Any extra cash I didn’t use on my cash budget system during the two weeks goes into the envelope. Whenever I have enough cash to buy a gift card, I can get whatever I want! A Kindle gift card, a Starbucks gift card, an Old Navy gift card (my weakness when it comes to clothes shopping is Old Navy). Or perhaps setting aside $1 every time I work out or hit my healthy goals for the day. I’m still figuring out how best to make this work so any advice is helpful!
• Opening up a new savings account. Currently, I have a savings account with my bank, which requires just a $1.00 minimum, but has no real advantages. It’s also very easy to transfer money out when I need it. I’m trying to decide whether to keep my savings in this account or move it to something that reaps better rewards. (And makes it harder to access!)
• Budget, budget, budget. I adapted a fun little spreadsheet from Jenny Blake of Life After College and since I get paid every other Thursday, my goal is to spend Thursday mornings going through my budget, paying bills with an online payroll portal, and putting money in savings. I want to keep a running log of how I’m spending my money because last year I could go weeks without even opening my bank account. I didn’t have a good grasp on my finances at all. This will also help in my monthly tracking.

Finances are an area of my life I know I can gain control over with a few easy steps. It’s not going to take a complete overhaul of my life like losing weight will. All it’s going to take is a tighter budget and less unnecessary spending. It’ll take me a while to get used to not spending as much (I’m already counting down the days until February and I can have Starbucks again!) but it’s completely doable and  I’m interested to see how it will affect my overall life.

Do you have any money goals for this year? 

Last week, I began my little mini-series on one of my “Do the Work” goals for 2013: finances. I feel out-of-control with my spending habits and I knew I wanted to use this year to tackle all those money goals that I’ve put off in years past.

At the end of 2012, I decided I needed to create a strict budget. Come February (hopefully), I will have to figure out a way to include a car payment, car insurance, and weekly gas money in my budget. I also knew I had to create a budget that worked for me and would help me feel in control and on top of my finances, but also allow room for fun and experiences.

The first step in doing this was to sit down with my bank and credit card statements from 2012 and figure out where each and every penny of my money went in 2012. In order for me to create a realistic budget, I had to figure out where my money was going. Aside from bills and paying my mom (for rent/utilities/food), I was able to nail down the major spending categories for me:

• Target. It’s not a surprise that I love Target (who doesn’t?) and I went a little crazy on my spending when my mom and I moved to our new apartment and I had to buy new things for my bathroom and bedroom. Generally, I would hit up Target a few times a month spending anywhere from $30 to $100.
• Amazon – Kindle books. On average, I spent $54 per month on Kindle books. My Kindle habit is a bit out of control and I am actively working on ways to cut down on my spending, such as using the library more and snatching up those free Kindle books when I can. I used to be a library fiend but now that I have a Kindle, I haven’t been in one in probably two years. My library card still works (and I still have my number memorized…) so I just have to be strict with myself! (I do use the library to rent Kindle books, but the selection isn’t fantastic and the waiting lists for popular books are long, long, long!)
• Starbucks. I am not a huge coffee drinker and I never typically crave Starbucks but it is right on my way to work, the line is quick, and it’s just one of those treats I love having. It’s one of those unnecessary expenditures, really, so my plan is to only hit up Starbucks once a month to make it a special treat. My waistline will thank me.
• Salon and spa appointments. This includes monthly pedicures, monthly eyebrow waxes, and bimonthly hair appointments. I have decided to completely cut out pedicures and eyebrow waxes, as both are things I can do at home for cheap. But I just could not give up my hair appointments. I am cutting down on how often I go, but my stylist does amazing things with my hair and I just can’t give this up!
• Weekday lunches. I knew this was one area of my budget I wanted to get in control and I wasn’t shocked to see how much I spent over the year on weekday lunches. I averaged around $70 a month and I’m hoping to cut that average in half this year.
• Clothes and accessories. This is mainly clothes, but also includes money spent at IKEA where I bought a new bed and odds-and-ends for the new apartment in September. I really want to work on this area of my life. For someone who talks about loving minimalism, it isn’t exactly ringing true if I’m spending vast amounts of money on clothes I don’t actually need. I’m also hoping Project 333 will be a great experience in consumerism and understanding how to minimalize my closet.
• Credit card payments. This is absolutely unnecessary. I actually spent twice as much money with my monthly payments to my credit cards than is the balance on both! That is crazy to me. I am very close to the balance on my last credit card (yay!) and my plan is to cut up my Target credit card and only use my bank credit card for emergencies.
• Vacations. Completely necessary expense! 🙂 I went on three vacations last year: two cruises and a long weekend in Atlanta. For this year, I am planning a fun trip to Washington D.C. in the summer (with bloggers! And you should come! Yes! You! Email me?) and a cruise in the fall and that’s about it for my travel plans. I really want to work on saving and paying off my debt right now, so while I absolutely adore traveling, I need to be smart about what I can afford and keep my priorities in line.

I actually have very firm goals for each of these categories, for how much I am allowing myself to spend over the course of the year and I plan on checking in on myself on a monthly basis to rehash how I’m spending and what changes I need to make.

What this helped me to see was what areas I struggle with the most when it comes to spending money. I don’t have an issue with paying my bills, I have an issue with overspending on what’s left over. I think it’s a natural problem to have, especially for someone just grabbing hold of her financial independence but it’s one I want to nip in the bud quickly. I was able to pinpoint my areas of weakness, and also create a budget around this. I can’t exactly say I am never going to buy a Kindle book or shop at Target or spend money on clothes. I know I’m going to do that, but I want to do it in a more responsible way. By figuring out where I tend to spend the most of my fun money, I was able to create a budget around it that would allow me to pay my bills, save, and still have my own money to play with.

Next week, I’ll break down my budget and show you the fun little spreadsheet I use to calculate everything!

What category do you think you spend the most in?

My theme for 2013 is “do the work” as I talked about last week. I came upon this mantra after discovering what I wanted my biggest priorities in the new year to be:

• Health: Losing weight, engaging in healthier eating habits, and leading a more active lifestyle
• Social: Reconnecting with friends, being more open to social situations, and finding a core group of girlfriends
• Finances: Buying a car, spending less and saving more, and paying off my medical bills

For today, I want to talk about finances. I will be talking at length over the next few weeks about my personal finances, my goals for getting on track, and my priorities when it comes to spending and saving.

So, confession time? I don’t have the best relationship with money. I’m not terrible at maintaining my budget. I pay my bills on time and while I do live at home, I help my mom out with rent, utilities, food, etc. There are times when I do the whole “I’ll pay you back when I get paid!” when we’re out and about, but it’s not something I make a habit of. But then there’s money left over. And it’s not going to savings. It’s not going to paying off my school loans. It’s not going to my credit cards. It’s not going to paying off my $2,500 medical bill from 2010. It’s going to fun stuff, like pedicures and clothes and vacations. It’s going to weekday lunches out and frivolous items I don’t really need.

I could point fingers at my parents, blaming them for not teaching me proper money management skills. And I know my past and how much we struggled with money growing up has an effect on how I am today. Today, I am not struggling with money and it’s such a difference from how I spent the first 21-22 years of my life. So I know that plays a part in the decisions I make with my money now. But I also know I am an adult and using my past as an excuse isn’t going to fly with me. The past is behind me. I am in charge of my present and my future.

Last year, I wasn’t smart with my money. I didn’t keep a strict budget and once bills were paid, I was off and running with extra money for whatever I wanted. I tried saving, but then ended up moving the money back to my banking account when I needed it. One of my resolutions was to pay off my last two remaining credit cards and never keep a balance month-to-month but it wasn’t until December that I had even one of them paid off.

This year, I want to feel more in control of my finances. I have to find room in my budget for a car payment, car insurance, and gas. I have to find room in my budget to start forking over a large amount to my medical bills. And I definitely have to find room in my budget for savings.

Blogging about finances can be pretty dull and boring, I know, but I wanted to really hone in on what my spending habits look like so I could create a budget that fits my needs. I didn’t want to create a budget out of thin air, with impossible money targets to hit that weren’t in line with my needs. There’s a science to this, a finesse. I wanted to spend a lot of time discovering my patterns and finding out just where all my money in 2012 went.

The journey was an interesting one, as I poured over my bank and credit card statements and started listing all the different places my money went over the course of the year. Patterns emerged and my eyes were opened at just how much I spent on frivolous items. It was rather astounding to see how much I spent on silly things. I need more control.

It was a process, for sure, and I’m excited to share the journey of how I arrived at a “Perfect For Me” budget that allows me to pay bills, save, and still have money left over for me. I know I’ll learn a lot along the way as I spend less and save more, and I can’t wait to see what else my eyes are open to.

Next week, I’ll be unraveling my spending habits of 2012. It’s not pretty, but it was necessary for me to sit down and map out what areas I spent the most to paint the most accurate picture of my money habits, and how to gain more control.

What kind of relationship do you have with money? Any money goals for 2013?

My mom and I have a serious problem. A serious spending problem. In August alone, we have spent around $710 on groceries.

For two people.

That’s ridiculous.

When I read about others’ grocery budgets and bills, I am in awe of how little you manage to spend. I know eating healthy is more expensive than eating junk, but I also know you can eat healthy on a budget.

Our problem doesn’t simply lie with our weekly trips to Publix, it’s also those little midweek trips we like to take when we only need to buy a few things, but always seems to be at least $30.

I need your help, blog friends. In a big way. How the heck do you guys keep your grocery bills so low?!

Here are some statistics on our grocery problem:

• Toiletries are included in the $710. We’re thinking of doing a separate biweekly toiletries trip at Target. How do you shop for toiletries?
• We usually buy our meat in small quantities, to only use for one meal. This tends to be very wasteful, though, so is bulk the way to go?
• We buy our fruit/veggies at the grocery store. Our Farmer’s Market doesn’t open until October 1st.
• We only buy weekly now, though I would like to switch to biweekly.
• We do use coupons, but only the ones from the Sunday paper generally and they don’t yield us a whole lot in savings.

There is a Sam’s Club 6 miles from where I live and a Costco around 8 miles from me. While I would like to start shopping at a bulk-food store, we just haven’t gotten around to it yet. Is it worth it?

Any help, tips, and/or smacks upside the head for being such a shopping dimwit are greatly appreciated!

As I mentioned last week, I’m drowning in credit card debt. It feels surreal to think that, to know that I jumped off the deep end when it comes to finances and ended up here.

All throughout my life, my parents struggled with money. We shouldn’t have struggled with two working adults, but with my dad’s gambling problem, we did. He would gamble away his paycheck and my mom was left to pay all our bills and extra expenses on her daycare teacher’s salary. It wasn’t easy. We were evicted from many apartments. I learned at an early age the concept of money and the fact that we didn’t have a lot of it. I never told my mom that I wanted to be in Girl Scouts or join a baton-twirling team (every year, we would be given information to join a team. Stop laughing.) because of the money issues. As much as I loved going on field trips, I hated letting my mom know she would have to fork over some money to pay for it.

The truth is, we weren’t destitute. We never went hungry, we always had a place to stay, and we always got new clothes at the beginning of school. I just had an innate understanding that we were always struggling and didn’t have a lot of extra money laying around. I knew I couldn’t ask my mom for a new outfit every week and I was sixteen before I had my first cell phone.

I promised myself that I would never find myself in debt. I would work hard to make sure I never made the same mistakes as my parents. Credit cards would not even be an option for me. I would be financially stable. But I slowly began accumulating my credit cards. In May 2006, after I opened up a checking account with my bank, they gave me the option of starting a credit card. I talked it over with the financial adviser and my mom and decided to do it, only because it would help my credit. Over the next two years, I was extremely responsible with it. I would use it and then pay it off every month. I was never late on a payment.

In the spring of 2008, I was outside of Old Navy one Sunday with my mom, waiting for it to open. My mom had recently gotten an Old Navy credit card for $300 and gosh darnit, it was warming up outside! I wanted some new, summery clothes! (Probably not the best way to go about applying for a credit card…) I thought I would get a credit card around $300-$500. Never would I expect getting approved for a $2,500 credit card.

Right there, I should’ve put on the brakes. Aside from school loans, I had never been responsible for that amount of money in my life. And not only was it a lot of money, but it was also a credit card with a lot of money. Even. Worse. Over that spring and summer, I fluctuated between jobs, and the job I did have didn’t offer me a lot of hours. (Plus, that was the summer that gas was close to $4.00 a gallon and I was traveling up to Tampa for a class twice a week.) So I was using that credit card like it was going out of style and paying the minimum payment every month.

But I was paying it. Every month.

In August 2008, a few weeks before I was supposed to start my final internship, I applied for a Target credit card to buy some more professional clothes for teaching. Like the Old Navy card, this is also a card decision I made spur of the moment and it wasn’t a good idea. Luckily, I was only approved for $300 but I quickly used that up. The interest rate is ridiculous and I’ve been late quite a few times, giving me $30 extra a month I have to pay.

The only card I’ve paid on time consistently is my bank credit card. The other two have been maxed out repeatedly. I’m working towards paying off my Target credit card as it’s the one with the lowest balance and would be the easiest to pay off. My Old Navy credit card is with a collection agency – something that makes my heart break in two every time I think about that.

Over the past 2 years, I’ve done little to get myself out of credit card debt. From August 2008 – February 2009, I was out of work and that’s when my cards got out of hand. I still managed to pay my Target and bank credit cards every month, since the minimum was $10-$20. But for my Old Navy credit card, with a minimum payment of $80, I couldn’t do it. So I would pay when I could, but it was never consistent. And even when I started working again, I didn’t do the responsible thing and put a lot of money towards my credit cards. Part of it was our finances, we were living above our means and I had to help out. Part of it was school, having to pay for my own books and part of my tuition.

So that’s the past. That’s what I’ve done and how I’ve gotten to where I am now. I’m focused on getting in control of my debt and getting rid of these credit cards. (Well, I am looking to keep my bank credit card since I do still want to have a card for my credit.) Kyla has mentioned considering a consolidation loan a few times. The word loan sounds like a dirty word to me, and the word consolidation sounds too financial for me to contemplate. So I just brushed her off the first time, thinking I don’t really have that much in debt. (That’s always a scary way of thinking. Any debt is too much.)

I talked it over with my mom this weekend and it sounds like a pretty good idea. The way she explained it was that if the bank were to give me a CL, they would pay off my credit cards and then I would owe them the money they paid. It would be taken straight out of my account each month. It really sounds like a great idea because there are times it feels so overwhelming to think of how much debt I have to pay and the fact that I have to deal with a collection agency.

I’m thinking seriously about applying for the loan. I think it would help me get this whole debt mess straightened out and give me a solid plan to pay it off.

Have you ever gotten a consolidation loan? Have you ever been in any kind of debt? How have you gotten out of it?