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!