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My Financial Ratios

February 6th, 2007 at 06:59 am

I read on www.moneysmartlife.com about the 5 financial ratios you should know to keep you on track.

Out of curiosity I did 3 of the calculations to see where I stand. The calculates below do not use my DH's data since we have seperate accounts/bill responsibilities.

1. Liquidity Ratio=Liquid Assets/Monthly Income. Target: 3-6 months.
Mine calculated to 1.23. Yikes - i guess I am the defination of living paycheck to paycheck Smile Of couse I would like to think that if something did happen to my job, some of my monthly expenses (like daycare) would be less or nothing.

2. Savings Ratio=Savings per year/Annual Gross Income. Target 8/25% depending on age.
My savings ratio calculated to 5.26%. I am hoping to somehow save an additional 1,420 this year to raise my percentage to the minimum 8%. Once I get my car paid off I should be able to put a little more in savings. Also once the girls get out of daycare in a few years I should be able to save a much higher percentage.

3. Debt to income ratio=Annual Debt payment/Annual gross income. Target is less than 30%.
Mine is only 12% (I don't pay the mortgage). However if you calculate in my daycare bill (which feels like debt) it is over 37%.

Here is the article if you want to read it:
http://www.moneysmartlife.com/2007/01/31/stop-comparing-your-finances-with-others-five-financial-ratios-to-keep-you-on-track

10 ways I save money on food

February 5th, 2007 at 10:09 am

None of these items are new ideas or rocket-science, but maybe they will help someone, or stir up other ideas.

10 ways I save money on food (in no particular order)

1. Meal planning – I plan my meals a month at a time. This is a bit time consuming when I do this at the end of the month, but I think in the end it does save me time. I have been doing this for 4 months now and it seems to be getting faster since I use a few of the same meals each month. Of course the monthly meals are flexible depending on what comes up during the month and what may be on sale that week. This saves me money by not going to the store every few days – instead I go once a week. I would like to stretch that to one big trip every two weeks, but I haven’t got myself that organized yet.
2. Watch weekly store ads. I watch the weekly ads for sale items and stock up on stuff I use often.
3. I normally buy the store brand (with a few exceptions)– not name brands so coupons don’t do me much good. I will use an occasional coupon if I come across something I normally buy, but I don’t go out of my way to get a Sunday paper to stock up on coupons I won’t use anyway.
4. I don’t buy boneless, skinless chicken breasts. If I need a chicken breast I will buy the pieces with the bone and skin. I don’t really enjoy taking the bone and skin off (yuck!), but there is a huge price difference between the two types – especially if it is on sale. I also try to use dark meat pieces in some recipes – even cheaper.
5. I get my beef for free. My family (who are farmers) gives us a side of beef every Christmas. This is great for the budget, but not so good for the waistline since we end up eating red meat for dinner 3-5 times a week.
6. Eat leftovers! I try not to throw out any food - It feels like I am just throwing money away if I have to do this. I can normally finish up leftovers by bringing my lunch to work.
7. Soup. Once a week I make a big pot of soup. Soup is very economical to begin with and usually pretty healthy. On Saturday I made a vegetable beef soup using free beef (steaks that had been sitting in our freezer for a year), leftover veggies, leftover V8 tomato juice, and a few other items I had on-hand. It was wonderful! I freeze individual portions for my DH’s lunches – a lot cheaper than buying a packaged soup, meal or eating out.
8. Freeze meals – I don’t do the extreme once-a-month or once-a-week cooking. I tried it and it just didn’t work with two little ones running around the kitchen all day. However, I will try to make a little extra of my casserole or whatever I am making to put a meal in the freezer. Last night we had meatloaf. The recipe stated it would make 8 servings – we have 2 adults and 2 kids that don’t each much. Instead of making one loaf I split it into two and froze the second one. I now have 1 meal for March ready to go without much more additional expense – all I need is a side dish. I also freeze individual cookie-dough balls for quick fresh baked cookies – much cheaper than the pre-packaged stuff. (This also doesn’t help my waistline since I end up eating the cookie balls straight from the freezer)
9. Drinks – I try not to spend a lot of money on drinks. We don’t buy popsoda unless it is super-cheap. I also buy the girls frozen concentrated juice instead of the ready-made juice.
10. Make more things from scratch. This is a new one for me this year – I have been making brownies or cakes from scratch instead of a mix. I have also made a few quick breads, biscuits and muffins. I need to research how to make things a little healthier – maybe using whole wheat flour.

That’s my list – hopefully it will help someone. Any other tips?

Month End - Budget Figures

January 31st, 2007 at 02:09 pm

Month end is finaly here! I have actually been looking forward to looking at my budget figures since I have been following the budget all month long (yes I am nerdy).

I have been trying to use the pearbudget to track my budget. It has been a little of an adjustment since before I was trying to budget by payperiod (every two weeks) instead of for the entire month. I have had to add a few additional spreadsheets to the workbook to track other items like the breakdown of my savings account, but otherwise I think it is working pretty good.

January Stats:
My income exceeded my expenses by 38.10, which I was pretty pleased about since I did got over in a few of my categories.

I went over in my 'Household' category by $60, but I still have over $50 cash in my bilfold, so I am not going to stress about that one too much.

My low point in my checking account was just over $500. Hopefully that will get larger as I go.

I paid an extra $260 to my car loan (Yea!).

No money went to savings this month, but I didn't expect it to since I am focusing on my car loan right now.


Credit Report and Score

January 24th, 2007 at 12:24 pm

Last night I went to www.annualcreditreport.com to get my free credit report - I believe it has been 2 years since I have actually looked at one. I selected Equifax for the report (no specific reason - just random).

The site said I could get my score for just under $8 - I didn't really plan on getting my score, but I figured $8 was worth a piece of mind.

I haven't fully dug into the report yet - just skimmed a few items, but here were some things I noticed and some thoughts.

1. My credit score is 789 - Excellent rating. At first I was pissed for wasting the $8 when my score is good, but now I am glad I did it. Since I am a numbers person, my score makes me think - Why not 800? Should I try to improve it? Does it really matter if it is already "excellent"?

2. The name displayed on my report is my last name on my first marriage. I thought that was very strange - That marriage only lasted 1 year and I changed my name back to my maiden name once the divorce was over. I haven't used that name on anything since 1998.

3. I have 16 revolving accounts listed on the report. YIKES! most of them were opened for a 1 time charge for a discount or some other promotion. I will definately think twice about doing this in the future.

4. Negative factors affecting my score.
a. The time since your most recent account opening is very recent. This is probalby true - no arguements.
b. You have no recent revolving balance information being reported. If I am reading this correctly - since I do not have any credit card balances - it negatively affects my score? hmmm... I don't think I am going to work on this one.
c. You have a relatively high number of consumer finance company accounts being reported. I agree - I probably need to close a lot of these accounts, but will closing them also negatively affect my score? I thought I read somewhere that it would.
d. The length of time your accounts have been establised is relatively short. I have two credit cards and one business card account - all of them I have opened in the last year or two. These will be the ones I keep "open".

This next year since I am buckling down to pay off my car loan I do not want to use credit cards at all - only pay for items I have the money for. Is that wise? Should I use them occasionally?

I plan on digging into the report more the next few days - just by glancing at the report it seems a little confusing.

My other gripe about the credit report thing is why can I only have one free copy a year? This is information about ME. I should be able to access it (with out paying) whenever I want. And why is the score such a secret? This is something that affects what kind of interest rates I qualify for - why should I have to pay to receive my own score?


The cost of being disorganized

January 22nd, 2007 at 10:06 am

I have spent the last few months trying to de-clutter my house. I have never considered myself a pack rat, but I think the problem is laziness - I am too lazy to get rid of things we don't need. I started out with the easy things - my cookbooksrecipes, my cothes closet, bathroom closets... Well now I HAVE to tackle our home office since it is nearing tax time. We have a small home buiness that we started in 2006 and I am bound and determined to figure out how to do the taxes by myself - I have an accounting degree (that I don't currently use...) for god's sake - I should be able to figure it out. My record keeping has been minimal at best for our business in 2006 - so I think I am going to start the year from scratch. It really shouldn't be a huge deal since the business probably only averaged about 10 transactions a month.

I have PILES of paper in my office so I thought the first step would be to sort those. I created 4 piles - File, Read, Act, Toss. Going through the papers I realized I had crap back from 2003 - I can't believe that was the last time I filed! I guess it makes since - that is when our 1st DD was born - I just haven't had the desire to do anything since.

Anyway - here is the costs of me being disorganized (besides spending an entire Sunday going through papers).

1. I found a $30 amazon gift certificate taht expired December 2006. I was hoping the expiration date wouldn't really matter, so I tried using it last night and was denied.

2. I have lost a few utility bills for 2006. I THINK I can deduct part of our utilities since we have a home business. We should be able to at least deduct internet since we didn't have that expense before the business.

3. My DH wanted to pull the girls in a sled around the house yesterday. We both swear we purchased a sled last year, but we could not find it anywhere. Luckily he decided to build a snowman instead so the missing sled has not cost us anything... yet.

4. Snowpants for our youngest DD - I know we had a pair when my oldest was this age, but we can't find them anywhere. We haven't replaced them yet - hoping we can just live with it this winter.

5. I lost my wedding ring - it has been missing for about 2 weeks. Granted, it is just a wedding band - no diamonds or anything fancy - just a silver band, but it is also pricless to me. I am still on the hunt for it - I haven't given up yet.

I will continue to make progress in my organizing skills - maybe I will check out a book at the library for pointers, since I have been disoranized (lazy) most of my life.

Gas at $1.97 and other gas ramblings

January 19th, 2007 at 06:27 am

I noticed the gas stations around my area were under $2/gallon this week. Of course my tank is half full so I don't need gas right now since I normally wait until my tank is almost completely empty. Hopefully it will stay under the $2 mark for a while. I only drive about 15 miles a day so I only need to put in about $20 once a week or so.

On another gas subject - I do budget billing for my natural gas for the house. November was the end of my budget billing period and I had paid nearly $400 over the amount of my actual expenses. Don't get me wrong - I have been enjoying having 4 months with no gas bill - especially this time of year. Where the heck do they come up with that monthly amount - they actually INCREASED the amount I am supposed to pay once my credit is gone. A part of me thinks I should stop the budget billing and just pay actual costs, but the other part of me knows I am bad at planning ahaead and would just blow the extra money I would have during the warmer months/low bill periods. We actually just got new insulation installed last month also so I am pretty sure my bills will be lower this coming year.

I won't bore you with my DHs gas problems ... it's not related to money anyway Smile

The Grapefruit

January 15th, 2007 at 07:41 am

Grapefruits have been on sale the last few weeks so I have picked a few up each time I go to the grocery store. I am the only one that eats them, so I only pick up 2-3 each time. I like them, but I don't always have the time to cut one up in the morning. My mom saw them sitting on the counter and suggested I try eating them warm. What? are you crazy? Here is her method:
Cut one in half and cut the sections out like normal. Top with a little butter, brown sugar and cinnamon and place in the microwave for 45 seconds or so.

At first I thought it was pretty sad to put butter on such a heathly fruit, but I gave it a try anyway. Yumm-O! It was super juicy, sour and sweet. I will definately do it again.

The weekend was pretty good spending wise. I picked up my weeks worth of groceries and a few things at Sam's. Saturday my mom and I went to a wedding and I treated her to a latte on the ride down. She spent a lot of money taking my kids to Seasame Street Live last week, so I figured I should at least pay for the lattes. Sunday I had a no-spend and no-drive day. In fact I stayed in my pj pants all day. I love those days!

I am hoping to eat in for lunch every day this week. I have already said no to the bagel run this morning so I am starting off good.

I updated my budget spreadsheet up to the end of June. I was hopeing to have most of my car paid off my then, but I think realistically I will just be at the half way point of what is left. September/October is when I think it will be paid off. I really can't wait to have that payment out of my monthly budget each month. It will be like getting a raise!

Car Loans - they don't make it easy to payoff early...

January 9th, 2007 at 02:05 pm

I have my car loan through ford credit. From day 1 it has been set up to be automatically deducted from my account (like almost all my bills are). I don't have to worry about paying late, hunting down a stamp or anything.

This car loan is my next debt to tackle. I logged on to the ford credit website to find out how to make extra payments - can I do it online, or what address to send it to. I couldn't find exactly what I was looking for so I sent an email to customer service. They replied that the only way to make extra payments is to stop my automatic deductions and make payments manually. What I wanted to do is keep my regular payment and when I had extra money in my budget to put it towards the loan. Now I have to remember to do my regular monthly payment each month. I guess I should be happy I can at least do this online.

The debt snowball is beginning to roll

January 3rd, 2007 at 09:34 am

The last two weeks I have:

Paid off my school loan - $630
Paid off the little bit of christmas I charged from internet shopping - $200
Paid off my medical bill - $368

Now I should be able to concentrate on my car loan. I have about $6,000 left to pay. I am hoping to have it paid off by September by paying an extra $300 a month. This will pay off the loan a year early. I did a spreadsheet on how much I will save by paying off early and unfortunately it is only about $100 (I should have started this 3 years ago...), but I guess just having the debt gone is the most important at this point.

On another note - I have not spent any money (other than bills, debt payments...) in 2007! Yea!

Baby Step #1 - Completed

December 27th, 2006 at 11:15 am

I have started reading Dave Ramsey's Total Money Makeover this past week and I think I am going to give it a try.

Step #1 involved making a budget and saving $1000 in a small emergency fund.

I had already started working on a budget the past few months. This morning I did a little tweaking to it to make sure every dollar is accounted for (this is what he recommends). I have a little wiggle room in some of the categories so if something unplanned for comes up I should still be OK.

I also already have about $2000 in a savings account. I plan on taking $1000 of that and put it into a new savings account so it will be seperate from the rest of my money. I have already setup an account for irreguar bills (registration, insurance...). I am thinking of setting up a third for Christmas/Birthdays... how many savings account does a person need? Maybe I will just use my exising account at my credit union for this.

The next chapter I am going to read is about snowballing debt - which I pretty much know the concept of anyway. When doing my budget I realized I will be able to put more towards debt than I originally thought I would. So maybe this won't take as long as I had thought.

Also today I went online and paid my credit cards for the few christmas presents I purchased online. I wanted to start 2007 with nothing on my CCs and keep it that way.

I also took the leap and paid off my school loan - just over $600. I recieved a little extra money for christmas through presents and my xmas bonus so I just decided to go for it.

I am on my way!

Lower gas bills ahead...

December 15th, 2006 at 02:14 pm

Today we had more insulation installed in our home. We had an energy audit a few weeks ago and was told we were way low of the minimum standard.

I am actually pretty excited about this - I can't wait to see our heat bill go down.

Decisions, Decisions...

December 14th, 2006 at 02:39 pm

I recieved my year end bonus today. The company I work for just hands out small bonuses - not the thousands of dollars I read of others getting. I am still very grateful for what I get.

Anyway - the net of my check is $440. Now, what to do with that money.

1. I could use the entire amount to help pay off my school loan. I owe just over $600 so this would be the bulk of that loan. (2007 goal #4)

2. Put this money in my account to increase the 'buffer' in my checking account. This puts me within $200 of my goal minimum balance. (2007 goal #1)

3. Use $200 to pay off the purchases on my credit card from online christmas shopping. Rest can either go to the medical bill I owe or towards my school loan.

4. Open a new savings account for Christmas/birthdays 2007 (part of 2007 goal #3).

Hmmm... what to do... what to do...

2007 Financial Goals

December 6th, 2006 at 11:42 am

I have been inpired reading others financial goals for the new year so I have been thinking of my own.

1. Checking account balance - Build enough coushin so the balance never goes below $1500. The last few months the low point has been between $400-$800 before payday.

2. Keep using the cash system to pay for household purchases, gas and other small stuff.
Any extra bills at the end of the payperiod will go into into an 'emergency' cash pocket in case I go over the next few weeks.
Any extra change goes into the change bucket - Cash in periodically throughout the year.

3. Each paycheck deposit $50 for non-monthly bills and $50 for holidaybirthdays. Research setting up one of those online savings with the higher rates.

4. Payoff my school loan by the end of the 1st quarter (current balance over $600).

5. Find ways to lower other monthly bills.
**New insulation is getting installed mid-december of this year
**I have already replaced several light bulbs with the lower energy ones. Replace rest of the bulbs in the house.
**Car insurance - drop full coverage on DHs car - 1998 Monte Carlo. Insurance is due in March - get quotes from other companies also.


That is all I can think of now. I am sure I will add to it later!