Since we are getting ready to start squirreling away money for our downpayment fund, my DH and I have opened an ING savings. I know a lot of you like them and they pay a decent rate so we did an initial deposit of $50 to get it going.

Now we just have to wait patiently for the verification deposits so we can start putting money into it. We have twice per month that we can put money into it so it should be fun to watch it go up.

Right now, we are going to shoot for 20k before going house shopping which should be good for the price range we are looking at. Obviously though we will shoot for as much as possible.

Here is the background info. I have two remaining credit card debts, one at 0% apr, and one at 1.87% apr as of this month. They will remain that way til Feb 2009. My lease on my current place is up in February. I guarantee our rent will go up, if we rent for less than a year, it will go up by at least $300 per month (don't ask about month to month, the fee alone is 400 plus an increase in the rental rate itself and we will not sign a lease for one more year.)We want to buy something small and equivalent to our current rent or not much higher.

With the market changing dramatically, we will be in a better position if we have the ability to put 20% down and have closing costs covered. Our current plan of pay everything off then saving the money will make things tight and most likely won't allow 20% down. If instead we just pay the min payments on the last two cards, we will definitely have the cash on hand we need.

By keeping the debt we are keeping our options open. The increased debt will not affect our ratios because we want far less than they would willingly loan us.

So we are going to save like mad and start househunting in the fall. If we do go with a loan product that doesn't require all our cash or we get some assistance from the seller, we will use the remaining cash to pay on the credit cards. If not, we can pay the remaining debt with 3 months of our closing.

What you can't see from my ticker since I joined here after I paid the first part off is that we have actually paid off over 32,000 in debt over the past 2 years.

As much as I want the debt gone, I want a home far more, especially at those interest rates. There is only one other way of doing this that might be more financially reasonable and that is signing another year long lease (at a different place) and that is just not something we are willing to do.

That said, the plan could always change again as circumstances change but unless I am missing something, this is the best plan in the long run.

Okay, so lay into me. What do you think is wrong with my current plan and why? I am at least willing to listen.

I mentioned awhile back that was I was going to experiment with using a credit card for bills and cash expenses and see if it was appropriate for me. I have had a credit card number stolen locally in the past which makes me nervous about using a debit card.

So far so good. I treat it like my atm card except I don't have to be quite as paranoid about when things clear.

Point two in its favor is the vast simplification of my budget. Part of that is I have paid off two credit cards and part is that I have bills autopaid by the credit card.

Current budget

CC1: Paid in Full
CC2:$95
CC3: $2200
Electric: $70
Student Loan: $194
IRA: $150
Savings $25
Rent: $730

Way easier to follow than the 14+ item one I had before. Mind you CC1 has rules for use like how much for me, how much for groceries, etc but those are sort of instinct by now and the real bills just pay themselves. I have to worry about missing a bill a lot less. In fact I only have to schedule 4 bills anymore since everything else is automatic. And pretty soon that will be down to 2 since 2 of the cc's are going away very quickly.

I really was afraid it would be easier to spend given my previous expenditures but it seems that somewhere along the way I actually learned some discipline. Imagine that!

I even periodically double check the budget overall to make sure things stay on track.Can't wait to change my ticker to a savings tracker instead of debt tracker.

My friend managed to get a contract job for about 2 weeks. This means $600 less dollars I need to give her. WooHoo! She has also been doing a good job of staying within budget which is better than I did with my first budget. We will probably do a quick talk about next month's budget this weekend since I should deposit the money into her account then anyways.

She has the budget printed out and on her frig so she won't go over so she is definitely committing to this whole budgeting thing. Its still difficult for her to imagine a budget that actually covers everything but time will help with that (her previous concept of a budget had no place for groceries, gas or personal expenditures, not very useful).

Now I just have to wait impatiently until next month for my next debt payoffs. I hate waiting...

I have a credit card that tracks my credit score and the latest was 729, woohoo! Unfortunately and fortunately, that will probably be the last update until I go to buy a house because you have to have activity on the card for it to track the score. And since I just paid it off completely, no more activity.

My stimulus check is no longer going to go to debt. The $1200 check from the gov will go towards my friend's living expenses to keep her afloat through the upcoming month since she still hasn't found work. The good news on that front is that she has an interview on Monday for a full time job in her field. Its less money than she would like but she can't afford to be picky with her lack of experience.

Hopefully we will know more in about two weeks.

First the good news, as of 5/16, I will be down to only 2 credit cards with balances (1 of the 2 is 0% apr).

Now the bad news. My friend that had been doing well finding temp work hit a dry spell and needed money so as to not crash and burn. It was only $800 but that is money that was originally scheduled for debt repayments so my payoff this month will be lower.

I am getting her more comfortable with the idea of budgeting and I am helping her track it more frequently. I think once we get her used to the idea of an allowance, she will not do the starvation/binge cycle that she always does.

Its still slow progress getting her used to it since her parents taught her nothing about finance and she never took any classes on it either (in fact, her parents are the worst examples ever so don't want her to emulate them).

However, she is starting to be a bit more savvy and the constant exposure to our budget is helping her grow more comfortable with finance. She is beginning to really want to develop an emergency fund so she isn't in constant panic mode and she is willing to work to get herself to that point.

Her big holdup at the moment is steady employment. Mind you, if she had ever built an emergency fund I wouldn't have to bail her out but baby steps, at least she is going to try living on a reasonable budget. I have even gotten her to agree that she isn't allowed to spend more than $20 on a person till she has an emergency fund set up (yes this is an issue).

I am still on schedule to payoff in August but a couple more setbacks like that could start to impact the payoff date. Hopefully she gets a contract or a full time gig soon. She has definitely been applying for stuff.

So since my DH has received an increase in base pay and a larger than anticipated bonus, we get to make an extra payment of $500. This means that we will be paying $3000 on credit cards this month! :O

That is almost 1.5 times my income. Oh and I am moving the payoff date from September to August since we only need a half payment in August to finish off the credit cards. I swear I already tried to do this once, must have gotten distracted. Now a really neat trick is if we could finish everything in July! But don't count on it, lol.

We have also decided that no matter what, we are not resigning another lease at our current place. We could live in a shack and still be better off than our current place. So we will try to find a house before February. Our price range is up to $75k (because we are cheap not because we couldn't officially afford more and we want to be able to put 10% down, have closing costs and still have a couple thousand in the bank for repairs, currently shooting for 18k+.)

Obviously this won't be a perfect house from the get go but if we don't have to boil water to have hot water for a couple of months, if we don't have a broken thermostat for 3 months and if we don't have the smell of paint thinner permeating the air from the apartment next door being remodeled it will be better than where we currently are.

My DH got a rather large increase to his base pay yet again thanks to the company restructuring the bonuses. It means the high won't be quite as high but he is guaranteed more. It doesn't change our budget because we already were guestimating a certain amount for bonuses but its nice to have a bit more certainty.

We went out to eat to celebrate and spent $17 total. It was really just an excuse to eat out but that is a small enough splurge to not be an issue. Especially since that is all we are spending.

This month I will have fun updating the ticker, we will be paying in full a $2100 credit card. Now I just have to wait for March, grrr...

I discussed with DH our finances last night. Found out that we have exceeded his allowance for out to eat food, yet again. He decided that the easiest way to avoid that is he will actually start pulling the cash out at the beginning of the month and when we run out, we run out.
He will do the same with his allowance or fun money too.

Me, I just need to stop spending. Since we seem to need something from the grocery store every week, I will translate my grocery money into a weekly limit instead of a bi-weekly limit. $60 per trip should get that expense back down to size. Also, only one grocery store per weekend. The double trips are really killing the budget.

No more eating out at work, that isn't where I want to spend my money so its time to crack down(AGAIN, and I was doing so well before January).

Fortunately, despite our setbacks, we are still on time to our payoff date. We just need to be very careful and make sure we pay attention to what we are doing.

So I ended up tweaking my allowance. As much as I want to be debt free, having a too aggressive payoff that doesn't allow for clothing, vacations or any splurge money qualifies as needing adjustment.

Its only $50 but it will give me some breathing room for both things I need and things I want.

I am getting this money by dropping my 2 credit cards that I am not currently doing massive payments on to their min. payments.

Part of the reason I need to do this is that I have other expenses that have climbed on me.

New Budget
Water and Sewer $40
Savings $25
IRA $150
Cell Phones for 2 $84
CC1 $68
Electricity $110
Cable Internet $62
CC2 $126
CC3 $1700 + any monthly bonus from DH (est ~$500)
Groceries $250 (if this goes over, it comes from my allowance)
My Allowance $160
Netflix $15
Student Loan $194
Bus Pass $60
His Allowance $250 (vacation money needs to come from this as well)
Rent $750
Eating Out $100

One thing you will notice is that this is a budget that includes money from both DH and I. We are working together to get rid of my credit cards so that we can be debt free by September.

So I will be getting this card. It's 1% back on everything which means its going to become my bill card. It also has more cash back based on merchants. Once the rewards reach $50, they mail you a check automatically.

Its better in every way than my other cash reward card so I can get rid of that once all my credit cards are paid off.

I am pleased because I have been currently using one of my unrewarding credit cards as a test run for bill paying and it has worked but I don't get anything back.

I do think I won't fully switch to a credit card bill paying method until all the old credit card debt is gone but for now it works well to balance out the grocery and household need items.It also ensures less hassle if someone gets ahold of my credit card number.

So decided to see what portion of our budget went to what and here are our numbers.

Necessary Expenses - 32%
(or better to call this hard to cut expenses since some of them wouldn't qualify as true necessity.)

Fun Money - 13%

Savings after tax - 5.4%
[doesn't include DH's 401(k, he currently contributes 5% of base pay to get 100% match)]

Debt Repayment - 51%

If one of us lost our job we would still need 45.5% of our income to meet all our obligations at the moment(includes min payment on credit cards).

Once the credit cards are finished and we have bought a house I am shooting for the following:

Necessary - 40.5%
(includes mortgage and taxes since its the equivalent of rent)

Fun - 17%

Savings - 38%
[still not including the 401(k)]

Debt - 4.6%
(one lonely student loan which will have a lower interest rate then the mortgage and is on the 10 year plan)

Course, this is overly simplistic and requires our salaries to be frozen in time and my DH to fail to earn any bonuses BUT it does give me something to look at.

So we have been wanting to avoid pesticides and other lovely chemicals in our foods. To do this, we decided to start shopping at Sunflower Market. Its a grocery store that is set up like a farmer's market (75% of floor space is devoted to produce, cheese, bakery bread and meat). We used to shop there when we lived at our other apartment but it wasn't as convenient for us at our current place.

Now, I was a little nervous about the expense since a lot of organic stores are way more expensive. Imagine my surprise then when I discovered that it was cheaper than the grocery store I have been going to!!

The milk did cost more and flour would be pricy too but the produce is sooo cheap in comparison as is the fish that it couldn't even compare. We spent $86 on a trip that normally costs us over $100.

So I am going to drop my grocery budget back down to normal since it looks like the costs will be comparable in the long run.

Woohoo! My bonus being added to my debt money was a very nice addition. I am debating how much to make dh pitch in on stuff. I may just let him splurge for a little bit since he paid off his 20k. He's earned it. Sides, he is picking up the tax bill this year so that is a big one off my list. I think I will just make him pay for any travelling we want to do.

Oh, here is the latest version of my budget if anyone is interested.

Savings $25
Roth IRA $150
Water and Sewer $45 (actual range is $35-45)
Cellular phone for 2 $84
CC1 $100 (balance 3403)
Electricity $100 (actual range $80-100)
Cable internet $62
CC2 $150 (balance 6326)
CC3 $800 (balance 7053)
Groceries $250
Allowance $150
Netflix $10
Student Loan $194
Bus Pass $60 (my work pays for one of them)

CC4 has been paid off. Normally I would snowball but in this case, my big monster has the worst apr by far at 10.99%.

Now I just have to pretend that I am a patient person.

So my dh got his promotion he was hoping for along with a pay raise and chances for bonuses. So a couple of changes to his budget.

A bonuses will go to the downpayment fund

$1000 per month to the downpayment fund

$250 to his allowance and any expenses that crop up (so the majority of this to the downpayment fund as well).

All in all, this will definitely make our goal of getting a house next February more achievable.

As of this past Friday my husband is debt free. So that would be the first half of the debt eliminated (yes, you read that correctly, half). Starting this month, he will begin to fill up the house downpayment fund and next month he will start receiving an allowance to do with as he wants!

This is actually a month ahead of schedule thanks to overtime.

So now all that is left is mine, no pressure there...

I have yet again upped my monthly retirement contribution by $50. Its my reward for getting my expenses under control and a way of making sure I don't spend that money frivously. After all, I spend what I have so if its not in my pocket, I can't spend it.

I was debating whether to put it towards debt or retirement but the problem there lies in the fact that I tried that last year and made no progress on my debt. So I figured this way I would know I made progress of some sort. Though I must admit, the little debt ticker is useful in that I can see when I have stalled or failed completely.

I have also received a $10 Panera Gift Card from Mypoints.com. I am very happy about that. I have a feeling that any eating out we do this month will occur in the last week. My business trip cured me of wanting to eat out,lol.

So I finally updated my ticker. The problem being that for some reason I ended up spending money on one of my credit cards so I wasn't actually making progress. Now I am going to have to look at the last two months and figure out what I messed up in my budget so it doesn't happen again.

Oh now I see it, out to eat and helping my friend out longer than I thought I would have to. Well, the out to eat is to expected, we just switched from $250 per month to $100 per month and I never do well during the initial transition and the other is over. So my budget should be fine now.

On a positive note, this month I have done extremely well and next month is when all of my husband's cards and one of mine get paid off. I am definitely going to enjoy that.

So for those of you curious, here is what my new budget is going to look like:

Savings $25
IRA $100 (still debating taking this to $200 prior to paying off next cc)
Utility $50
Phone $84
CC#2 $700 (CC#1 will be gone in one week)
Electric $90
Cable $62
CC#3 $150
CC#4 $200
Groceries $250
Entertainment/Travel $100
Lunch/spend money $100
DVD rental $10
Student Loan $194
Bus Pass $54 (or whatever the price rises to since it should be going up in Jan)

Husband's will be:
Rent $700
Eating Out $100
Down payment savings $800 + bonuses and extra pay periods

Hmmm...not pretty. I just added up all of my expenses and I am not impressed.

So for 2007, on my end of things I have only been paying $140 per month on credit cards which covers only interests...So yea, I am not digging deeper, but I am not making progress either and now I can see why. No wonder people resort to cutting the cards up.

*Sigh* Two steps forward, one step back. At least my dh will be debt free as of January.

The good news is that eating out is no longer my budget killer...the bad news is that my toys now are the budget killer.

The good news in that is that I no longer have any toys I want..the bad news is that I am sure something else will come along to destroy my next budget. Grrr.

Okay, enough self-pity. This is what I will do. As of Jan, I will make sure the budget will have room for entertainment, clothing and "miscellaneous" expenses by using this year's expenses as an example. I have seen where I can downsize and will accordingly do so.

Boy, I should start paying attention to things that promise me money. I just received $2.00 today in my paypal account from Esearch.com. It was only when they mentioned for what survey that I remembered it. Well that's nice at least. Not that I know what I am going to do with $2.00 in my paypal account, lol. I will probably wait till I get another payment and then cash it into my account.

So I noticed with one of my one survey companies, surveyspot that their question section kept mentioning my account but I didn't have access to a member's area. So, looked a little farther down this time and realized that they did have a link to a member's area and that you had to request them to cut you a check (this little thing only took me two months to figure out *sigh*.)

So now I have a $37 check for my first round of surveys coming to me. I figure I will use survey money to supplement my out to eat budget since I really love eating out but its way too expensive.

So I have been waiting to find out the size of my raise and my boss gave it to me today. It will mean almost $200 extra per month (take home) which is nice. That will help me eliminate some of my debts a little quicker and then go straight to the downpayment for a house.

I may have to use some of that though to replace my mp3 player that I broke. Something about bouncing off a marble floor while shutting down is just not healthy for it (I have only dropped this one 3 or 4 times *sigh*). Have I mentioned I am clutzy? I will have to price shop for a little while to see what I can find. They are definitely worth it despite the fact that I kill them within a year from the constant dropping on concrete.

I have decided that having two weekend plans and suddenly having a social life all in the same month is very painful for my budget.

Its been at least a year since I needed money transferred to my account so that I wasn't skating towards the edge of overdrafting but today I had to transfer money from my savings account to my checking to make myself comfortable. I don't consider $2 sufficient funds in case something unaccounted for is cashed against my account. Yuck.

Mind you I have a couple hundred sitting in my account but there is a potential 2-day gap between when most of that goes to bills and I get paid again. I suppose I could have let up on my debt payments since they are fairly aggressive but I honestly prefer transferring $25 from my saving account (which pays almost no interest and exists solely for months like this) than slow down the debt repayment. Still feel like an idiot though...

Well, got to say. I thought the cost would be worse but we definitely need to behave for the rest of the month.

We did the Royal Gorge Railroad gourmet lunch and it was fantastic. Definitely an awesome experience. Then we went to Garden of the Gods on our way back to Denver (free entry so this didn't cost anything).

We ate out supper at a fairly reasonably priced place and then went and played pool at a pool hall until the wee hours of the morning.

Sunday we went to a friend's house and saw her babies and her for a little bit.

Total damage as of this weekend was under $200 with rental car and gas for driving all over. So overall, not too bad for what we did.

The real trick will be behaving for the next 2 1/2 weeks which is what we need to do in order not to go over our budget.

Next weekend we are definitely staying home except for the couple hours where dh is going to work overtime. I need time to cook, lol.

So my dh's promotion is slowly being figured out. Its currently looking like no increase in base pay but there will be a bonus come December. The other processors figure that he is guaranteed at least 1500 and maybe even as high as 3000. Either way, we are going to use whatever he gets to eliminate one of my credit cards so I can begin saving my share of the house down payment (all his credit cards will be gone by then)and to pay any tax that is due this year.

I won't know about my raise until I get my paycheck on the 31st of this month. Our office administrator is out on maternity leave so its the paycheck that will tell me instead of her. :P

Will be nice when this all comes through so that we can actually plan around it.

So because this month has had a lot of expenses in it, I am going to have $65 to last me the rest of the month. Fortunately that only has to buy groceries and any out to eat lunches (aka there will be no more of those this month).

Main reason I am this poor is because I am trying to double pay some of my bills that keep moving too close to being on the wrong paycheck. I have a community utility bill that must be mailed in that went from the 9th to the 6th and now to the 3rd and I would prefer to have it post on the last paycheck of the month rather than the first of the month.

The other reason I am this poor is because we have two big spending weekends this month and while I saved for them, my friend decided to add on the additional expense of a fancy restaurant on top of everything I am already doing (her birthday party).

The good news is the pantry is stocked, we can afford to experiment with different dishes because we have plenty of ingredients and there is nothing to spend money on beyond this weekend.

The bad news is that I am worried that two and a half weeks of not eating out will kill me. :P Especially since next month I want to switch to only spending $100 instead of $250 of my dh's money on out to eat.

Going out to eat is sort of an addiction for me. I need to break that habit. I have gotten better (we used to use $400 of my dh's money for out to eat) but I really need to still cut back. Especially since that doesn't count the $100 I spend on out to eat food...

*Takes a deep breath and begins to chant under her breath, I think I can, I think I can...*

I have been so good with my budget lately that I finally feel comfortable switching my monthly contribution to my IRA from $50 to $100. I had only had the IRA going for 2 months now but the $50 was my way of leveraging in.

I am one of those weird people that have to gradually take money away from myself. Its why I would never consider having a joint account with my dh, I spend what I have and that would be asking too much of me. Forced savings, as a result, work really well for me.

The $100 monthly IRA contribution is my reward for doing well. I like to watch the money go up. I had a 401(k) at my college job and I literally watched it go down for the next two years. I learned my lesson from that, conservative just means you can never make up what you lose. :P

This new one is in T. Rowe Price's Retirement 2050 Fund and once I have a couple k in there, I will probably add an international index fund to add a little more diversity. All in all very happy with this one and its historical profile. Its also nice that the $10 per year fee goes away after you reach $4k which should be sometime next year...

Okay, here is the current view of my financial life.

My Income: $2000

My Budget:

Savings: $25
IRA: $50
Common Utilities: $40
Cell Phones (for 2): $84
Electricity: $110
Cable Internet: $62
Student Loan: $194
Netflix: $10
Bus Pass: $54
Groceries: $200
Extras: $200
Card 1: $500 (was 6.99 then they realized they weren't making any money so now 15.69, yuck. on ~$1500)
Card 2: $200 (11.24 on ~8500)
Card 3: $150 (11.28 on half/ 5.99 on other half ~6000)
Card 4: $100 (8.99 on ~2500)

So obviously, things changed on me. Since my 15.69 card will be paid off in December, I am not going to bother trying to replace them. They just changed the apr this month which is why Card 3 has 2 rates, instead of one. Also, 4k of this is from moving the friend out. I realized awhile back that my first budget wasn't agressive enough to deal with things that might crop up so, believe it or not, we have paid a lot of debt off even on my side of the equation.

His income: $1800

His Budget:

Rent: $700
Out to Eat: $250
Rest to credit cards. His last one is gone in December.

Come January his budget becomes, $700 to rent, $350 for miscellaneous expenses, and $800 to saving for house.

Mine switches in April, with the elimination of Card 1 and Card 4. That $600 will go to saving for a house.

I have done the calculations quite a bit and no matter which way you split it, if I want to get into a home next fall, my last two credit cards need to be paid off far less agressively. We have this lease through Feb 09 and we are going to be moving into a house of our own. Thanks to the recent fall out of the housing market, our range of $65-$100k buys a decent house close to downtown.

I know it costs interest on the credit cards to do it this way, but I am sick and tired of dealing with new landlords every 6 months to a year. Especially since each one gets progressively worse...

Oh, and what you aren't seeing in my dh's column is that he now has a 401(k) which is why his pay hasn't changed.

What is also not showing is my raise in late October and the fact that my husband has just been promoted. My raise will go straight to card 2 and 3 and his, well, we aren't sure what his will be so we will adjust when we have it. It will probably go straight to the housing fund.

Obviously, something needed to be done. My dh's credit cards had the worst apr's so they had to go first.

My Income: $1800

My Budget:

Cell Phone (for 2): $80
Electricity: $80
Cable Internet/TV: $120
Student Loan: $205
Bus Pass: $54
Groceries & Extras: $600
Card 1: $300
Card 2: $150
Card 3: $400
Card 4: $0 (not due until a year later)

His Income: $1800

His Budget:

Rent and Common Utilities: $750
Out to Eat and Shopping Trips: $400
The rest to his 3 credit cards in order of apr.

As you can see, this is a cut but not a drastic one. It hurt at the time though. We had gotten used to doing what we wanted when we wanted.

However, this looks nothing like our current budget...

Okay folks, here are my scary numbers. This was what I started with without realizing it had gotten this far out of hand.

Take home income for me: $1800

Bills for me:

Cell Phone(for 2): $82
Electricity: $80
Cable Internet/TV: $120
Groceries and Extras: $800
Student Loan: $205
Bus Pass: $54
Card 1: $200 (11.24apr on ~$9000)
Card 2: $150 (6.99apr fixed on ~$3000)
Card 3: $300 (11.28 apr on ~$6000)
Card 4: $0 (0%apr/0 payment until due, ~$2400)

As you can probably guess from payment size to balance size, I wasn't paying the minimum, I was paying more. Honestly, I have never just paid the minimum and would have sought debt counseling if I was.

Here is where the upset came in.

Takehome income for him: $1800

Bills:

Rent and common utilities: $750
Out to eat: $400-600
Shopping trips: $200-300
Card 1: min (12.9apr on ~$3000)
Card 2: min (11.99 apr on ~$4200)
Card 3: min (8.99 apr on ~$900)

I hadn't realized my dh had credit cards or was paying just the min. on them. Ouch. Needless to say, when I sat down to discuss finance with him and found these, I was a little shocked. I had thought I was taking what debt was needed and that then we would together pay it off after moving and everything. (By and by, I had been sitting him down so that we could do a budget to pay off the credit cards, I just hadn't realized how much we needed to pay off.)

This lead us to do our first budget...