So with all this talk of the Money Makeover, how'd we do this year when you look at the figures? I admit, this is a post for math nerds and bean counters. But here goes, complete with my analysis of what changes made the difference...good and bad.
 

 

Our income was up 10% due to pay equity coming into Paul's workplace. My inheritance helped finance our unexpected and large capital expenses. Truth be told, we did okay on the income end of things. Let's see how we spent it all, compared to last year...

By taking vacations closer to home, and driving rather than flying, we saved a lot of money. There were no charges in 'accomodations', for airfare, or for vacation really. That saved us over $3000. When we went to Winnipeg this spring I paid for our accomodations with my inheritance...a treat for Paul from Mom (and me). The museums and other attractions came from our regular entertainment budget.

 

Entertainment was 20% of last year's figures (yes, a drop of 80%). I attribute this to my attempts to find fun frugal/free things to do locally...especially frugal date nights. Certainly we didn't hold back in Winnipeg! I think we must have seen every museum and art gallery there. Not to mention the quilt show. Family provided entertainment on our trip to Alberta in the fall. Other than a trip to Millwoods Recreation Centre...for a whopping $11 for both Paul and I...and loads of fun in a wave pool and on a waterslide. We have been to a nearby spa a couple of times, but we usually pay for that out of our health budget. As it seems to have the same effect as a massage therapist at half the cost for two of us, we decided it was appropriate to take it out of this category.

 

Allowances stayed the same, though there has been a suggestion by the girls that we really should increase them. Apparently they feel we are doing without too often!

 

Bank charges dropped by 10%. Not much, but then we didn't change bank accounts till mid-year. And we've been taking some time to adjust to the changes. Right now I'm happy we were able to do an all cash Christmas and few debit transactions.

 

Clothing went up 30% to $1300. This was mostly the result of replacing clothes for Paul. This represents quite a hike.  Paul is tall and thin and hard to buy for at the best of times. When I find it, I buy it. Paul really needed an all weather coat for bicycling to work. We were able to pick one up on sale for $200...but it's a good coat and will last him many years.  This is one category I'm going to have to do a detailed analysis of, as it seems rather high for Paul for one year.  I've been buying thrift store stuff, but I really didn't need anything this year...

 

Dining went up 25%. Again, this is due to traveling and not staying with family...or staying with family who don't like to cook. It simply costs to eat when you travel. We found ourselves more willing to spend in this category on vacation. It motivated us to eat at home when we were in town. We simply grew sick of restaurant food on vacation. Someone suggested ordering in instead of going out to eat when we stay with a particular relative not fond of cooking. I think he likes to go out for the experience and to be around other people though. So I don't really know how to handle this, other than suck it up and pay the shot.

 

Donations went up because income went up and I asked to double our charitable givings.

Gifts given this year actually went down...until you consider the contributions to the girls' university education. Then it goes wonky. Otherwise it was down 17%. This was due to my efforts to make gifts and to buy on sale, etc. (see Christmas posts), rather than any real decrease in gifts!

 

Groceries actually went up $350, from $4385 to $4731. I have a few things to say here. One, we are eating healthier. Two, prices have gone up 50-100% at the store. Three, Meghan left home in August. BUT we've been supplying food on the sly to Lisa whenever she'll let us. So I'm not totally unhappy with this figure.

 

Hobbies are down 50% . This does not count the equipment I bought with my inheritance mid-year. This is for supplies and materials...think thread, fabric, beads, etc.

 

Household was down 50%. Somehow Paul managed to cut computer expense in half. I think this is because we have been careful about printing things out. We always use draft, always print double sided, and are using up paper I inherited. We've been finding cheaper ways to buy programs. Mostly they are coming as birthday gifts or out of our personal allowance.

 

Furniture and appliances, which fall under household, is also down 75%. No new bed like we had in 2007! We really don't allow much in this category. I believe we'll have a year coming up in which this particular category will go haywire for awhile, as we replace old broken down furniture and find more suitable furniture. We really need a sinking fund for this...which we don't have.

 

Miscellaneous was up 15%. Not sure what's going on there. Will have to do a more detailed looking into that one. Household supplies was up too. This would be HBA and cleaning products. Paul has decided to do all his family history photocopying from his allowance, saving us some money there. And postage and delivery was axed over 75% by not sending Christmas cards and parcels this year.

 

House insurance was up. Property taxes was up. House and yard repair and maintenance was up, but that was planned for...for the most part.

 

Utilities were all down, a reflection of Meghan leaving for university. Except the Internet, which went up. Meghan used to split the cost with us for a high speed connection. Now we pay the full shot. The utilities were down 20-30%, depending which one we're discussing!

 

Life insurance was up. Drugs were down 30%...a reflection of my attempts to make do with alternative therapies. Most of these therapies are covered by Paul's work health plan...at least, for the first $200 of treatment. Acupuncture was covered by the inheritance. Medical specialists cost went down 25%. Miscellaneous medical went up tenfold! That will be my Finn Comfort shoes that didn't work in the end. Plus the two trips to the spa. Optometrist was outrageous at $650. I'll be looking for someone more affordable next time. Vitamins, minerals, etc. actually went down...which I find very interesting. I was hardly on anything last year, but what I was on was very expensive. By shopping around, buying on sale, buying bulk, and carefully selecting ones that complement each other, I've been able to reduce the cost AND find more effective results for myself.

 

Recreations was down 75%. Again this was due to finding affordable fun ways to entertain ourselves this year. It also reflects dropping the gym memberships. I couldn't have used it anyway, the condition my body was in.

 

Transportation has been a nice surprise. It's dropped over 50%. We actually spent less on fuel, despite two long car trips for vacations. Insurance went down...surprise. Maintenance went down. Registration went up. Total savings this year 40%. Not bad for a year that gas prices went through the roof!

 

I attribute a lot of this to taking a new approach with regards to driving. Not only is the car going out less, but when it does it is on loop errands. I've learned to make do rather than run to the store every time I run out of things. I am only do one big grocery shop every two weeks. The rest of the time we just make do with what's in the house. If I do need to do an extra shop, I do it when I'm in that part of town for something else. We've also been shopping the Farmer's Market more...which is within walking distance. That, no doubt, has contributed to our increased grocery budget.

 

We've put some extra money into Paul's bicycle to keep it on the road. It's saved him on car costs and bus fares. Plus he is getting good exercise.

 

Overall we managed to save 18% of Paul's gross pay this year!!! This is absolutely phenomenal from my perspective. I attribute this to the accountability of the Money Makeover both here and on the Frugal Village site. Also to Gail Vaz-Oxlade and Dave Ramsey - my personal finance heroine/hero - for the example they set. Thanks guys!

The last couple of days have been busy.  Yesterday saw three guys here cutting and pruning trees.  The stump removal guy is due here next week.  Then we'll look at renting a log splitter to split all the logs.  Will see what Paul decides on that.  He's the one chopping wood if he opts not to get the log splitter.

We canceled the energy audit.  It was going to cost $350 total and tie us into an 18 month time frame to do the work.  All it saves is the taxes on the various things we get done...if that.  We don't like the time frame lock-in, so we canceled.  We'd rather save money for the girls' education and a trip to Costa Rica.  The house will have to wait...yet again...  Not only that, but the kitchen redo is a higher priority than energy efficiency right now.  We want to save up the money in advance for that.

I retooled the budget this week.  I reduced our grocery budget by one third, now Meghan is no longer with us.  I've also modified a few other categories, but not by much.  I'm waiting till the dust settles from all this renovation before doing anything major.  And I want to do it with Paul. 

I find Paul, while turned off of Dave Ramsey's aggressive style, is not turned off of all his ideas.  I mentioned putting more into his RRSP and he actually thought it was a good idea.   So I will build a budget change for that this fall.  We entered into a discussion of who's RRSP it was best to put the extra money into.  Because of our age discrepancy, it might be better to put it in his.  But he thinks it doesn't matter, with the new income splitting rules.  He's 7 years older than I am.  He's also assuming I will never earn income...which could be a grave misjudgement.  I'm suggesting we put it in his RRSP.

For everyone's information, Dave Ramsey's plan builds on 7 baby steps, as he calls them. 

1. Set up a baby $1000 emergency fund.
2. Pay off debt using his snowball approach.
3. Put 3-6 months of expenses in savings.
4. Invest 15% of household income in retirement vehicles.
5. College funding for children.
6. Pay off home early.
7. Build wealth and give.

We've already completed steps 1, 2, 3 and 6.  We're struggling with 4 and 5 at the moment.  And not sure where to put necessary expensive home repairs.  I guess they'd go under #6?  We really don't have an option of whether to have a new roof or not.  We simply have a choice of how expensive a job we want done.

So, when the dust settles the end of September, we should be able to come up with a budget to accommodate steps 4 and 5 of the DR plan...I'm hoping...

This is not necessarily about children's allowances. 

Earning money is a big issue in our home right now.  With Meghan panicking about not having enough money for university, I decided to kill two birds with one stone.  I offered her a job.  Paul isn't able to keep up with the basic cleaning, let alone the in-depth stuff.  I offered Meghan $20 an hour to do some deep cleaning for me.  She's thinking about it.  But her eyes lit up at the opportunity.  I'll have to work with her to show her how it's done.  But I'll gladly give up $20 of my allowance a week to get this place cleaned!    I'm going to make a list of typical chores I need done so she has a better idea of what's involved.  Have to be careful though.  I don't want to overwhelm her.

On the subject of allowances...Paul and I still get allowances every payday.  We started out with just $10 each to spend as we wish.  Now we have $40/payday.  We do not value the same things or have the same priorities.  This allowance saves our marriage!  I am able to go out to cafes for tea, and I don't have to listen to Paul whine about the $2 I spent.  Yes, he used to do this.  No more!   I also use my allowance for most of my hobby and reading supplies (best to use the library here).  My hobbies are quite expensive, so the allowance always runs out before payday.  Especially if I have a stitching retreat I want to go to.  My allowance is shot if I try to pay for one of those out of it!  Still, Paul is able to support his less expensive hobby of family history out of his allowance...unless you count traveling places to do research!  I also use my allowance to cover church events.  Paul frowns on those coming from our family budget for the most part. 

The key thing is this money is ours to do whatever we want with.  Neither of us has any say as to what the other should spend their money on.  It is freely given.  It is not counted with the jar money or tracked...unless we want to track it ourselves.  It's money to blow however we want! 

I highly recommend couples have their own personal money to blow...both of you...the same amount.  Just to blow on yourself...not for household stuff.  This is just for you...over and above any other household budget money you might manage.

Update:
Meghan decided she did not want to clean house even for $20/hour.  Paul is disgusted with her.  I'm just totally amazed at her lack of concern about earning money for university.  I stressed with her today that she has to go out and look for work for the next month then.  I know she won't, but she is really ticking me off.  I'm not giving her anymore money than I absolutely have to!  KIDS!!!  She has, however, been writing for scholarships.

I discussed Mom's terminal tax situation with some friends yesterday.  They strongly recommended I get in touch with CCRA (Canadian Customs and Revenue Agency - our income tax department) and talk to them.  The executor is moving slowly, claiming he hasn't got Mom's OAS (Old Age Security) form yet.  I was told by my friends those were sent by the end of February. 

So this morning I phoned CCRA, OAS, my accountant and the executor.  Grrr...!  Executors!  And I thought we had a good one...sigh...

So that was my tackle for today.  I am so thankful for the support and suggestions from my friends yesterday.  It made all the difference to have their advice on what to do.

Update:  I talked to the executor and found out he is not well.  He is not ready to hand over the work to me yet, but was comfortable about the work I had done for him and the accountant to help them along.  I came to an arrangement with CCRA about how to handle the taxes, so that will be dealt with immediately.  That will be a relief!

I stumbled upon the blog, Change Your Tree, today.  After reading the article on living paycheck to paycheck, I decided to pull out my financial charts from last year and see what my problem was.  Well, we don't live paycheck to paycheck, but I thought comparing the figures would be interesting.  The author of the article claims people live paycheck to paycheck for any one or combination of six reasons.  They are:

1. "You don't know where your money's going,
2. You're house poor,
3. You don't own your cars,
4. You like stuff,
5. You carry credit card debt,
6. You don't make enough."

I think I know where my money's going.  I have the charts in front of me for all of last year.  I can't claim that as a problem.  Except it's done in hindsight.  Doing the Money Makeover and using the jars and budget binder have helped with that on a daily basis.  As have the weekly budget meetings.

I'm house poor?!  My mortgage is paid out.  We spend approximately $7500 per year to stay in the house.  That includes insurance, property taxes, utilities and upkeep (which is about to skyrocket!).  From searching the Internet (especially the Mother Earth News website) I can find people who live on less than that for an entire year...but...they buy rural land, build their own cabin, heat with wood (they don't live on the prairies!), etc.  Still, I can't say we're really house poor.  But we could move into a smaller home and reduce this expense...maybe.  I hear bungalows are more expensive to heat than two storey homes.

We own our one and only car, and will not go into debt for one.  Period.

"You like stuff"...sigh...$9500 in stuff last year!  This includes gifts, household, miscellaneous, vacation/recreation, office supplies, computer supplies, clothing/haircuts/shoes...yep, I'd say we're addicted to stuff.

We do not carry credit card debt, but I sure like to nickel and dime us to death with them.  It's a good thing they are put away again.

We do make enough money, which is why we aren't living paycheck to paycheck any longer.  So...

Looks like stuff and the house.  Paul doesn't mind.  He figures that's what his salary is for...stuff and the house!  I'm finding the surprising categories not included are food, medical and transportation costs.  Those were:   $4330, $2000 and $6520 respectively last year.  I think this guy's figurings for why people live paycheck to paycheck could use a few improvements.  

I can also see we need to make a few changes.  That's a lot of money to spend on those items.

Paul and I have been watching "Till Debt Us Do Part" together.  As a result we've had some good chats about finances right now.  We're re-evaluating everything.  I am setting up a series of financial goals or challenges for us for the New Year.  Basically, I'm pretending we're the lucky couple on "Till Debt Us Do Part", and I can just hear what Gail would have to say to us when we behave a certain way!!! 

Paul is laughing.  I am so thankful God gave me a husband with a good sense of humour.   This morning he took me up and showed me how to enter money spent into Quicken.  So far, so good...  I also want to learn to set up accounts in Quicken.  I have an older version on my computer.  Hopefully today he can show me how to set up accounts for a business...another January challenge.

Other than finances, we are finally prepared for the Christmas season.  Meghan helped with the Christmas baking.  We ended up baking 3 times!  The first batch went as gifts. The second batch we ate. The third batch went as gifts and the leftovers are sitting untouched for the next week.

I had a friend pray for healing for me over my cold.  I could feel the sore throat reverse and come up my throat and out my mouth when I thanked her afterwards.  I just couldn't believe it!  I so believe prayer works.  But, just to be sure (!!!), I made sure to have some decaffeinated green tea with honey and echinacaea.  But, ever since she prayed over me, I've had no recurrence of symptoms.  I am so happy.  I sang just fine yesterday morning.

With feeling better, I was able to do some prep work for Christmas yesterday.  I made our Christmas Eve tortiere and put it in the fridge.  Put together a saskatoon pie for Christmas Day and popped it in the freezer.  I'm all set!  All the presents are wrapped and under the tree...except the Santa ones. 

I phoned my older lady friends and made sure all of them were taken care of before settling our Christmas plans.  We had Meghan's boyfriend over last night for supper.  He's a good kid.  He finally let us know his plans.  We'll have an extra body for Christmas Day dinner.  That will be fine.

I had a wonderful Christmas card sent to me via email.  Check out Andies Isle and scroll down to "The First Christmas Gift".  It's really beautiful.  One thing about Jesus as a gift...he doesn't wear out and he doesn't need batteries!

I will not be posting the rest of today or tomorrow, so Merry Christmas everyone!

I think I would have a Super Saturday if I wasn't sick!  I've been resting a lot today.  I need my voice to sing tomorrow and Christmas Eve.  So instead, I've been reading Gail Vaz-Oxlade's "Retirement Answer Book" .   It is full of such useful ideas I really want to read it with Paul.  I'm not sure he'll be interested.  But we'll see.  I'm learning lots myself. 

Her series "Till Debt Do Us Part" has been good for me.  All of a sudden finances don't seem so insurmountable.  There is a way to go about figuring things out.  I just have to do a bit of creative thinking on this subject.

So I spent yesterday afternoon re-organizing our financial files upstairs.  Paul commented "You change my tools shelves when I'm gone!  And now you change my financial files?!"  He was smiling though.  And he admitted later that the new filing system made more sense and was easier to use.  Truth be told, I change those things when I need to use them.  Paul is a very detail oriented man.  Some of his systems you have to read his mind to be able to use.  Of course, it's all perfectly logical to him...  I'm the systems person in the house.  If you need a system for something, I can set up, and love doing it! 

Today I printed off a listing of all our income and expenses for the last year.  I plan on going over some of it with Paul before the end of the year.  I just don't understand Quicken.  Maybe he can help.  If I'm going to try to track finances, I'm going to have to figure out how Quicken works.

I've also been using Gail's Interactive Budget to run various scenarios for the next five years.  It's motivated me to spend all this afternoon creating a curriculum vitae for the last 14 years of my stay-at-home-mom life.  Let me just say, after two pages of point form notes, that I apparently didn't stay home very much!  Now I'm in a flummox trying to remember where my earlier curriculum vitae got to.  I know I have a file of them somewhere...just where is a good question!

Tonight I may just have to get to that Christmas baking I've been meaning to do the last couple of days.  I'm hoping I'll have help.