Tuesday, January 29, 2013

Budget Budgeting

I know, you've been dying to know how I budget. OK maybe not. My budgeting process may seem ridiculously complex to some, and ridiculously simple to others. I aim for simplicity, but it may not seem that way.


Open Source Spreadsheet and Accounting Software 
My tools consist of a spreadsheet and an accounting program. Last year, I blogged about why I ditched Windows for Linux. Consequently, I use open source software mainly because it's free. For my office suite, I use LibreOffice. For my home accounting, I use GnuCash. Both of these are available for Mac and Windows users. You can download these and other open source software from SourceForge. In some instances, the non-free versions of this software (i.e. MS Office) may be prettier, but it's not worth the price tag, IMO. It's true that I did have to relearn new software and that did take some time and patience. The open source version suits my needs and it may suit yours. Take whatever precautions you take when downloading software. Or, take these concepts and use what you've already got.


1. Create a Budget Spreadsheet: Itemize Income and Expenses
I use the open source LibreOffice Calc spreadsheet (part of the LibreOffice suite) to itemize my spending. Every year, I create a budget spreadsheet listing income and expenses for each month of the year because sometimes expenses or income change. Obviously, if you have dual incomes, you'll have to add columns for the other earner's paychecks and decide which bills you want to pay with which paycheck. This example assumes a one-income household that gets paid twice a month. Please note that the examples I give are not my family's real budget. I have decided not to put my business out there because...it's my business. But, I'm happy to share my budgeting process with you.

You must list all of your expenses including those that you pay weekly,  monthly, quarterly, or annually. For example, you may pay your mortgage monthly, but your homeowner's insurance is paid annually. Here is how I figure out how much to set aside per paycheck:

Monthly expenses
If your monthly mortgage is $1600 then divide this number by how often you get paid per month. This is what you will set aside per paycheck. This example assumes you get paid twice a month:

                                  $1600/2 = $800 per paycheck 

Annual expenses
If your annual homeowner's insurance is $670 then divide this number by 12. This is how much you must set aside each month. Now divide this number by how often you get paid per month. This is what you will set aside per paycheck. This example assumes you get paid twice a month:

                                 $670/12 = $55.83 each month
                                 $55.83/2 = $27.92 per paycheck

2. Create Accounts and Sub-Accounts in Accounting Program
I use the open source accounting program, GnuCash. In this program, I set up a basic checking account, a savings account, and our two credit card accounts. I don't track investment savings - I'm more concerned with household budgeting. (Note: The picture shows a negative balance for an Imbalance account because I have not categorized my spending for this example. I don't even do this on my version. I have a bad habit of ignoring things that I don't think pertain to me. You can ignore this.)

Under Savings Account, I have sub-accounts for each of the items in the spreadsheet. Note that all of the money is still in the parent Savings Account. These sub-accounts only exist in my accounting program, not in my actual bank account. When I log on to my bank's online banking, I see only the balances for my checking account and my savings account. I have added sub-accounts to my accounting program because they allow me to allocate money toward each individual expense.

3. Post Date Transactions that are Auto Deducted from Checking Account
The exceptions to this are those items that are automatically deducted from my checking account, such as auto insurance and life insurance. I leave that money in my checking account and post date those transactions with the date that they will be deducted. For example, my auto insurance is deducted from my checking account on the 10th of every month. Even though it's still January, I have dated this entry to be 2/10/13. This reminds me that the money is already accounted for and can't be spent. I always deal with these items first.

4. Transfer Money to Sub-Accounts
After accounting for auto-deducted transactions in my checking account, whatever money is leftover from the paycheck is transferred to my savings account. Don't forget to transfer the money from your checking account to your savings account via online banking or ATM and record this transaction in your accounting program. You may choose to keep everything in your checking account. That's fine. You can create sub-accounts under the parent Checking account. I like to have my money for bills in my Savings account because it's less likely to get spent. Looking at my spreadsheet, I begin the process of transferring money from the parent Savings Account to each of the sub-accounts. I even have sub-accounts for my credit cards: American Express and Visa. Let's say I use my American Express to buy a $10 lunch. I can move $10 from the Entertainment/Dining sub-account to the AmEx sub-account. 

5. Pay Bills
When it's time to pay bills, I move the money from the sub-account back to the Checking Account. Again, don't forget to transfer money between your accounts via online banking or ATM.

The most time-consuming portion of this whole process is the initial set-up. I hate to say it, but sometimes doing the prep work is more work than the actual work. ☺ Once this is set up, it's easy to maintain. It may sound complicated, but really, it's only a spreadsheet with your budget and an accounting program with all of your account information. You probably have these already. It's been a long time since I've used Quicken, but I think it uses Savings Goals, which is a similar concept that you can use to your advantage. The year is still new, so you have plenty of time to rework your budget. Just the sort of thing you can do on a cold, rainy weekend. Happy budgeting!

Wednesday, January 23, 2013

Daytripping: Lake Tahoe in Winter

Sunday was a beautiful winter day, so we decided to take the boys to the snow after church. Just as we were nearing our favorite sledding spot I said, "Why don't we continue on to Tahoe?" I had never been to Lake Tahoe in the winter. Since none of us ski, it never really seemed like a necessity to brave the icy roads and the hordes of skiers. But Sunday felt different; it was sunny and beautiful with no hint of foul weather. We drove to our usual park/beach, Commons Beach, and immediately we knew we made the right decision.

A blanket of snow covered the beach, and when set against the blue lake and the blue sky it made for a stunning picture. Much of the cobblestone sidewalk had been cleared of snow, and there were several park benches that were also clear. The playground area was surrounded with snow, but that didn't stop a few toddlers from playing. My husband made a snowman on the beach, while my oldest son traipsed across the snowy beach looking for who knows what while dragging his yellow sled behind him. My youngest son has always been apprehensive about the snow...to put it mildly. The park bench provided a safe haven for him. Meanwhile, all he had to do was reach across the sidewalk to touch the snow if he so desired.

On our way back home, we stopped at the Village at Squaw Valley just to walk around and grab an afternoon snack. It goes without saying that there were alot of skiers. Naturally, many of the restaurants seemed to cater to the young and hip skiers (read: pizza/beer/wine restaurants). We weren't looking for a full meal, just a quick pick-me-up snack. There was a Starbuck's, but we wanted to see if there was something more, how should I put this...original. I'm not against Starbuck's, but I'm making it a point to try out local and/or mom and pop shops. We found it in the form of Batch Cupcakery. Fabulous cupcakes, is all I have to say.

All in all, a fabulous day. We missed the Niners game, but then we don't have tv anyway. I'm told that they're headed for the Superbowl. Cool. But even cooler, I got to spend a winter day with my family in one of California's most beautiful spots.

Wednesday, January 16, 2013

Stepping Up and Stepping Out

Many, many years ago when I was a senior in high school, I got a part in the school's spring production of You Can't Take it With You. I'll let you follow the link to Wikipedia for the synopsis. (I played Penelope, BTW.) Ever since then, the phrase "you can't take it with you" has stuck with me although it's taken a while to let it soak in. When it's time for me to leave this earth and enter into eternity, I won't be able to take anything with me. This means that my time, talent, and treasure are all temporary things and it does me no good whatsoever to hoard them. So, why not share them? I'm glad you asked.

I'm a Star Trek fan because I love the fact that in the Star Trek universe, the people of Earth have finally united and have worked together to eliminate poverty and disease. I know, it gives me a warm fuzzy feeling, too. Although I love the idea of eliminating poverty, I realize that I've never done anything to work toward that objective because it seemed so daunting...until now.

Last year, my husband and I decided to step up and step out in faith and sponsor two children through Compassion International: a little girl in Kenya and a little girl in Bolivia. A month after sponsoring these two girls, we decided to sponsor one more: a girl in Indonesia. I've always been skeptical about child sponsorship programs, but last year Wess Stafford, the president of Compassion International, spoke at our church. It was a moving speech. I had checked out Compassion before and they are highly rated at Charity Navigator. That's important to me. I realized that I could go on being skeptical - doing nothing to alleviate poverty - or, I could step out in faith to make a difference, if only in the life of one person. Eight months later, I haven't regretted it. I write to the girls in Kenya and Indonesia since I signed up to sponsor them; my husband writes to the girl in Bolivia since he sponsored her. It has been an eye-opening and joyful experience. The photo above is of some artwork that my little girl in Indonesia was able to send to me.

I encourage you to find your own way of sharing your time, talent, and treasure. Perhaps, like me, you are intrigued but skeptical of sponsoring a child. I totally understand. Head on over to Charity Navigator and do some research. I firmly believe that when we give of ourselves and share with others, we receive so much more in return. Remember: you can't take it with you.

“Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also." ~Matthew 6:19-21

Thursday, January 3, 2013

Technically I'm Not a Mrs.

My husband and I have been married for 21 ½ years. We'll be celebrating our 22nd anniversary this June. For various and sundry reasons that would have involved a paperwork nightmare, I did not change my name when we married. I also happened to like my name, so I was fine about not changing it. Since my husband is fairly easy-going, he didn't seem to mind one way or the other. My last name begins with R. My husband's last name begins with H. Sometimes I'm addressed as Mrs. H, usually by the neighborhood kids; sometimes Mrs. R, usually by people who know me but not my husband. And what about the children? They have my husband's last name. I still have mine. It's never been an issue.

Most of the time, I don't even think about the name difference. Occasionally, I'm reminded that I'm still in the minority of women who kept their names after marriage...like when I'm on Facebook and I'm looking at my friends' names. Besides me, only two of my friends who are married have kept their own names. Some of my friends are listed as Firstname Maidenname because they are divorced or they never married. Some friends are listed as Firstname Maidenname Marriedname. And some are listed as Firstname Marriedname.

The only time it ever truly bothered me to have my first name paired with my husband's last name was when our insurance company decided to change it for me. For reasons I can't remember, we decided to combine our auto insurance policies by adding him onto mine after we married. The following month our bill was addressed as Hisname and Myname Hislastname, complete with new insurance cards with my "new name". This was problematic for me because legally I was not CH; I was CR. My driver's license was still CR and my auto loan was still in my name. Furthermore, I had not asked them to change my name. They automatically did it for me.

When I called the office to make the correction, the agent's admin just couldn't understand why I didn't change my last name and she wasn't sure if the database could accommodate this request. (This was the pre-Internet stone age of 1991.) Oh hell no. Funny how people react when other people go against the grain and don't do what they think is right. So I wrote a flaming nastygram to the corporate office excoriating their company for imposing their patriarchal attitudes onto me, a paying customer, and reminding them that legally only I could change my name and if this wasn't fixed then the next letter would be from my lawyer....blah blah blah. Never mind that I didn't have a lawyer. ☺ Lo and behold, the next month it was fixed. Imagine that. We've had no problems since.

While I won't go so far as to say that I'm an easy-going person, I really don't care what other women (or men, for that matter) do with their names after they marry. Seriously. I.don't.care. Whatever floats your boat. It's the 21st century, so do what you want. The only judgmental opinion I have on the matter is this: if you think all women should change their names or that all women should keep their maiden names after marriage, then you have control issues and you need to lighten up or seek professional help. I realize that for some women it can be an emotional decision. For me it wasn't. In my opinion, changing your name like deciding to marry, should not be done lightly but rather with careful thought and consideration.


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