If you’ve read, well, anything I’ve posted since last summer, you probably know that I live a little close to the bone by the middle-class standards I’m used to.
My regular monthly income is generally adequate to my regular monthly expenses and even most of my irregular expenses. It does not, however, leave much over for savings.
That’s where my windfall strategy comes in. I get two main kinds of windfalls: the Earned Income Tax Credit and three-paycheck months. The EITC is a doozy, and it came at a perfect time for me (February).
See, in January I was totally tapped out. I had taken money I didn’t really have yet, plus all the money I did have (Christmas money, December’s third paycheck, everything I could cadge from my HSA) and used it to pay off the divorce lawyer I had consulted. Nothing left, period, and with my monthly earnings so low, reaching a comfortable savings cushion felt very far away indeed. Then I found out the size of my tax refund.
Side note: I’m not sure “refund” is really an adequate word because it is money I did not pay. The EITC is really other people’s money, which makes it more like welfare. I am grateful to receive it, and look forward to paying my share in the future.
I did buy a few things, but my February income turned out to be totally adequate to cover my purchases, leaving my entire EITC available to create savings.
Step one was to budget for March. I have not been following the general financial principal that you should live off last month’s money. I have been living off the money I was earning in the present month, leaving me in the red until I received my support check and last paycheck. Not a pleasant feeling.
So first, I budgeted for March, generously–March’s rent, groceries, everything, and with some left over because I know I probably forgot some things. I was realistic but moderately ambitious; I said I would keep groceries under $300, for instance. I will see how much money I earn in March and that’s what I will budget to cover April.
That took a good chunk of it, but there was plenty left. So I earmarked about 1 months’ expenses as an emergency fund. This is my liquid emergency fund, the money I would use if my car broke down, for instance. More of a rainy-day fund, if you will.
There was still some left over. I earmarked $500 for travel, aspirationally. Some day, I’m going to Paris. Because February was a good month for me, I STILL had some left over, which I earmarked as “investment holding.” I used to have a Roth IRA. It all went into the house we bought in 2015.* I would like to open one again as soon as I have enough money ($3000) to buy into the Vanguard Total Stock Market Index.
*The house where my ex-husband lives with his new wife and stepchildren and my name on the mortgage. This is a sore point.
That will leave me with three potential sources of emergency money, in the order that I would most likely tap them:
- Cash (in my Ally savings account);
- HSA (for medical, sure, but since I pay for things like my $185 asthma medicine out of pocket normally, I could submit those receipts later if I was in a bind for some other reason);
- Roth IRA–you can withdraw the contributions at any time, so again, if I was in a bind I could do so, unless the market had tanked quite spectacularly.
With my savings pretty well covered, I felt comfortable increasing my HSA contribution for the year to $4000, which will put me well over the investment threshold (right now that money is not earning interest, but I’ll have some options once it tops $2100).
I feel good about where I am, savings-wise. It’s not exactly putting me on the fast track to retirement, but it’s adequate for my current standard of living. Which could use a little increase, to be frank, and feeling a little more secure in my savings makes me feel like I can afford, for instance, new mixing bowls, when the old ones start moving past “gross” and into “health code violation.”
How did your tax season shake out? If you got a refund, what did you do with it?
In January, I found out that I qualified for the Earned Income Tax Credit and would be getting a sizable tax refund. Now, most of that money is intended for saving, and I’ll write a separate blog post about that. But I did think, well, I’m getting a good amount of money back, I can loosen the purse strings just a touch. And I bought a few things I’d been wanting for a long time.
The great thing is, I have been getting so many hours at the library, I am in the black even without touching that windfall. The other great news, money-wise, is that our CICP (Colorado Indigent Care Program) came through. I am getting refunds for a lot of the money I paid for Big Brother’s November ER visit and won’t have to make any more payments. Instead of owing about $2200, our bill became $70.
We were back at the ER in February getting Little Brother’s forehead stitched up, but no big deal–again, we will owe just $70, if I’m not mistaken.
With no further ado, here’s how February looks
Returning things to Costco: $69.75
Library take-home pay: $2187.22
Subbing take-home pay: $44.06
Interest: 61 cents
Trivia writing: $95
Gift and travel money from Grandma FP: $125
Child and spousal support: $767
Medical reimbursement: $156.38 (more on this below)
Non-windfall income: $3443.01
Rent and included utilities: $1084.08
Household oddments: $9.54
Stop-payment check fee: $35 (my rental office lost my check and will take this off of next month)
YNAB renewal: $45
Groceries: $456.40 (Holy smokes! What happened here?!)
Car wash: $10
Kid allowance: $18
Walkie-talkie batteries: $4
Boy clothes: $91.38
Children’s museum membership: $117.25
After-school babysitting: $88
Kid health: $160.86 (about $125 of this has since been reimbursed)
Adult health: $38.87 (meds and a dentist copay)
Coffee shops and snacks: $30.98
Shoes and underwear: $293.81 (When I got my tax refund, I figured I could replace all 3 worn-out pairs of exercise shoes and stop wearing hand-me-down underwear.)
Year subscription to Washington Post online: $99 (I’ve been stealing their articles for like 10 years. Journalism costs money.)
Something from Target: $14.04
A non-leaking, non-disgusting travel mug: $2 (plus reward points)
Southwest credit card fee for a bunch of bonus miles: $99
Total spending: $2907.70
I can’t count on always getting so many hours–I still need a full-time job. And over the summer, I will probably either have child care costs or way less income, so I need to be prepared for a few lean months.
But I feel great about February. I earned enough money. I spent some money on things that are important to me. I came out ahead, and I used a windfall to bolster my savings.
This post contains affiliate links for your researching convenience. As always, my opinions are my own.
I’ve made a couple of repairs to our wardrobes lately… and “noped” out of some others. For all, I have made do with supplies on hand. Here’s how it looks.
1 school uniform shirt (not pictured)
Don’t get me started on the uniforms. Shirts are $10 apiece(!) for a school that is ninety-percent-plus free and reduced lunch (yes, my kids, too) stain easily, and often wear out in a single school year. And this year the sizes changed and Little Brother will wear only last year’s grubby shirts because the new ones are too big.
Anyway, within the first two weeks of school, the seam under Big Brother’s armpit gave way in one of the new shirts. Stitched it up with needle and thread, by hand.
1 Goodwill sweater
I like this sweater, which is Loft brand and was $5 in excellent condition (thanks, Grandma FP). The underarm seam started to give way. I didn’t have any yarn-type thread, so I just used a double strand of regular thread. I didn’t have yellow so I just used white and tried to keep all the stitches on the inside. So far, the results are satisfactory, although the repair is visible from the outside if you look really closely. (Fortunately, people rarely shove their heads under my arms.) When I buy sweaters new, I generally do a pretty good job of keeping track of the repair thread, but this was from Goodwill, so no such luck.
I do not own a lot of bras so I was dismayed when I went to put this one on and felt a pop in the back. The little slider that adjusts the straps had broken.
Fortunately, I already had a set of lingerie repair doodads (Dritz Lingerie Strap Slides & Rings, if you want to get fancy–I probably bought them at Joann or Walmart) from a dress I had repaired and even had the right color.
Unfortunately, I got confused and snipped off the strap that was NOT broken. So I had to re-sew both sides. I sewed by hand while watching TV using a thimble that came in one of those hotel sewing kits–you have to push hard to get through multiple strap layers.
Nope, not worth it: Old Navy pants
Both boys had these Old Navy cargo pants for school. They were on sale and I thought they were cute. Unfortunately, the fabric is thin and wears through quickly. Also, the narrow legs and knee gussets make repair challenging. While I have a package of iron-on patches, they tend to peel and I like to machine-sew them in place. Machine sewing also helps the patch adhere to the ripped area.
I tried to keep these going, I really did. But patch after patch after patch… No. It looks dreadful and is a ton of work. You can see below how the patches are a mess inside, layered on top of each other, and visible from the outside, and then new holes are showing. I was going to the half-price day of a semiannual consignment sale event and just got LB some replacement pants for a couple bucks each.
I am hoping that Costco will get in a new shipment of their French Toast uniform pants in the fall. These are nice thick fabric. I had bought maybe 7 pairs altogether for Big Brother at $10 each. Only one pair has ripped, and Costco gave my money back. LB was too small for them this year as the smallest size they had was 5, but by fall, he should be able to wear them. At least in a “to grow into” kind of way.
What are you mending lately?
I participated in an Uber Frugal Month Challenge this month, but my normal spending is so low, it made little difference. Actually I had a lot of nonrecurring expenses and my spending was, for me, wildly high.
In fact, according to YNAB, I am now entirely out of money and then some. I don’t mean that I spent more than I made. I mean I spent more than I have.
I only know this because YNAB told me. See, I still have lots of money in my checking account. I just don’t have enough to simultaneously pay all my credit cards down to 0. I am reasonably optimistic that I will be able to pay them by the end of the month; if not, I will carry a balance on my lowest-rate card.
What happened? Well, I paid off my lawyer. They sent a bill for $4400. I said, “Didn’t you say there was a discount if I paid in full?” They said, “Do you have three thousand? We take Visa and Mastercard.” I could carry that bill on my MasterCard for a long time before the eleven-point-something-percent interest would come anywhere near the $1400 discount, but I do not expect to carry it long at all.
My car also cost me more than usual this month. Read on for the full breakdown.
FSA reimbursement: $240
Wages: $1224.92 (Low because of not picking up extra hours around the holidays)
Cash gift: $20
Trivia earnings: $70
Money I raided from my HSA: $1203.91 (I submitted medical bills that I had long since paid out of pocket to access funds to pay my lawyer with)
Total income: $3508.48
Rent and included utilities: $1070.77
XCel (electric): $25.41
ATM fees: $6.99 (reimbursed by my credit union next month)
Legal bill, blog hosting, a few other things: $3048.50
Groceries: $360.85 (OUCH! But includes $55 Costco renewal.)
Auto maintenance: $96.87 (I now own a charger capable of starting a car without another car. Y’know, in case your kids leave the dome light on and your battery runs dead and you are blocked in by other cars and have to walk to AutoZone in the snow to buy something to solve this problem.)
Annual vehicle tax/registration: $145.64
Boys’ allowance: $5.46 (I appear to have shorted them)
Boys’ clothes: $12 (winter gloves for Big Brother)
Daycare: $247 (I had to buy a daycare package to use up FSA dollars)
Boys’ health and dental: $168.61 (still paying off Big Brother’s tongue)
Restaurants: $33.46 (includes 1 special occasion lunch and Big Brother’s birthday dinner at Chipotle)
Coffee shops and snacks: $27.19 (OK, OK, maybe not uber-frugal, but includes some lovely social outings)
Clothes for me: $67.51 (needed black pants to wear for subbing and a thing to keep my ears warm)
Kindle book not available at library: $3.22
Birthday presents for Big Brother: $30.99 (also used credit card points)
Used cell phone and accessories: $135.16 (Yes, I just repaired the old one, and it broke again, and sometimes that’s how it goes. Got a Galaxy S5 from Craigslist for $110.)
Travel: $136.62 (Includes ticket to Las Vegas for May and Lyft home from airport)
Total Spending: $5772.26
Well, of course that sucks. No one likes to come up that short. But let’s look on the bright side: I was able to pay a three thousand dollar bill almost completely out of savings. Yes, I am now quite tapped out and have exhausted resources that I can’t use again this year (like my HSA), but how many people can’t cover that kind of bill at all? Because I had money from last month budgeted for the legal bill, the actual shortfall was $250.08. That’s how much more I spent than my liquid resources.
Other reasons for optimism: I have been working like a crazy woman this month, getting lots of library hours, and should get good paychecks in February. AND I have applied for a program (CICP, Colorado Indigent Care Program) that would reduce Big Brother’s hospital bill. I should qualify, so fingers crossed.
I’ve been reading this book The Unbanking of America: How the New Middle Class Survives. While the point is to learn more about poverty and middle-class financial insecurity, I’m also finding that it makes me, well, feel pretty good about myself. Sometimes I have savings! I understand my bank account and never accrue fees! That already puts me way above average. Seems like I should be able to hang in there for a while longer.
How was your January?
Well, I’m a little behind the eight-ball analyzing my spending. Took a while to recover from my Christmas trip home.
Let’s take a look.
Support : $690.67
Library take-home pay: $2797.85! Holy cow! That’s 3 paychecks plus a wellness bonus.
Substitute teaching take-home pay: $215.64
Trivia pay: $70
HSA reimbursement: $595.09
Christmas money: $550
Total money in: $4919.70
Rent and co-billed utilities: $1050.97
Renter’s insurance (quarterly): $33.50
Xcel (electric): $22.31
Cell phone repair: $86.18 (Plus parts–see below. I, uh, smashed it, and also it needed new prongs in the part where you plug it in. Now my Galaxy S3 is running great again. Total repair cost was about a hundred.)
Groceries: $187.99 (Low because we traveled at the end of the month)
Auto maintenance: $274.15 (My
#$@&%*!? windshield cracked. Also snow tire installation and a wash.)
6-month Geico bill: $489.42 (I have full coverage for my “fancy” car)
Miscellaneous kids: $29.92 (includes their allowances and a birthday party gift)
Kid clothes and shoes: $23.34
Kid health: $95.69 (Just the tip of the iceberg. This is a payment on a $547 chunk of bill and we got another from the hospital for $1500.)
Coffee shops and snacks: $12.12
“Out” entertainment: $45 (Did one of things where you drink wine and paint)
Frippery: $59 (haircut and razor cartridges)
Adult clothes: $26.44
Christmas presents and general festivity: $355.02
Miscellaneous shopping: $19.87 (About $15 was a new battery and screen protector for my phone.)
Uber to airport: $29.92
Salvation Army kettle: $2
Cat food: $26.90
Total money out: $3066.66
Well, it’s certainly nice to have money left over. But it seems to me that all the surplus came from extra money, so I still have a ways to go to be living comfortably within my means. January will be tight. I will have no subbing check at all (the sub paycheck runs from the middle of one month to the middle of the next, and winter break means I didn’t sub) and not all that extra money. I’ll have to hope I don’t have any “oopses” this month–if I can keep from smashing from cell phone, cracking my windshield, or letter either of my kids injure themselves, it might turn out okay.
I had intended to spend some of the Christmas money on “stuff.” But then I realized I was actually pretty close to being able to pay off my lawyer, so I just earmarked the entire overage for my “professional services” category in YNAB. I will liberate some more money from my HSA (by submitting receipts I already paid for) and set that aside for the bill as well. I have no emergency fund.
Bottom line: I got a little breathing room this month, but I’m going to be skating on thin ice until I get a full-time job.
This is a roundup of various success and failures I’ve had at home this month.
I went to open my bottom drawer and this happened.
Then I pulled it out, removed the clothes, and foolishly left it lying on the floor. Little Brother tripped over it and then it was in five pieces.
Now, it seems like this should have been an easy fix. Spread wood glue on pieces, reattach. But after I put on the wood glue, I had trouble getting the pieces to line up properly. They didn’t go back tightly enough and the drawer would not fit in the space. It stuck out halfway. Aaaand now the glue had dried and it was fixed in that shape,
Now, at this point more than one person suggested I should abandon the project. But I like that dresser. It is old and sturdy and fits the space well. Taller and the TV would be too high. Shorter and there would not be enough room for my clothes. Wider and there would not be enough room for the Christmas tree. Plus, it was already there and I didn’t want to devote hours of my life to selecting and purchasing a replacement and reorganizing my clothes.
So I turned once again to sfgate’s home guides. I ordered a package of glue syringes (specifically, Big Horn Glue Injector Kit, from Amazon)–who knew there was such a thing? They come empty. I used one to precisely squirt white vinegar at the glue joints so they would come apart. With ten or fifteen minutes of soaking, a little tugging and a little poking with a flat-head screwdriver, this was effective. I had 5 pieces again. (The directions I looked at called for drilling into the glue, but I did not find this step necessary.)
This time, I tested the fit before gluing. Then I used another of the syringes to sort of shoot glue into the joints with the drawer already assembled. I don’t know if it’s enough glue for the long term but it is holding for now. It fits into the space more tightly than before, but it does fit.
I am not sure why I thought a gathered skirt would look good. Because the instructions I was using (from Love at First Stitch: Demystifying Dressmaking) involved some things that were new to me, I made a sample first out of a curtain I bought at Goodwill. I did everything carefully both to practice my skills and because I thought it might come out wearable. I made and learned from a wide variety of errors while doing this, so that’s good. See below how dreadful I still am at attempting to finish a fabric edge by zigzag stitching, and see also where I managed to sew a zipper inside the waistband.
(Side note: A more experienced sewist told me that Tilly’s patterns are basically garbage anyway. I am not sufficiently knowledgeably myself to verify this.)
But once I had it all put together except the hem, I decided it was hideous and abandoned the project. I will find something else to do with the “real” fabric. Sunk costs: Less than five dollars and many skills learned.
I Made a Chalkboard
When we were married in 2001, the XFP’s stepmother made us a commemorative counted cross-stitch. She seemed like a nice lady (we met her only that once) and it was rather attractive as counted cross-stitch goes, and we dutifully hung it in our bedroom for 15 years.
I had been wanting to make a chalkboard from an old frame ever since I read about it in the Frugal Girl. So, no longer desiring a commemorative cross-stitch from my wedding, I disassembled the whole thing, removed and cleaned the glass, and painted it with chalkboard paint that I bought at Hobby Lobby. Glass chalkboard paint turns out to be kind of a pain to use as it had to set for four days(!), then be baked in the oven to finish. But eventually it was done.
I use it as a menu board. You may notice that Saturday has only an activity listed (who cares what’s for dinner? POPCORN NIGHT!) and Sunday was blank. It is not perfect. But I can talk to the boys while I fill it out about what our week will be like and when they will be at Daddy’s house, so it adds some nice predictability. The paint was about $4 and I have enough to do a little more glass if I wanted to.
The mistake I made was trying to use a regular sponge. The directions said to use a cosmetic sponge. I didn’t have any, so I tried using a kitchen sponge, which made for a very striated first coat. For the second coat, I used a foam paintbrush, which worked much better. In fact, it was a TOY foam paintbrush stolen from the children. I am not wild about the rippled texture but it doesn’t seem to do any harm. I am in general pleased with this project and I like the nice bright markers (which were about $5). Some people complain that chalk markers don’t erase well, but I am not having that problem so far.
What projects have you been working on lately? What are the results?
I’ll tell you up front that I ran a deficit in November. Happily, I was able to cover the shortfall with savings and anticipate a rosier December. Here’s how it broke down:
Support, minus my share of utilities for old house: $634.29 (this number excludes $183 that went to the XFP’s share of kid spending, which I do not count as either income or expense)
Library take-home pay: $1338.69
Substitute teaching take-home pay: $254.68
Christmas money: $200
Selling snow tires on Craigslist: $100
Total income: $2527.66
Home supplies and furnishings: $158.47 (includes an electric blanket for me, counter stools from Craigslist, and a variety of miscellany)
Laundry: $45 (still have several loads left on the card)
Bike supplies: $25.97 (I keep bleeding on this category! This is new tubes for me–3 for the price of 2–and lights for Big Brother’s bike, minus some Amazon credit I had lying around)
Car things: $1072.90 (Junkyard OEM wheels to put my snow tires on, plus I went $700 over my budget from the Frugal Patriarch)
XCel Energy: $17.45 (includes start-up charge)
Internet: $9.95 (OK, it’s slow and not that reliable, but I LOVE charity internet!)
Annual life insurance bill: $116 for $100K coverage
Groceries: $221.26 (Finally some improvement in that category!)
Gas: $62.65 (Because I absent-mindedly put a full tank of gas in my car right before I traded it in!)
Boys’ allowance: $9
Work childcare: $8
Kids’ health: $175 (That’s half of a $250 ER copay plus half of $100 in babysitting for the lady who came to pick up Little Brother while Big Brother and I stayed there until 2 AM. BB’s tongue is all better now but it sure was grueling. I expect a bigger bill later.)
Coffee shops: $17.18 ($13 below my average! Look at me showing some restraint!)
Sewing supplies: $17.44
Artificial Christmas tree: $39.14
Miscellany at Target: $16.48
Annual rec center membership: $221.40 (WOW that’s a good deal!)
Shredding at Office Depot: $2.97
(Note that the figures above do not include the ten thousand dollar gift which which I paid for almost all of my new car.)
Well, that’s a little alarming, a deficit of over eight hundred dollars. I had to just about drain all my savings categories. Obviously, having large car expenses was a major causative factor there. My earning power was limited by last month’s fall break (couldn’t sub) and a variety of ill-timed illnesses that fell on days I normally would have subbed or done on-call. I have sick leave at my regular job, but that wasn’t what I was missing. Ouch.
Fortunately, December is a three-paycheck month and the month in which I get my wellness bonus from my employer, so hopefully if I get my average hours-per-up before Christmas, I will be able to put on Christmas and still wind up in the black. And there are things I could have not skipped buying in November had I realized how short I was going to fall, so I think I’ll try more of a zero-based budget throughout the month. There is cause for caution, but not panic.
How was your November?
This post contains affiliate links. I checked out the book referenced from my local library.
The only way to learn how to manage money is to have some money to manage. That’s why my boys, who are now four and five, get an allowance (two dollars per week).
(While I certainly do not embrace Dave Ramsey wholeheartedly, I got some good ideas about managing allowances with kids from his book Smart Money Smart Kids. In my house, the connection between chores and allowance is looser, but hopefully enough that the boys get the idea that money comes from work..)
As a general rule, they waste it. That’s how they learn, I suppose. It does bother me when their spending creates waste, as when they buy junky little toys that break, so I often try to create learning opportunities involve them purchasing their own consumables (markers, tape, construction paper, bubble liquid–things with which they tend to be profligate). The past couple of weeks, we have come across a couple of excellent non-wasteful learning opportunities for little tykes and their money.
Or as Little Brother calls them, “Smith stores.” I popped into a large one recommended by
the XFP with quite a list of things I wanted for the kids and my new apartment, from “stock pot” and “ice bin” to “snow pants.” (All of which I found.)
It was allowance day and the boys went two different directions with their money. Little Brother bought one thing, a stuffed turkey from the Thanksgiving section. I think it’s meant to be a decoration, but he sleeps with it and kisses it and whatnot. He seems pretty satisfied with his purchase.
Big Brother bought a pre-assembled bag of Halloween nonsense, tiny decorations and party favors and whatnot. Well, at least it’s all pre-owned junk instead of new manufacturing. He managed to break one of the items before we even got home and hasn’t used or played with any of it. There’s a lesson for him here, although I suspect it won’t sink in for quite a while.
The Fall Festival
Their school had a PTO fundraiser. For a dollar, you could get four tickets and then use them to buy things like a turn in a bounce castle (two tickets) all the way up to a pumpkin you could paint (ten tickets).
I bought each boy 12 tickets, using their two dollar allowance for that week plus one extra dollar. Big Brother immediately ruled out pumpkin painting as too expensive and went straight to the low-cost bounce houses. He spent his tickets on the two bounce houses plus a trip through the Haunted House (eight tickets). Now, here I was stumped. See, Little Brother had spent five tickets on a balloon flower and did not have enough money left for the Haunted House, but Big Brother wouldn’t go through alone and I could hardly leave a four-year-old standing outside by himself. So I bought Little Brother some more tickets, figuring that Big Brother was of a better age to understand budgeting anyway. Actually “grace” is one thing Dave Ramsey talks about in the book; he advocates having your kids’ back sometimes (obviously not always, because then they would not learn that money is finite, but once in a while like this).
They were, unsurprisingly, terrified by the Haunted House. As we walked to the car, Big Brother said that next year, he would rather paint a pumpkin. He was reflecting on his spending choices and thinking about to extract more happiness per dollar–I’d call that a win for a five-year-old any day!
How do you teach your kids about money?