Budget billing: it works for us

                             

We signed up for budget billing with our electric company a good number of years back and that is our sole experience with budget billing. 

I like it so much better this way because you are sent the same payment each month.  How does it work?  Well for us, the electric company sends us an averaged payment each month based on past bill amounts.  We know that our payment stays the same every month.  It’s the same during the summer months as it is during the winter months.

Now that being said.  That is not always the case.  If we go above our normal energy use for several months in a row, then somewhere down the road the electric company will charge us a higher payment.  That has happened before during the hottest months of the year and of course, our energy use climbed higher.  So then the electric company accounted for the energy use and thus, adjusted the payment to a slightly higher one.

I was able to get my averaged payment down once before.  I attempted to cut my energy bill by NOT using the dryer during the summer months.  I found out that I could save about twenty dollars a month on electricity by hanging my clothes outside to dry versus using the dryer.  So my average payment dropped considerably for so many months until I couldn’t keep up the effort.

Our payment for electricity this month is $98.00.  And it has been this amount for many months now. As you can see in the picture, that we actually used more energy this month.  In dollar terms, we went over the $98.00 budgeted bill amount.  So hopefully, we can get our energy use down so the payment will not increase. 

I am interested in hearing if anyone has been able to decrease their budgeted payment on electricity.  Tell us how you did it!! Or maybe you have experience with budget billing with a company other than an electric company. We would love to hear from you as well.

For more Frugal Friday tips, please visit Biblicalwomanhood.

Charlotte

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Not knowing your financial picture before marriage

Well, let me tell you our story.

How naive we were to enter into marriage without discussing what our financial picture would look like in the coming months.  I really had no idea of the kind of debt or bills that Mike had.  And vice versa, he wasn’t real aware of the monthly payments on the bills that I had.

Yes, there was credit card and student loan debt, of which, I carried most of that debt. AND I was barely making ends meet before marriage.

Mind you, I also had to quit my position so that I could move into our new home that was in a nearby town. So I didn’t have a steady job.  I was temping at the time.

I had this idealistic picture that once Mike and I were married, I would be in a better financial shape than before because there were going to be two working people with two incomes. Yeah, right!!

Well the bills began to roll in. And just as you can imagine, it was financially a tight squeeze.  We ended up being late on some bills. And at times late more than I would care to say. And to add insult to injury, we were charged late fees which caused more frustration. I remember thinking to myself where will the money come from when we need clothes and so forth.

Well what is the moral to this story?  I think that it would have been better to have discussed our financial situation before marriage.  Why?  So we would have known our true financial picture and would have been more prepared for the coming months. There are so many things that we might have done better.  But I think for the most part, it’s wise to know your overall financial picture and make some decisions based on that picture.  

Upcoming:  Before marriage- how Dana and her husband’s story is different than my post

Charlotte

Dave Ramsey Sale!

ONLY IF YOU HAVE CASH AND IT IS IN THE BUDGET, should you go to this site::

Dave Ramsey is having a $10 sale through Labor Day on many of his resources such as books and audios.  I read his book, Financial Peace, over 10 years ago and still recommend it.  Check it out!

Debt! Debt! Debt!

I’ve read several articles and books on how much debt is acceptable.  Some state that debt should be no more than 5% of your income; others state you should not have debt at all.  There may be times when you feel you must go into debt in order to better your life such as a school loan.  Remember though…

The rich rule over the poor and the borrower is servant to the lender. 
Proverbs 22:7

If you owe a car loan to Bank of America, then you are a servant to Bank of America.  If you thought you really needed that treadmill and completed a loan through Sears because you didn’t have the cash, then you are a servant to Sears.   

Debt will play a part in decisions you make.  It can prevent you from spending time with your children because you are working extra hours.  It can cause stress and arguments with your spouse when you realize you can’t afford to pay a babysitter and go on a date BECAUSE you have that credit card payment to make. 

DEBT EXAMPLES:  car loans, credit card, second mortgage, school loan, loan from family, “no payments until 2009” furniture loans, car title loan, pawn shop loan

I challenge you to get out of debt.  If a store offers you no payments until 2010, RUN!  You may have to thrown a blanket over the old couch you were looking to replace but if you have no cash…do you really want to be a servant to Rooms To Go?
Thanks for listening!  Dana

p.s.  Mortgage loans are also considered debt but I’ll address smart ways of having that loan in a later post.

Joint versus Separate Accounts

There are married couples who have separate savings and checking accounts.  Though I will argue that having joint accounts is best for several reasons.  

At the get go of our marriage, Mike and I have always had joint accounts for our money. Having separate accounts really never crossed my mind and even now really isn’t an option for us.  Here’s why………

1)  Builds accountability. We have set up rules with our finances.  I always let Mike know when I withdraw money from the accounts (because he keeps the books) or we have a discussion first about any big ticket items. One of our financial goals is to get out of debt so we hold each other accountable by discussing purchases so that we don’t go into debt to pay for them.

2) Establishes trust.  I trust my husband and he trusts me.  We are honest to one another and do not make any decisions without the other’s acknowledgment.   

3)Gives a clearer financial picture.  We know what the bank accounts look like and what our expenses look like. This helps in obtaining any financial goals. Joint accounts allow us to work together to meet those financial goals.

4) Fosters a mutual belief that God owns everything. My husband and I believe that God does own everything and that we are just stewards of what he has given us.  We operate together under this principle and try to honor our Lord with our finances. 

Well what does the Bible say in reference to this subject?  Well, this is the verse that keeps popping up in my mind.  Matthew 12:15…………..A house divided against itself shall not stand.  I just think that having separate accounts can lead down the road of division.  And a house divided will fall.

Separate accounts can foster distrust, suspicion, dishonesty, and resentment. It also can foster an attitude of selfishness and quite frankly a host of other problems.

Charlotte

Expense Categories

Here’s two examples of categorizing your expenses.  Since using Quicken, I have a Main Category and Sub Categories.  So my Dining Out category has sub-categories (lunch, dinner, coffee). This helped clarify which meal time we spent the most on.  Since my husband loves coffee, we were also able to tell how much a month he was spending specifically on coffee.  The important thing when creating your categories is coming up with the order or grouping that best suits your life.  Instead of using the words “dining out”, you may prefer “eating out”.  We have a budget for purchasing books, so it’s important for us to track how much we spend on books.  You may never buy books but spend a lot on knitting, in which you really need a separate category instead of grouping it with something else.  If your categories match your life, you have a accurate picture of where your money is spent.

  • Auto – insurance, fuel, loan, service
  • Children – sports, college, education supplies, toys
  • Bank/Finance  Charges
  • Cell Phone
  • Childcare
  • Clothing – shoes, accessories, dry cleaning
  • Dining Out
  • Debt – credit card, student loan
  • Donations – church, ministries, other
  • Entertainment – camping, golf, movies, parks
  • Gifts Given – birthdays, Christmas, other
  • Groceries – food, paper products, cleaners, toiletries
  • Haircuts
  • Hobby – photography, scrap booking, knitting, gym membership
  • House – furniture, mortgage, improvements, pest control, garden, power washing
  • Life Insurance
  • Material Things – magazine subscriptions, books, music, décor
  • Medical – dentist, eye dr., yearly checkups, prescription medicine
  • Office – postage, printer supplies, computer supplies, internet svc
  • Pets – shots and food
  • Telephone – including long distance
  • Utilities – electric, gas, trash pickup, water, cable
  • Auto – insurance, fuel, service
  • Clothing/Health – shoes, accessories, dry cleaning for adults/parents, haircuts, toiletries, gym membership
  • Debt – credit card, student loan, car loan, bank and credit card finance charges
  • Donations – church, ministries, other
  • Recreation – dining out, camping, golf, movies, parks
  • Gifts Given – birthdays, Christmas, other
  • Groceries – food, paper products, cleaners
  • House – utilities (elec/gas/phone/cable/internet), furniture, décor, linens, mortgage, improvements, pest control, garden, power washing, lawn mower, repairs
  • Medical/Life – insurance, dentist, eye dr., yearly checkups, prescription medicine
  • Office/Hobby – postage, printer supplies, computer supplies, scrap booking, knitting, books, music
  • Investments/Savings
  • Education/Travel

“If a person gets his attitude toward money straight, it will straighten out almost every other area in his life.” Billy Graham

No Technology Finance Managing

A conversation with a blog visitor helped remind me that not all people track their expenses using a computer or finance program.  I’ve used Quicken for over 12 years to help manage our money.  There have been times where I briefly used the paper route way and I’ve taught how to manage finances without using technology.  It’s not worse than tracking on a computer – just different.  There are pros and cons to both systems. 

1.  To track expenses the paper way, get a notebook or accounting ledger. 

2.  Make a list of your categories/expense accounts and write each one on the top of a separate page.

3.  Every time you spend money (cash, credit, check), enter the date and amount spent under the category it reflects.  For instance, if you buy milk and bread ($8), then list on the category page “Grocery” the date you spent the money and the amount.  

4.  At the end of each month or week if you prefer, draw a line across the page and subtotal the amounts.

A 3-ring binder is also great for this because in addition to the category pages, you can add a clear zipper pouch in the back to collect all your receipts.  You can usually find in a school section of a store.

Check in tomorrow for an example of Categories.  You will see how “obsessed” (excuse me…”detailed”) I can be on dividing up expenses.  Ever buy makeup in the grocery store?  My brain refuses to let me list that expense under Groceries because my receipt says “Kroger”.    See you tomorrow!  Dana