Over Your Head: living paycheck to paycheck

A friend posted on facebook about trying to save but not being able to because every week there was new "surprise" bill.  She said she has cut every personal thing and still, she can't get above water.  Sadly, many of my friends agreed.  Honestly I was flabbergasted because some of her bills were not surprises, like car insurance.  But, when you are living on edge, I guess they can.  Personal finance bloggers often say, pay your car insurance bill every six month, but if you can't save that little bit every month, how does that save you money?  However, if you can pay your car insurance every month, you CAN pay it every six months.  It just takes a change in attitude and planning.  So, let's be about it. shall we?

Often people are told to make monthly budgets but that sets you up for "surprise" bills that only come every six month or annually.  I recommend everyone make an annual budget and go from there. 
My budget looks like this:
 

Grocery

mortgage

house insurance

car insurance

taxes of house

car

gas

utilities

internet/phone

house repair

fun money

medical

misc.

school cost

cat

life/disability

daycare

baby expenses

Gifts/xmas

hockey

travel

Every bill I could think of is on there, and then under it is a list of things to add to the budget when I get more money including replacement costs of things like computers, large household items like a fridge or stove, everything.  I may not be able to put money in everything but I can start.  That helps me know where to put extra money if I get it or if I get a raise, if that ever happens.  
Can you see something is missing though?  I have no emergency fund on that list.  And I have a very good reason for that, my extra money goes to my emergency fund (EF).  Most of that money is from the rental but also little things like if I use amazon gift cards, that I get from swagbucks, instead of cash, I put the cash in my EF.   Everyone does need an EF, though many young people don't have one.  And that means putting those surprise bills on a credit card.  But even if the EF starts with $5 a month, that is a start.  And for young people starting is the most important thing.  Once you start thing snow ball.  Many of my bills are annual or semi-annual so I have a slush fund every month and except for a few months out of the year the slush fund grows (and throws a little interest into my EF).  So, what are some things you can do TODAY to stop living paycheck to paycheck?
Join swagbucks
Join My Points
Find a cheaper insurance company, my choice is Geico but check EVERYWHERE
Join ebates if you shop online
For that matter, see if shopping online is cheaper
If you pay for electricity, unplug everything!  Don't leave your computer plugged in or put it on a power-strip.

And if you are buy your own groceries check out money saving mom and cut your groceries spending at least for the one month.
By the end of the year you will have enough to change your car insurance to every six month which will save you an additional dollar.  And all of that will add up to a small emergency fund that will keep growing.   Just don't stop, keep the snowball growing and in no time you will not be living paycheck to paycheck.
If you have an idea that will help people stop living paycheck to paycheck, let us know in comments! 

Financial Carnival for Young Adults- November Second Edition

Maria @ The Money Principle writes Don’t Make Debt a Worry: Try These Business Tips - Don’t look at your bank statements, you think to yourself. If I don’t see my debt then it isn’t there.

Alexa @ Defeat Our Debt writes Should You Take a Vacation if You’re in Debt? - Your debt is stressing you out. Work is stressing you out. And you just need a little break from the normal day to day grind.

Alexa @ Single Moms Income writes Another Great Way to Give: Operation Christmas Child - I’m completely convinced that giving back to people whether that be with a thoughtful note, big batch of cookies, or small gift is one of the best ways you can make a difference in not only the world, but also in yourself.

Brad @ Enemy of Debt writes Motivational Monday: Mistakes Pave The Way To A Greater Success - I caught a segment on a popular morning news program in which the CEO of Google was being interviewed.

Larry @ KrantCents writes How to Save Money – Everywhere - Saving money is my passion! I consider myself a value shopper although I do very little actual shopping.

Natalie @ Debt and The Girl writes One of My Reasons for Working Hard… - Last Wednesday, I got to see one of my idols and favorite musicians: Paul McCartney.

Cat @ Budget Blonde writes Do You Worry Your Kids Will Feel The Struggle? - I recently had the pleasure of being on the Stacking Benjamins podcast with the lovely Paula Pant of Afford Anything and of course Joe himself.

Justin @ iPlugin writes Apple just sold 10 Million new iPhone 6 and 6 Plus units - The new iPhone 6 was recently released and, in its first weekend alone, Apple sold over 10 million units, which was better than their previous record of 9 million that was sold during the weekend launch last year of the iPhone 5.

Danielle @ TeacHer Finance writes How Does Cash Advance Work? - A cash advance is very similar to a payday loan, except the terms are generally a bit longer.

Aaron @ Aaron Hung writes Watch out for these Back to School Spending Mistakes - Much to the chagrin of children everywhere another school year is about to start, and that means that parents across the country are busy stocking up on school supplies.

Justin @ Edward Antrobus writes 6 Ways Shoppers are Deceived! - Brands and advertisers use specific marketing tactics to convince shoppers to make purchases There are some tactics that they use that, while not illegal, border on being unethical.

Marissa @ Thirty Six Months writes You Should Always Seek Value - To get yourself financially free, to make good investments and to get through life in a calm and relaxed manner – you should always seek value.

Marissa @ Finance Triggers writes Best Way to Collect Superannuation Funds during Retirement - If you work in Australia, then you are likely to have at least one superannuation account set up to help you out financially during your retirement.

Sam @ The New Business Blog writes Want to be Successful? Avoid These 5 Emotionally Charged Habits - There are, to be sure, many things that contribute to your overall success. Things like your attitude, your ability to lead, your people skills and so forth all have a big influence on it, no doubt.

Katie @ IRA Basics writes 4 IRA Withdrawals that Actually Make Sense - Withdrawing funds from a traditional IRA before a person turns 59 ½ usually means that they’re going to pay a lot of taxes and penalties.

Lily @ Paying Debt Down writes Some Facts to Consider before Filing for Bankruptcy - For many consumers the thought of having to file bankruptcy can cause quite a bit of anxiety.

Bob @ Dwindling Debt writes Looking for a Store Credit Card? Don’t Look Here -

Andrea @ So Over This writes Self-Employment Is Not For Everyone - Over the past year I’ve realized that my readers are divided into two different factions.

Hadley @ Epic Finances writes Stock Investing Myths and Truths Part 4 of 4 - Even though there's plenty of information about what works and what doesn't when it comes to investing in the stock market, many myths still refuse to die.

Lenny @ Best Money Saving Blog writes Stock Buybacks are Booming! - After faltering for a couple of months, buyback announcements from many major US companies shot up to a three month high recently, putting 2014 on track to be one of the biggest years ever for buybacks.

Amy @ Money Mishaps writes These are the Biggest Money Mistakes Couples Make When Divorcing - When people get divorced, it's the spouse who hasn't had a whole lot of experience with the family's finances that often ends up on the short end of the stick.

Jack @ Money Saving Ethics writes These 5 Savings ‘Tricks’ might not be so good after all - Even the best intentions that you have for saving money can sometimes lead to financial problems.

Matt @ Budget Snob writes Investing Doesn't Take Genius Intelligence, Just Common Sense - A quote that's attributed to Albert Einstein goes something like this: "Insanity is doing the same thing over and over and expecting different results."

Danielle @ Saving Without a Budget writes Common Money Mistakes - If you're not keen on throwing your money away, the mistakes below should definitely be avoided.

Jay @ Daily Fuel Economy Tip writes How to Save on Gas – Uncommon Ways - I will describe a few less common ways you can save on gas – I hope you will find them useful.

Oscar @ Money is the Root writes Paying Off Debt Smarter and Faster - There are few things better for your financial health than paying off any debts that you have as quickly as possible.

Daniel @ Make Money Make Cents writes The Expenses of Buying and Owning a Home - From finding the perfect mortgage with the appropriate fees, to the year round upkeep and maintenance, this investment requires a lot of time and capital.

Mario @ Adventures in Frugal writes What actually makes us fat? Or my plan to lose 15 pounds of vacation weight without breaking the bank - I look at empirical data to help figure out what actually makes us fat and use it to make a plan to lose some vacation weight

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Paul Vachon @ The Frugal Toad writes Are You Making One of These Top 4 Money Mistakes? - We all make mistakes and finances are no exception. In fact, most Americans typically struggle with personal finance due to a number of reasons chief among them a lack of personal finance education provided to school age children. Here are the top 4 money mistakes and some practical advice on how to avoid making them in the future.

Little House @ Little House in the Valley writes Life Can Be Busy - I’ve actually had some success turning my work into a profitable venture. Since I have to create lessons for my credential that I use in my middle-school classes, I’ve taken it one step further and now sell those plans and activities on Teachers Pay Teachers and it’s going really well!

Miss T. @ Prairie Eco Thrifter writes 3 Things to Do Before House Hunting - Because we had heard that house hunting is a difficult and emotional process, we decided to do some work in preparation for the purchase.

Mario @ Debt BLAG writes A reader asks: “What should I do with a $75,000 cash windfall?” - I give a reader advice on what I think to be the best way to handle $75,000 in cash with an eye toward the long term

Natalie Bacon @ Financegirl writes Why I’m On A Student Loan Repayment Plan Where More Money Than Necessary Goes Toward Interest - It may cost me more in interest per month, but here's why I'm on the standard student loan repayment plan.

Erastus @ Wise Dollar writes Etrade Review: Investing Made Simple - My Etrade review covers the online broker and the tools it uses to set itself apart from other brokers. Open an Etrade account and get up to $600 cash back!

Erastus @ Sprout Wealth writes Why Do You Earn Extra Money? - Many like to earn extra money for a variety of reasons. Why do you make extra money on the side? What purpose do you use to drive you to earn more?

Erastus @ Frugal Rules writes MOTIF INVESTING REVIEW: GET UP TO $150 CASH BACK! - My Motif Investing review covers this unique broker and their themed based investing approach. Get up to $150 with a new Motif Investing account!

Jeremy @ Modest Money writes Credit One Bank® Visa® Platinum Review - This Credit One Bank® Platinum Card is a card that can be useful, but should be handled with extreme caution. First of all, this is a card focused on folks with miserable credit. The card is marketed as a tool to rebuild deplorable credit scores. And it can! But if you don’t keep up with it, things can be worse for you than they were before. For the right customer, this card can be a strong ally, however.

Glen @ How to Save Money writes Swapping to Save Money - Start swapping instead of spending

Gretchen @ Retired by 40 writes Throw a Frugal Birthday Party - Throw a Frugal Birthday Party

Mel @ brokeGIRLrich writes How to Find Free Samples - Keeping a kit stocked with necessities is a big part of my job, so I'm pretty skilled in finding the best freebie deals out there! Check 'em out!

Updated Millionaire Plan November 2014

We now have $24150!  We are only $850 short of our goal of $25,000.  $25,000 is my gross income and it is also the minimum expenses we have for a year, excluding health insurance, work related expenses and daycare.  Given that we put aside over $1300 a month that means that by next month I should be reporting to you that I have a full year of expenses all set aside.  I can't wait!  Let's hope the market does not screw this up for me.  :)

So where do I go next?  My next goal is to add COBRA to my year of invested expenses and that costs about $600/month so I need to save an additional $7200 for a total of $32,200.  Looking at what we put aside I could get that saved in less than six months, if the market does not crash.  So let's also think about my next goal which will be my husband's higher salary of $41,700.

Things are starting to come along, but we are in a weak spot here.  Either jobs goes and we can't save this amount.  We are lucky to have low expenses and multiple streams of income (2 jobs and our rental), but to me they are not enough.  I am going to keep working on decreasing our expenses and increasing our income, both with adding streams of income and increasing our wages.  I am in the process of working on a grant that would increase my income from $25,000 to $30,000 if I get it, but who knows if I will.  But if I get the grant, I lose access to both my 403b and my pension so we are considering front loading the 403b and leaving more room in my husband's.  But that is a story for a future post.  See you soon and keep saving!

I joined an affiliate program!

You might notice something different about the blog now.  I have joined my first affiliate program and it is with Cash4books.net!  I learned about Cash4books over five years ago when selling the last of my undergrad books before moving with my then fiance to buffalo.  Prior to that I just sold through amazon or ebay or even sometimes at school, direct to other students because it gave me the most money.  However, when both of us were working insane hours, trying to pack and trying to get rid of things, I used this site.  I got money I otherwise would not have gotten, because honestly I just did not have the time to sell them on my own. 

It was a little less than what I expected to get on my own but not much less.  But life was crazy and I honestly forgot about the website after we moved.  Then a friend asked what sites I used to sell and I went back through my emails to remember and clicked over to make sure it was still the same.  Once I did, I saw they had an affiliate program and the rest is this blog post.  I am very excited to have them on the blog, but I want to assure my readership that I will only have ads that relate to the blog and are good for the readership. You can be assured that anything suggested on this blog is useful to me or I know of others who found it useful.  I will never plug anything that does not benefit you!

Learning to be Frugal Young: The Best Thing You Can Do For Your Future

When my husband and I were dating and applying to graduate schools, he got in and I did not.  And, strangely enough, that was the best thing for us.  We moved to buffalo with a very strict budget because we wanted to buy a house and take advantage of the 2009 tax credit.  We had discovered that our mortgage would be about the same as rent, if we bought a duplex on my husband's salary.  If we both had been working, maybe we would have bought a more expensive house, may not.  Maybe I would have bought our house all on my own, (we were not married then) and DH would have paid off his debt quicker.  But what I do know is that our budget would not have been so strict.  We had $5/week each for fun money and date money of $10/week.  Prior to moving to buffalo I had $20/week of fun money just for myself.  If we had not had so little money to spend, we would have kept the fun money at such a high amount.  But, because of our lack of money, we did not.  And that means I am used to only going out to eat once a month, or waiting for a DVD of a movie or even finding deals to catch that movie we want to see in the theaters.

We also spent very little on groceries.  We spent $30/week at the grocery store and $40/month at angel food ministries (which has since closed).  That was it.  It was not fun and the first thing we did when my husband got a raise was increase the food budget.  But that means we know how to cut the grocery budget down and that has helped us, when we ran over budget during the first half of the year and now have to cut way down. 

Those two are just small parts of our whole budget and we worked hard to be as frugal in every part.  This meant that when our daughter was born, we could afford daycare while I went to graduate school for my Master's.  It means that now, with my husband doing a post doctoral fellowship and me getting my PhD, paid, we can afford daycare and to save 30% for the future.  We are a long way from saying 50%, which is our goal or financial independence which is my ultimate goal but learning to be frugal is the base in which all of this is possible.  I never stop looking at our budget for leaks or trying to find better deals like geico affiliates or ting, both of which I learned about from http://www.mrmoneymustache.com/.

Grocery plan updates for a month and half!

We spent 107.44 wegmans, $31.53 for the warehouse club, $31.27 for tops and $7 meat store for a total for three weeks 177.24 which averaged out to 57.88 for each week from Sept 13-27th.  This is a savings of $20.76 from our "debt to the grocery gods" given that we went over during the first half of the year.  However, that was not enough.  Our goal was $48/week, with a reach goal of $45/week.  I am not surprised we went over because we needed to purchase both ground beef and chicken during those weeks. Hopefully we can stretch the meat so we don't have to buy more in the near future.  But still our "debt" to the grocery budget was down to $270.24 at that point.  But, life got in the way of posting so that was three weeks ago, so where are we now?

Well we spent $179.55 at wegmans, $7.89 at tops, $7.67 at the warehouse, and only $4 at the meat store because I was out of town last weekend.  This means we spent $199.11 over the three weeks, which is $66.36/week.  We went over our weekly max of $66/week from the grocery annual budget and now are in more "debt" to the grocery gods.  We now owe $271.35.  And the year end is getting closer and closer.  Do you think we might be able to make it?  Obviously we won't be spending anything this weekend.

We have ten weeks to go, and in there is Christmas and Thanksgiving in there.  Maybe we will get lucky, but we are cutting down the wire and we have eaten much of the food in the house that allowed us to cut down earlier this year.  Our normal budget allows for $66, so cutting $27 off would be $38.  We can't get below $50 so I doubt we can get to $38.   But this experiment has taught us how low we can go and how easy it is to go over.

Updated Millionaire Plan October 2014

So, with my husband changing jobs and commuting, things just have changed. And one thing that has changed is how we save for retirement. We have moved from our Roth IRAs to his employer's traditional 403b. We did this for multiple reasons, one is that they were using vanguard and the prices were very low, much lower than we could get and two, because we wanted to stay in our current tax bracket (10% for federal) and there are tax credits you can get if you put use a employer plan, not an IRA.

The main one is EITC, the earned income tax credit. EITC is dependent on your wage (minus FSA, health insurance and 403b contributions) and your adjustable income. Both need to be low to get this, and your traditional IRA does not affect your wage, though it will adjust your adjustable income. So we are now putting in $5233 into his 403b this year but his HR was not on the ball as much as we would have liked so, we had to adjust how that money came out. He received his first paycheck without the money being sent to his 403b, so we hoped online and increased the amount to make up for that, but that means we only put away $751 in September. And, because of the decline of the stock market that means we are at $22,836. Still not at $25,000, my gross income, but oh so close. Three more pay periods (aka a month and half) and we will be there. Well, only if the market cooperates. Let's hope please?

 As the end of the year comes to a close we will be turning to our taxes and optimizing them which may involve more repairs to the house, we have a list we want to do or increasing or decreasing the 403b contributions. We shall see, and I promise to post all of it here for everyone to see.