basic budgets & sinking funds

dave ramsey preaches the zero-based budget. personally, i highly recommend this idea.

the basic idea is that you “spend” all of your income on paper. when you receive your paycheck, write out where that money needs to go. the order i use is giving (or tithing), bills, sinking funds and cash envelopes. all are equally important, but my order goes from least flexible to most flexible.

for instance, we give a “non-negotiable” amount to our local church
next, our bills are mostly the same every month
then, we have our sinking funds and some are more flexible than others
and then our cash envelopes, and i’m the master fudging our grocery budget : )

subtract all of the above expenses from your net income and your number should be $0.00. thankfully, it’s not a super complicated idea.

it’s also not the only way to do a budget, it’s just our method of choice.

what is a sinking fund?
a sinking fund is a “savings account” that you deposit small monthly amounts for those large irregular expenses such as auto insurance, property tax, christmas, vacations, etc.

here is why i love sinking funds:
they save you money
we save over $200 each year by paying our car insurance in full every six months. if we didn’t use a sinking fund to save up for our car insurance, we would be unprepared to pay this larger amount and have to pay a more expensive monthly price.

they save you from stress
what? christmas is here already? i have seven immediate family members, six in-laws, one niece, four “adopted” family members and one husband. that’s a lot of presents! not to mention mailing out christmas cards, travel expenses, and a slew of other things i always forget that cost money around christmas time. because we save up for the expense of christmas all year round, it’s not nearly as stressful.

they keep it real
sure, it would be great to spend thousands of dollars on vacation every year, but realistically, we can only afford to save $40 per month toward a vacation, which totals up to $480 annually. we can still have a lot of fun with 500 bucks, and it keeps us from having unrealistic expectations for our vacations.

here’s a list of our current sinking funds:
general savings
auto insurance
christmas
eye exams
vacations
home insurance
property tax
birthdays
vehicle tax

she wasn’t always patient

a while back, i was thinking of my mom. as i was reviewing how awesome she was in my mind, i remembered potentially the best ami quote yet!

“collect your thoughts and get back to me”

now you know my mom wasn’t perfect, just in case you had the impression she was.

she would say this to us often. her time was precious, she had six mouths to feed, six dirty shirts every day, six heads to count at all times. and you know how children are, they call for your attention only to hmmm and ummmm their way through what could be a very short question.

i know i did this a fair amount of times, but i remember my brother adam being the worst. he would take so much time to ask a simple question.

so, in all her wisdom, she would look him in the face and say gently:

“collect your thoughts and get back to me, adam.”

he’d either spit it out right then and there, or he’d really have to collect his thoughts.

it worked like a charm.

‘member that time?

‘member that time my grandma tried to get my grandpa to stop smoking (after he had been for 50 years)? ‘member how she thought the best way to do that was to put handwritten notes underneath his clear ashtray so that he’d be immediately convicted to stop right then and there?

my favorite thing she wrote on one of them was a bible verse about the second coming or something and her words below it:

“think about that!”

[it’s ‘member that time monday at the van voorst‘s blog!]

for my non-facebook friends

sometimes, i get cahrazy and chop my hair off. and i know at least one person (ahem, leah) doesn’t have facebook. so this is for you, leah! here’s the new do! i’m pretty much in love with it!

here was my inspiration:

the book list

the first 6 months of 2011 have completely flown by for me. i believe this to be the result of working a bunch and barely having time for anything else. but life has started to slow down-God is good!

these past couple weeks have been blissful, i’ve slept a lot. like 10 hours a night some nights. it is seriously as if i’m catching up on all the hours of sleep i missed the past year. but sleep is boring, it’s not really worth it. i’m just as awake if i get 10 hours or 6 hours. i think i’ll go for a happy medium. but what i’m trying to say is that i want to be more productive with the extra time i have.

i rather enjoy having a list of goals on my blog, it really motivates me to actually reach them. one of my goals is to read 20+ books this year. so far, i’ve finished three. like i said, i’ve been busy!

speaking of goals, craft of the week will be back next week! how excited are you?!

cheers to knowledge, recreation and relaxation. cheers to reading. cheers to book lists:

finished:

mortom by erik therme (not yet published, but very entertaining!)

a knitters home companion by michelle edwards

stuff christians like by jon acuff

on the list:

organized simplicity by tsh oxenreider

for women only by shaunti feldhahn

the life you’ve always wanted by john ortberg

sticky church by larry osborne

quitter by jon acuff

gazelles, baby steps and 37 other things dave ramsey taught me about debt by jon acuff

the appomattox saga series by gilbert morris

a lineage of grace by francine rivers
something (suggestions are welcome) by karen kingsbury

slaughterhouse 5 by kurt vonnegut

catch 22 by joseph heller

the grapes of wrath by john steinbeck

east of eden by john steinbeck
the hidden art of homemaking by edith schaeffer

that’s what i’ve got so far. my goal is not necessarily to read all of those books this year, but i definitely want to read at least 17 more books.

any suggestions?

oh harry

the debt snowball

note: in the last couple posts i stated that we had $13,000.00 in debt at the beginning of 2009. after going through our financial records and realizing i don’t have much recorded before june of 2009, i’m going to revise that statement. we had approximately $13,000.00 in debt in june of 2008. i thought you might appreciate correct facts!

here’s what 2008 & 2009 looked like for us, debt snowball style:

2008
in six months (june-december), we paid off roughly $3,000.00 in debt. i didn’t keep great records of our finances personally, and mostly relied on online banking. so this a rough estimate.

january
started the year off with a little over $10,000.00 in debt
fully funded our honeymoon budget with christmas money/bonus
started financial peace university with our connection group
paid off debt

february
started couponing more
received a tax refund
put $1,000 in an emergency fund
paid off debt

march
found out my dad lost his job, God provides for our wedding.
purchased our wedding bands on 0% interest credit: increased our debt by $500
shared all of the above with our connection group
paid off debt

april
worked on our married budget a lot
decided to live off my income after we get married
paid off debt

may
got married!
paid cash for our honeymoon
wrote hundreds of thank you notes to our generous wedding guests
cashed our wedding checks!

june
started married life with about $8,000 in debt
paid my car payment down by $2,000
started saving for tuition

july
paid my car payment down by $900

august
paid off my car (our only interest-accruing loan)!

september
paid off our wedding rings!
paid down our debt to bryan’s parents by $850
ended september with $2,600 in debt

october
bryan’s car requires $2,620.68 in repairs

november
paid for the car repairs with the money we were going to pay off our debt to bryan’s parents
stopped in awe at how precise the numbers were
revised our debt pay off plan
ended november with $2,600 in debt

december
bryan’s parents gave us the gift of being debt-free by forgiving the balance on our loan from them!

by God’s grace, we started 2010 with a plan to move to iowa city, and nothing in our way. we had no debt! hopefully this encourages you that in time and with a lot of effort & hard work, being debt free is possible!

we’ve had a good run, netflix

well, i thought i’d step up on the proverbial soapbox and give my piece about the topic you’ve undoubtedly heard something about: netflix is raising their prices.

as i’m writing this, i wonder if it’s even blog-worthy, but hey, i’m not one to hold back.

the price increase came at a great time for us. we loved netflix instant streaming for watching older television series’ such as x-files. we loved getting not-good-enough-to-see-in-theatre new releases delivered right to our mailbox. and we thought the price was fair for how much we used it.

for myself more than bryan, i haven’t watched something that i actually wanted to see on netflix instant for a few months now. i just watched disney channel shows on netflix because they were there, not because i woke up those many days and thought, i really want to see what happens to teddy on “good luck, charlie.”

bryan enjoyed a lot of the crazy misunderstood movies that netflix offers. but even he was complacent to netflix when i proposed we cancel.

we cancelled out netflix subscription as a result of the price increases, but more as an effort to simplify our lives. while we really enjoyed having such convenient tv & movies for a year and a half, we decided we’ll be better off with it.

thank you family video, for staying in business these past few years. i know it’s been rough, but you’re about to get a lot more business from us!

‘member that time?

‘member that time when me and my bff got to go on vacation together? ‘member how we kept ourselves busy by arguing about who’s hair was fine or coarse and counting all the “cow’s toilet paper?” what? you don’t know what cow’s toilet paper is?

it’s that giant “roll” of hay/grass. duh. we counted over 200 easily.

[it’s ‘member that time monday at the van voorst‘s blog!]