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  • When you’re in the red

    It’s been a time of big expenses for us, as we’ve paid for our property taxes, income taxes (we owed some this year), plane tickets and more. That means we’ll spend a couple of months “in the red” – that is, spending more than we’re bringing in. And even though we have the money in savings (and some of the expenses were actually budgeted for), spending more than we make causes me great discomfort and even a little anxiety.

    A big part of that is my personal lack of income – as a blogger, I don’t make anything close to what I used to make as a lawyer. But there’s not a whole lot I can do about that now. So . . . here are some tips for coping psychologically when your expenses suddenly outweigh your income:

    Stem the tide – Spending can be like a break in the dam. First there’s a slow trickle, but the pressure builds up and boom! – there’s a big hole in the wall. The trick is to patch the dam before the hole gets too big. You can do that by questioning every expense, and asking yourself if it needs to be made right away, or if it can wait for a while.

    Cut back where you can – Things like eating out, gourmet groceries, a night out at the movies, and so on can almost always be put on hold while you get your finances back on track. For me personally, this often means limiting shopping solely to the grocery store for perishables only, and not stocking up on something I don’t need immediately, even if it’s a good price.

    Bring in some extra income – This is one of those times when doing little things to bring in extra income can have a bigger impact on your mental state than your actual bottom line. You can sell some stuff on Amazon, eBay or Craigslist, have a yard sale, or take surveys (I like Pinecone Research best). And that’s just a few ideas – there are many other ways to bring in a little money.

    Declutter – It never ceases to amaze me how much better I feel about everything by decluttering a room, closet or other area. In this particular situation, it’s a good reminder of how much I have, how little I need, and that everything is going to work out just fine.

    Maintain perspective – Sometimes spending money makes sense, whether it’s paying the taxes to avoid paying even more in the form of a penalty, or going on a rare trip to see family. The purpose of saving money is precisely so that it’s there when you need it – at times like this. Keeping that in mind helps to relieve the anxiety of seeing the balance in your bank account go down!

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    Final March 2012 Shopping & Cash Experiment Update

    I did a modified all-cash experiment for my grocery and drugstore spending in March, and ending up going over my $500 budget (as I predicted I would last week). The total stands at $568.23, although I think I’m missing a few Walgreens purchases using the Friends & Family coupon on Friday, and the final total should actually be more like $590.

    My spending in the past few months was also around $600, so that just seems to be the right amount for my family. As I neared the end of the month and that $500 mark, I realized that I wasn’t willing to give up those things that would put me over – namely, the organic and hormone/antibiotic-free products that I choose to buy, stock-up items like butter, and donation items that will be put to good use in the coming weeks.

    For example, I’ve begun stocking up for the post office’s Stamp Out Hunger food drive in May. And Challenge butter was $1.49 at Ralphs through Saturday, so I bought 12 pounds last week. We’ll use it all in the next six months or so, and I wasn’t sure I’d be able to get that much RBST-free butter that cheap again now that Ralphs has eliminated double coupons.

    So I don’t regret going over budget at all. And I don’t regret doing the cash experiment either. I did find that I was inclined to spend less when I was using cash, and I could have kept my costs down if I’d made different choices. That realization alone made the whole experiment worth it – it’s nice to know that I’m not mindlessly spending money on groceries, toiletries and household items. The amount I spend is a good balance between keeping expenses minimal while still accomplishing my priorities of serving my family organic and hormone/antibiotic-free products, and helping others. ^_^

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    Shopping & Cash Experiment Update – March 27

    I’m doing a modified all-cash experiment for my grocery and drugstore spending in March. After setting some parameters, my total stood at $402.16 when I gave my last update, 20 days into the month.

    Today, on Day 27, I went over budget. That’s right, I crossed the $500 mark in spending for the month at Trader Joe’s this morning.

    I could have stayed under budget. But that would have eliminated some donation and stock-up items, and I’d rather spend a little extra while paying as little for them as possible.

    Right now, I’m just over budget, but I will probably spend a little more before the month is over – I haven’t been to the Farmer’s Market or Whole Foods yet this week!

    I want to gather my thoughts over the next week or so, and then I’ll share my final impressions about this cash experiment with you.

    Shopping & Cash Experiment Update – 3/20/2012

    I’m doing a modified all-cash experiment for my grocery and drugstore spending in March. After setting some parameters, my total stood at $291.30 when I gave my last update, 13 days into the month.

    What I’m seeing now is just how much my commitment to organic dairy products for the kids, and hormone- and antibiotic-free meat for our family, impacts my spending. Almost 20% of my $500 monthly budget is committed to organic milk for the boys. (I’ve been buying a lot of single serve cartons since my youngest won’t drink milk at preschool, and I’m loathe to give juice to my older son every day – plus he needs something disposable for one of his two meals at school, and won’t drink water).

    I could also easily spend another 30-40% of my budget on meat and seafood at Whole Foods. (I occasionally find organic chicken on clearance at Vons, and then I buy what’s left. But that happens pretty rarely.) I haven’t bought that much so far this month, but based on what I have bought, I can see how it adds up quickly.

    I don’t plan on changing my commitment to buying these types of food for my family, but as obvious as it seems, I never really thought about just how much it costs since I knew we could afford it. Now I’m wondering if $500 is an unrealistically low budget for my family, in light of how we eat (and so I appreciate this guest post at Money Saving Mom, and this discussion at Good Cheap Eats, on setting a grocery budget that’s appropriate to your family).

    The bulk of my spending this past week was on cereal at Ralphs, fruit sauce pouches at Ecomom (thanks to the Plum District voucher), and dairy and produce at Trader Joe’s. My total spent so far this month is $402.16.

    I suspect I’m going to go over my $500 budget for the month before all is said and done, but we’ll see!

    Shopping & Cash Experiment Update

    I had a rough shopping day today, as stores were out of the items I wanted, and prices were higher than I expected (for example, Soft Lips were $3.99 instead of $1.99 at Rite Aid). The kicker was at Pavilions, where I was told they no longer accept printable coupons with a face value of more than $1. I came home and checked the coupon policy, which of course didn’t say anything about this, so I emailed them and we’ll see what they say.

    Thanks to these problems, I ended up buying very little while I was out, but that’s because I did the bulk of my weekly grocery shopping yesterday at Trader Joe’s. With one weekend of shopping under my belt this month, my cash spending for groceries and at the drugstores totals $132.16 – just over $70 of that was at Trader Joe’s, $20 online at Abe’s Market, and $20 at Whole Foods on meat. That total also includes a fair amount of stockpiling, especially of cereal and toothpaste. I normally would have bought a few more things at Trader Joe’s just to “have on hand,” but I think it’s about what I usually spend in a week.

    One thing that I see coming from my efforts to spend less and save more is that I am trying to cook more “homey” Japanese food, rather than just buy expensive sashimi or eat out because I’m craving it. It’s still on the pricey side because I buy a lot of organic and high-quality ingredients, but it’s still cheaper overall. ^_^

    Setting The Rules for The Modified Cash Experiment

    I’m experimenting by going all cash this month when it comes to my grocery and drugstore spending.

    But on Day One, I ran into a wrinkle when I bought a Plum District voucher to Abe’s Market and then spent it. I had to pay $19.19 on my American Express, and all I bought was groceries – Plush Puffs (which are the best marshmallows ever), some fair trade cocoa, and some lunchbox items for the boys. It seems like that money should come out of my grocery spending so I pulled $20 out of my cash envelope.

    I also realized that I have a Vons gift card  – it doesn’t make a lot of sense to spend cash when I have the gift card. But I think that’s what I’m going to do anyway. If I get to the end of the month without any money left in my envelope, I can use the gift card to buy our milk and produce to make it to April 1. 😉

    Also, I will keep using my credit card at Ralphs (our Kroger affiliate) to buy gift cards – as I’ve mentioned before, I like to maximize my credit card rewards to get discounts that I wouldn’t otherwise get at stores like Target and Amazon. {As a side note, I do realize I’m giving up some credit card rewards by going all cash – but the purpose of this experiment is to save money, so hopefully I’ll save more than I would have earned via rewards.}

    I can’t foresee any other issues that might come up, but it’ll be interesting to see if there are any!

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