Wave Chasing

AKA, spending cash. This one is a bitch cause it can get out of control so damn fast. I base my planning on the numbers I suck out of Quicken, and I have data going back to 2003 (damn database limitations, I had to compact the prior years and lost the detailed info.)

From 2003 to 2004, my discretionary spending increased by 4%. From 2004 to 2005, it went up over FIFTY FREAKIN’ PERCENT. And then in 2006, another DAMN 40 PERCENT. I’ve got the numbers in front of me, but damned if I can still figure out WTF has happened here. I don’t recall feeling at all deprived in 2003 or 2004, and I spent a hell of a lot less. At the moment, 2007 is at least on track to drop 5%, which is something, but still fairly ridiculous.

Granted, real vacations started again in 2005, so that is a new, yet steady expense. There were some one time big items in 2005 and 2006 (new computer, new bike) but those aren’t recurring – there should be a drop way back down this year. So, right now, I’m still not really sure what happened in 2005 that set this new insanely high bar for spending, but I’m definitely working on 2005 and 2006 just being a weird spike.

I’ve got a list of categories that right now plot out to year end as being higher than previous years and I’ve got an close eye on those. They are:

– Auto Service. Not really controllable, but as long as my car only needs basic maintenance the rest of the year, that should end up OK. (Had some weird things go wrong early in the year.)
– Bank Charges. Totally controllable – no reason to go to any ATM that charges fees – my credit union ATM is slightly out of the way, but not so much that the extra 5 or 10 minutes to get there costs more in gas than the $3 hit I take using another ATM.
– Cash. This is partially because the past couple months I was going “cash only” to see if it made a difference in my spending patterns, so my ATM hits went up. It really doesn’t seem to change anything, so I’m going back to using my Discover card (paid in full every month) and at least getting the 1% cash back and being able to track specific categories more closely.
– Computer. This is more of a fluke as I had to spend some $$ early in the year on a repair and a rental. Shouldn’t really have anything more on that category for the rest of the year unless I replace the server, and if I do, that will be with a very inexpensive box.
– Race registrations. I don’t think I’ll be registering for any more races this year, so that will probably end up OK.
– Home Repair. Nothing else had better break around here.
– Meals & Entertainment… Yeah, this one I’m pretty much screwed on. My sports bar is my home away from home, and it shows here. Time to start getting random men to buy my drinks.
– Office. This one should in theory turn out OK, as I have a Staples gift card to cover any other office supplies I may need.
– Travel. I’m not going to hyperventilate too much on this one, as I *am* traveling more these days. It just is what it is.

All I can really say on this category is think before you spend, find your big categories and see where you can cut back and do the best you can.

Water bill

Having had running toilets at the townhouse, I can tell you that this is a major waste of water and money. Fortunately, all the toilets, sinks and such here are in good shape, so we don’t have water & cash dripping out the door. I don’t mess with half-loads of laundry, because I’m still not convinced that two half loads don’t use more water than one full load. Get the dishwasher as full as possible before running it. (Sometimes that doesn’t always work, but I try.) The yard and gardens don’t get watered unless there is something new that has been planted, or we’re in an extreme drought situation and everything is going to die. (But then again, if we’re in a drought, we’re probably under water restrictions anyway.)

The managing expenses series is just thoughts on how to keep money from flying out the door unnecessarily since I don’t have a guaranteed paycheck anymore…

Telephones

I regularly look at the cellphone plans being offered to make sure I’ve got the cheapest one that suits my needs. So far, so good on that one. I do have a landline still, which rarely gets used, but I also have an elderly relative that has that number memorized, so it’s being kept for now. No need to force her to learn a new number.

The managing expenses series is just thoughts on how to keep money from flying out the door unnecessarily since I don’t have a guaranteed paycheck anymore…

Health Insurance

I went with a high deductible plan from Assurant Health. (You might know them by their former name, Fortis Health.) I really don’t go to the doctor much at all, so the out of pocket expenses are fairly minimal for me, but I am covered in case I get hit by a bus. The key with this is to be sure that you do have enough in the bank to cover the deductible should something bad happen. I am paying the same amount as I did for the health insurance I had through my company when I was working (and they were covering a ton of that expense to boot.) The company plan had so many things built into it that I never used, which pushed their prices up.

The managing expenses series is just thoughts on how to keep money from flying out the door unnecessarily since I don’t have a guaranteed paycheck anymore…

So, with no steady/guaranteed paycheck coming in, managing expenses is more important now than it ever was. I’m not talking draconian measures by any means, but keeping an eye on things and figuring out where money may be flying out the door unnecessarily. I was going to talk about everything in one post, but it became incredibly long very quickly, so I’m splitting it up into a few posts.

Electric & Gas Bills

Right now we’ve got that great spring weather where we don’t need heat and we don’t need A/C. The ceiling fans in the house keep things very comfortable. That is something I will have in every home I ever own – they’re spectacular in the summer because you can leave the thermostat set at a higher temp, but the air is moving and it just feels better.

I’m really bad about leaving lights on all over the house. I am simply not one of those people who can have a pitch black house at night. I do need to be more aware of it though – leaving *a* light on is one thing, having the place at 50K candlepower at 2AM is quite another. I have been in the process of replacing lightbulbs with the compact fluorescent bulbs. They do last forever and a day, but they also take a little getting used to – the light they produce is a little different from incandescent bulbs, and they do have a slight delay when you turn them on. The initial expense is definitely made up with not having to buy incandescents every time I turn around.

Programmable thermostats. That is on the list of improvements for this house. I had one at my townhouse and it was great. When I worked outside of the house, I could set it so there was much less usage of the heating/AC system while I was gone, and it did make a difference in the electric bills.  I really love having one in the winter time – it’s great to have the heat go down automatically at night and turn back up just before you get up in the morning. :) Oh yes, saves money, too.

Also – don’t just set the thermostat straight to 80 in the summer and 60 in the winter – you’ll just be instantaneously miserable and go right back to what it was. So, try turning it up or down just one degree and leave it that way for a couple days. That way you’ll be able to give yourself a little time to acclimate and more likely to have it set higher or lower than you might have thought in the first place.

Laundry – cold wash/cold rinse whenever possible.

Weatherproofing – the house I am in now has relatively new windows in it, which does make a nice difference. No drafts letting cold air in and warm air out in the winter, and vice-versa in the summer. If you can afford this upgrade, it is worth it – not just from the resultant energy efficiency, but being able to ditch the crappy storm windows and have windows that open and close easily is wonderful. The doors all have adequate weatherstripping on them to prevent drafts as well. The fireplace has a glass door on it – while not completely weatherproof, it does keep the drafts way down compared to just having a screen.

Both the gas and electric company here offer “budget billing” where they take the past years usage and figure out the average cost per month and that is what you pay, and it gets trued up at the end of the year. I’ve taken this option before, and while it’s great for budgeting out cashflow, I just didn’t like it. I’d rather pay the actual amount each month, and I’ve tracked the numbers long enough that I usually have a pretty good idea of what to expect.