Monday, November 3, 2008

Counting Pennies but Still Encouraged

On Saturday I promised myself that I would review my cash flow analysis to see if I could "find" additional funds to begin accelerating my mortgage. Since I allocate every dollar each month I did not expect to find a gold mine but I was hopeful that something would surface. At this point I am just looking to begin the process of consistently paying extra towards the principal. So that you can help me out, here is a snapshot of my variable and/or discretionary spending:

Net Spendable: $ 892.00

Auto - Gas 200.00
Groceries 200.00
Personal Care 150.00
Blow 200.00
Vacation 100.00

Net Surplus: $ 42.00

***Everything above net spendable is non-negotiable (i.e. taxes, charitable giving, retirement & other savings, mortgage and utilities.) I do pay $40.99 each month for cable and I classify it as utilities. I sacrificed and worked so hard to get out of debt that I promised myself I would not carry the miser mentality with me when I became debt free. With the exception of groceries and gas, everything else below net spendable is up for some extent....maybe;-).

My net spendable amount rarely changes because the line items calculated to that point are pretty much fixed costs. If your budget moves around significantly each month, one suggestion is to put your utilities on budget billing; I participate in budget billing with my utility companies.

The way I see it, I can allocate the monthly surplus of $42 as my additional principal payment or I could dig a little deeper and do a little more sacrificing. Before I commit to digging deeper, let me explain what goes into each category.

Auto - Gas: I think this is self explanatory.

Groceries: Again, self explanatory. I like really good food and sometimes my food costs can get out of hand. The only method that works for me is to use cash in the grocery store. Cash and cash only. Whenever I use my debit card I go over budget 100% of the time!

Personal Care: Ahhh, my fabulosity fund (aka fab fund or glam dollars). Expenses in this category include dry cleaning, hair, manicures, pedicures, eyebrows, I think you get the picture. Although I do not indulge in all of these services every month, I do tend to use every dime in this category. When I was plowing my way out of debt this line item did not exist. In the spirit of transparency, I have to let you know that I am quite hesitant to eliminate this category. I could possibly reduce it, but I surely will not eliminate it.

Blow: Yes, I blow it. I could not tell you for certain where it goes. This is my freedom cash. I get to do whatever I want to with it. Again, during my debt payoff days, this line item did not exist. Whenever I eat out or purchase gifts I use blow money. There are times when I don't spend all of the blow money but even if I don't I still get my monthly amount.

Vacation: 2008 was the first year that I actually had a vacation line item. I set aside $100 each month towards my vacation plans for the year. This is a line item that I'd actually like to increase.

Did you notice that a category is missing? One line item is noticeably missing...clothes. I have yet to include a separate line item for clothes but between blow, personal care and infrequent cash inflows (i.e. bday/Christmas gifts, bonuses, and tax refunds if applicable) clothes are purchased.

The chat lines are open. Do you have any suggestions on how I can at least increase the additional monthly principal payments to $100 rather than $42? Remember I plan to begin accelerating my mortgage 1/1/09 but I do not plan on living like a miser again. Ever.

~Ms. Money Chat

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