Money in the Bank?

It’s September. With the colder winter months just around the corner I need to start thinking about budgeting and saving money.

I have 3 kids. I currently survive on about $15,000 a year. I rent a house ($375/mo), I don’t own a home. I’m still making payments on my used car ($250/mo), which will take me another 2 years to pay off. My other recurring monthly bills are basically utilities (electric, phone, etc.). I don’t have any credit cards. So, my only debt is the $6000 that I owe on the car.

The house I am renting now has an electric furnace. In the winter months, my electric bills doubles to $300 a month. In anticipation of this increase, I’ve decided to make a household budget. I would also like to start saving money as I have $40 in my checking account and no savings of any kind.

I started using a money management website called Mint.com. It’s 100% free to use. I would say that it is very user friendly. It is easy to put in your income and list your monthly bills. In the end, it tells you how much you will have left over at the end of the month. You can also link your PayPal and Bank accounts to Mint.com and track your deposits versus your spending.

This was an eye-opening experience for me. You don’t always realize what you are spending money on until you have to write it all down. Aside from my regular monthly bills, I added in household supplies (toiletries, laundry detergent, etc.), gas for the car and eating out at restaurants. As I was browsing my bank statement online I realized that what I thought were small charges really added up.

Going to places where I would just swipe my debit card and go really wiped out my checking account. When I would stop to get gas I was also buying drinks, snacks and cigarettes. In my mind, I was spending $20 for gas but in actuality it was more like $3o+. When I would go to Walmart, where I intended on just buying a few items, would end up being a cart full of impulse buys that I didn’t really need. Going in to get toilet paper and shampoo, would result in me spending $50-$75 instead of $10! This can be hard to avoid when you have young children begging for toys and any other items that are strategically placed to catch their eye. Shopping online is another weakness that I have. You can buy almost anything online these days. Believe me you can spend a lot of money without even leaving the house.

In order to save money I need to cut back significantly on impulse buying. I need to stick to my budget and only buy the necessary items on my shopping list.

Here are a few ways to cut back and avoid unnecessary spending. Cooking more meals at home and eating before I leave the house should cut down on debit card swiping at restaurants and at the drive thru. Also, bringing a drink from home and paying at the pump for gas will eliminate the need to go inside the convenient store. Quitting smoking would save me up to $800 a year! Instead of going to a mass retailers such as Walmart to do my grocery shopping, I’ve decided to go to a smaller grocery store. This would lessen the urge to buy items other than food. To avoid spending too much money shopping online, I have recently become addicted to Free Samples. This way, I am still ordering something online and still feeling excited when I get something in the mail but it’s not costing me anything.

I needed to find a way to save money where it would not burn a hole in my pocket. If I know the money is just sitting there in my checking account, I’ll want to spend it. As I was budgeting my money on Mint.com, over on the side, it asked if I wanted to set a goal. I never really thought much about a specific goal. I just wished that I had more money to buy the things I wanted. So, I checked it out and they gave a few suggestions. Save to buy a car, a house, go on vacation, etc. I have always wanted to buy a house instead of renting but I have never had money for a down payment or enough credit to apply for a loan. So that is what I chose. Then it asked where do I want to keep the money I’m going to be saving up. It suggested a few banks to open a savings account and listed the banks requirements and interest rates.

I decided to open a new savings account with Ally Bank. There were a few reasons that I selected Ally bank from the list. One was that they paid a higher interest rate on your savings than the other banks on the list. Another reason was that there was no minimum balance requirements. Also, there was no minimum opening deposit. Most banks require a $25 – $100 opening deposit to get a new account. I chose to open this account with just $5. Another thing about Ally is that they don’t have any physical branch locations. They are strictly online. They have several deposit options to fund your account and you can use any ATM fee free the get your money out. I think this is a good choice for me because like they say, out of sight – out of mind.  So once I put my money in the bank, it can stay there. Even if I wanted to take some money out, I don’t have to worry because Ally does not charge any low balance fees or monthly maintenance fees.

According to the calculator on Mint.com even if I can just manage to put away $25 a week, in 20 years I would have over $20,000.  That might not seem like much to some people but I’ve always had to live check to check. I spend more than $25 a week on take-out food. If one day I can wake up with $20,000 in the bank, I’ll be a happy camper!