Friday, March 27, 2009

Living with the Leftover

On my last posting, I mentioned briefly about our new savings program. Both C.J. and I have the tendency to spend what we see. If we know we have $5000 in our checking account, our spending for the month will be crafted to spend that $5000. However, if we know we have only $1000 in our checking account, somehow we survive with that money without having much trouble.

So, we decided to leave as little as possible in our checking account, and put away as much as possible in forms of something that cannot be accessed easily.

This works great for us. We might not get all we want, but, at the end of the day, we do get all we need and still get to build the financial freedom and security.

Sunday, March 15, 2009

Flub #1

We, the finance-savy couple, flubbed - flubbed BIG time.

Our food cost in February went over $400! Calm down... At the end of the day, we are mere human beings who can be just as careless as anyone can be. So, rather than grieving over the flub, we sat down and decided to take a cold look at the food cost of our February's spending. Here are the lessons we learned:

1. "Everyone" in the household needs to know the current status of spending

In February, C.J. was in charge of logging and updating our spending plan, and I didn't take the time to take a look at it. Not knowing what was going on with our food spending, I let our grocery shopping go unchecked. Also, C.J. enjoyed many eat-outs and decided not to include them in our food category. He created a new category called eat-out and made himself feel better telling himself 'food'category is still under $250.

2. Have a plan of what to do with surplus

Due to C.J.'s tuition for MBA, our finance had been tight until January. When February came, we knew we would be able to afford to be more lax on our spending. Then, we let our spending go unchecked in many ways - big time in food cost. Now we have a new savings program where we put little bit more than our estimated monthly surplus. Knowing that we both have the tendency to spend if we see the money, we decided to leave as little as possible in our checking account.

3. Reward yourself, but Don't be careless

As we have been good steward of our finance and paid off C.J.'s tuition without getting into debt, we deserve some reward. We were careless for a month and let the food bills hit the ceiling, which was very short-lived, unproductive way of rewarding. To celebrate C.J.'s graduation and our financial diligence, we are saving for a vacation in May, instead of keeping splurging on un-needed, trivial things.