A Penny Saved is a Penny Earned

The first couple months of budgeting, I absolutely failed.  I would always go over budget in multiple budget categories.  Many times, I would only go over a budget category by a few dollars.  I would be at a store, knowing I had $xx left in my budget category.  An item I wanted would be $xx, so I bought it.  With tax, I would go over budget though.  At the time, I thought that this was not a big deal.  But it started happening in every budget category, every month.  And it started to add up.  I was living outside my means.  I realized it is important to remember that your budget is the absolute most you can spend that month.  You should pretty much NEVER go over your budget.  If you do go over budget, you are living outside your means.  So obviously, the goal is to be under budget in as many categories as possible as many months as possible.  But what do you do with the extra money each month?

Specific Budget Categories vs. General Budget Categories - What Works for Me

When I first started setting a budget for myself, my budget was very specific.  For example, instead of setting a budget for Gifts, I set budgets for Gifts for Friends, Gifts for Mom, Gifts for Dad, Charity Donations, etc.  Instead of setting a budget for Entertainment, I set budgets for Music, Movies, Concerts, and Sports Games.  Very soon, I switched from having a very specific budget to having a more general budget for the following reasons:

• Because I had so many budget categories, each budget category had little money that could be allocated to it.  Even with a few small purchases, I would go over budget for a category.
• I never had an expense from every category in a month.  Also, each month the categories I had expenses in changed.  For example, I never had to buy gifts for friends, my mom, my dad, my siblings, and give to charity in the same month.  So categories would switch from being a budget category to more like a "savings" category from month to month.  This made it hard to stay on budget.  I would think I had a certain amount to spend in a month on Gifts for Mom, for example, when all that money in that category should have really been saved for the month.
• With so many budget categories and so many exceptions for going over or under budget for a given category each month, it was hard to measure how much I really had left to spend that month.  I ended up going over my total budget several times.
• Some purchases can fit in multiple budget categories.  A good example of this is running shoes.  This could be categorized under Health & Fitness - Sports or under Shopping - Clothing.  When an item can fit in multiple budget categories, you find yourself categorizing that item differently each time you purchase it depending on how much you have left in each budget category it can fit in.

I moved to a more general budget after experiencing these issues with my very specific budget.  Now I simply have the following budget categories: Shopping, Home Supplies, Auto & Transport, Internet, Rent, Student Loan, Entertainment, Electricity, Health & Fitness, Personal Care, Furnishings, Food & Dining, and Everything Else.  I decided on these categories because they are the categories I tend to spend the most money in.  My Everything Else category covers expenses that come up only once in a while for me, like Lawn & Garden expenses.

Even though I now have a general budgeting system, I can still categorize each expense as something more specific.  For example, if I buy a new shirt, I categorize it as Shopping - Clothing.  It shows up as an expense in my Shopping budget.  But having it categorized as something more specific lets me use other features of +Mint.com, like their Trends tab.  In the trends tab, I can explore my spending habits in more detail when I classify expenses as specifically as possible.

Obviously, I am a proponent of having less specific budget categories.  I am sure there are people with budgets even less specific than mine though.  And I am sure there are people that have had budgets with specific categories work for them.  What categories do you use for budgeting?  How does it work for you?

Tips from a Photography Beginner on Choosing a New Camera

A few years ago my digital camera broke.  Being a college student at the time, I was too broke to replace it.  After starting my blog, it became obvious that my cell phone camera is awful, and I needed to replace that broken digital camera.  Unfortunately, I knew little about cameras.  Researching cameras was to no avail as I did not understand the terms that distinguished one camera from another: point-and-shoot, SLR, ISO, aperture, metering... the list goes on and on.

Budgeting After Landing Your First Job

I grew up in a pretty affluent suburb of Chicago.  When I went to college, I realized that my upbringing was basically like growing up in a bubble.  Families in the area had lake houses, country club memberships, and multiple cars per family.  Things that are definitely not normal seemed normal in my eyes -- some classmates received brand new cars on their 15th birthdays (so that they could practice driving with their permits in their own cars, naturally), some families had private jets, live in nannies, and took multiple extravagant vacations a year.

DIY: Leather Wrap Bracelet

Homemade Laundry Soap

There are many suggestions for how to make homemade laundry detergent.  It seems all of them contain Borax, washing soda, and Fels Naptha (or some similar bar soap).  Then some recipes suggest also adding baking soda, Oxy-Clean, and/or some sort of scent.  All of the recipes claim that homemade laundry detergent is less harmful and less expensive.  So, I decided to give homemade laundry detergent a try!  The upfront cost is more expensive than buying non-homemade laundry detergent, but per load is much cheaper (see cost analysis below).  If you can afford fronting the money to make your own, you will save in the long run!

Google Play All Access Review

I saw an offer to try Google Play All Access for free for 30 days.  I absolutely love music.  I listen to it all day long -- in the shower, at work, during my commute, while cleaning my apartment...  I've tried other music players and none fit all of my needs.  I'm pretty picky.  I need to...

"Investment": Freezer

When I moved out of my parents' house, I started to buy frozen dinners.  It was convenient - I didn't have to cook for myself which was a big plus when I was super tired after work.  It also was too hard to keep fresh food in my apartment for myself; so much of it would go to waste because it went bad before I could eat it all.  It was also difficult to go to the grocery store often enough to keep fresh food around.  However, I've gained weight, the list of ingredients on frozen dinners is disturbing, and I am spending so much money on frozen dinners!  I decided enough was enough, and I had to figure out something else.  I needed a way to keep simple, nutritious ingredients for extended periods of time.  There are many options: canning, freezing, drying.  After doing some research online and weighing my options, I decided freezing was the best option for me.  By freezing vegetables and fruit, I'll always have simple, nutritious foods available to cook with.  I also can freeze leftovers and half prepared foods (such as preparing seasoned hamburger patties and freezing before cooking).  However, my freezer did not have enough space to support this kind of lifestyle, so I had to buy an extra freezer.

Life Change: Gardening

I'm lucky I have a balcony at my apartment.  I started gardening because I love fresh vegetables and fruit, but I can't eat them before they go bad when I buy them at the store.  An added benefit is that it is way cheaper and influences me to learn to cook.

"Investment": Vitamix

I bought the Vitamix 5200 Classic Blender by +Vitamix.  I've tried other blenders in the past, but they couldn't handle some food items (ice, peanuts, etc.) and they were so hard to clean.  I absolutely love my Vitamix.  I haven't had a single problem.  And you clean it by putting warm, soapy water in the blender and running it for about a minute.  So easy!

The longer I have the blender, the more uses I find for it.  I usually use it to make smoothies.  But I've made pesto sauce and peanut butter in it.  The next thing I want to make is homemade soup - it is supposed to heat the soup for you as it blends!

Eating, Cooking, and Buying Healthy Food for One

Over the past year, I've been trying to stick to a budget.  I was having a really hard time because I love clothes so much, so I thought I'd try to save some money on food (clothes > food, right??).  Also, I've been gaining weight from sitting at a desk all day.  My office also offers free breakfast, lunch, and snacks... not good.  So, I've been trying to eat healthier and lighter - more veggies and fruits, less bread and processed food.

Living alone, it is super hard to eat fresh food... it goes bad before I can eat it!  The most convenient thing for a single person to do is buy processed food, freezer dinners, and other convenience food.  It's so expensive and bad for you though.  I wanted to invest in a healthier lifestyle and save money, so I made a couple big purchases and life changes which I'll be chatting about over the next few posts (along with some awesome recipes!)

Life Change: Walking to Work

When I lived at my parents' house, I'd take the train to get to Chicago and walk 1.2 miles to and from work.  This was mainly because I didn't want to worry about transfers to a bus or el line.  But I also did not want to spend the extra $45 a month for a pass to ride the CTA on top of my monthly MetraRail train pass.  It was also good exercise!

When I moved out of my parents' house into an apartment downtown, I no longer had the expense of a month train ride pass.  Also, there is a bus that picks me up across from my apartment and drops me off across from work.  A monthly pass for CTA costs $100.  The first month I did this, but soon learned that it was cheaper to just pay per ride for my commute.  It costs about $5 a day to ride the CTA to and from work.  Assuming there are about 20 work days a month, this is only $80.  So, from then on, I started to pay per ride for my CTA bus rides to work.  In June, I started walking to and from work everyday.  The walk is 1.4 miles each way.  I'm exercising, saving money, and it is relaxing for me.

I'm hoping I can keep this up in the Winter months!  I think the money saved each month (about $80 of pre-tax dollars) will be good motivation!  That's one pair of designer jeans from +Nordstrom Rack each month :)

Goal: Healthier, Less Expensive, More Earth-Friendly Lifestyle

My first year of working was spent saving to move out of my parents house, cutting down extras to afford maxing out my 401k, figuring out my health insurance and HSA account, and paying for furniture like a bed, mattress, couch, and desk, and making a dent in my student loan.  Now that I have most of the basics figured out, I'm trying to save for an emergency fund (although some argue this should have been done before contributing to my 401k), continue paying off my student loan, and get a normal budget going since my expenses are more stable now.  My goal is to live a healthier, less expensive, more earth-friendly lifestyle.