How I Decide my Purchase Item Budget

When it comes to money, I tend to be extremely conservative with my spending.  If it’s possible to find something similar at a cheaper price point, you can bet I will find it.  This can make the process a little more lengthy than a quick trip to the store to pick out all your furnishing (which does has a time and place).  But, in the end, I find that the item is that much more satisfying and leaves me with a sense of pride that I found a beautiful piece I love that didn’t break the budget.

Step 1: Spitball a Number

Yes, the very first thing I do is pull a totally arbitrary number out of my head that I think I want to pay for this item.  This serves several purposes.  First, it gives a starting point.  Once I have a number that I can adjust higher or lower as the process continues.  I find that if I don’t start with any number at all, my budget can bounce around some extreme highs and lows.  Secondly, this number is the approximate amount of money that this item is worth to you.  In other words, this is what you are willing to pay to get that new shiny thang.  Knowing this number in the beginning will keep you grounded and prevent you from going way out of the ballpark when the item is not worth it to you or your wallet.

Step 2: Get a Feel for a General Price Range

Now that you have your starting point number, it’s time to find out if your number is remotely feasible.  For some items, you may already have a pretty good idea of their going rate.  But, I find that doing some research always adds value to my decision.  The price point may be different for the particular type of item you are looking for, or it could have changed since the last time you looked.

So, I do a quick google search for the item at hand to see what it’s going for new.  You don’t have to find the exact perfect item, just a good sampling of similar ones so you can gather a range.  After google searching, I usually try a second-hand search as well to see if I can find what I’m looking for used at a reduced rate.  Depending on the item I’ll look on Ebay, Craigslist, or Bookoo (my latest discovery!).  ‘Market value’ is a little more tough to determine on these sites because there is a greater variance from seller to seller, and sometimes they list things for next to nothing!  Still you can find a general feel for the going rate for a used item.

Step 3: Re-assess your Number

You started with an informative hunch of a number, then you researched it’s reasonableness.  Do you need to adjust now that you have more information?  I find that sometimes my initial guess was pretty close and therefore changing it would be messing with the amount I’m actually willing to pay, so I keep it as is.  Other times I realize my number is nowhere near the range that the item goes for and I have to reassess the purchase and price point I set.

If the range is lower than my original number, then Hallelujah!  This is a cause for celebration!!!  Although this is rarely the case for me (and if it happens too often for you, you may want to think about why you are picking numbers that are higher than market value) if I am lucky enough that the item typically sells for under my starting price point, I will generally adjust my price point down to the mid-high range of market value.  That way I still get plenty of variety in choice but save a little more money than I anticipated!

What’s much more often the case, is that my starting point was grossly underestimated and the only way it would ever work is by some Craigslist miracle (they do exist, by the way).  At this point, I usually reevaluate my want for the item.  Why do I want it?  Do I need it?  Why aren’t I willing to pay market value for it?  Depending on the answers to those questions I will decide one of the following:

I don’t need to purchase that item at all

At this point, I am done with the decision process, I didn’t really want/need the item that bad, therefore I will not waste my money on it

I will try and make my own for cheaper

Ok, my buying decision process is over, but now I must begin creative brainstorming on how to craft this item myself

I will find an alternative item instead

If I decide to purchase a different item to meet the same needs, either I go back to Step 1 if the item is substantially different, or just back to Step 2 if it generally functions the same as the original item.

I am willing to pay more than I initially thought

In this case, I will adjust my price point higher, but usually to the very bottom of the market value range I researched in Step 2, or possibly very low in the used range.

Step 4: Begin the Buying Process

Now that I’ve adjusted my price point according to a general knowledge of market value this becomes my top dollar.  Once I’ve decided that I should be able to find what I want for a certain price, I (generally) will not go any higher because I know that if I do, I’ll feel like I could have gotten a better deal.

But, just because I have a price ceiling does not mean that my target price is fixed at this point.  It can adjust down during my hunt for the item.  How I shop for items is a whole other post, but generally I like to explore lots of different options (used, new, Ebay, in-store clearance, sales, and more).  While going through the decision process, I always keep price point in mind.  If I find one or two items that are almost what I’m looking for at a lower price point, I like to adjust down my number.  This will definitely make the search more challenging!  But, it will also prevent me from ever overpaying on an item (which we all know is an awful feeling).

When I find that perfect item (and you better believe that price is a large factor in what makes my item perfect), I will know that I got the best deal possible…. hopefully a crazy awesome deal that I can brag to all my friends about  How satisfying is it, to know you got exactly what you were looking for, and you didn’t spend a dime more than it is worth to you? (And hopefully it was many dollars less!)  Maybe you’ve learned something for my crazy purchase price point process that can help you with future buys, that or you are judging me for my insane purchasing logic, which I own up to fully!

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Now, it may not be possible to always agree 100% on all items money related, but it is vital to come to compromises that both parties are comfortable with.  Every person comes to the table with a different view of how finances should work.  Obviously similar backgrounds on money will lead to a smoother budgeting process.  But, even couples with entirely different views of financials can find common ground and comfortable compromises that make both parties satisfied.

For instance, a husband might think that his wife is wasting money by buying ‘another dress’ for $50 that she doesn’t need, but $400 on a TV is justified because it’s a necessary expense.  Or, a wife might feel that eating out every night is a good way to spend the couple’s money because of the time and stress it saves them from grocery shopping, cooking, and cleaning the kitchen, while the husband may feel that their time is worth the money saved by cooking at home each night.

In both of the above scenarios, each spouse is approaching finances with a different view.  To prevent the clash that seems inevitable, it is important for them to agree on some baseline assumptions that will be the foundation for their purchasing decisions.

Jake and I are fortunate that we came to the marriage table with very similar views on money.  But, it was still important for us to have a discussion and set the fundamentals for how we would manage our income and expenses.  Each couple needs to come up with their own agreed assumptions.  Here are ours, I hope they will help you guide your financial discussions:

We will not spend more than we make

Jake and I both grew up knowing this to be a fundamental financial truth that we would live by.  Some people leverage debt as a tool, and we get that, but we decided that with the exception of a mortgage and possibly a car (but ideally not), we would not go into debt to purchase things.  If this means we have to wait to buy something we will!  We both understand this as a rule to abide by and budget with this principal in mind.

We will give

Jake and I both believe that the money we have was a gift.  It doesn’t really belong to us, but we are entrusted to it for the time being.  That said, we feel that it is important to give the first fruit of our labor back to God in the form of a tithe.  The first step to being freed from greed and worry in finances is to tangibly admit that it’s not in your hands and give freely.  This not only is an act of worship, but it also serves as a reminder that this money we manage is a gift to be grateful for, not to covet more of.

We will save for retirement

This one is pretty simple.  We both understand that it’s important to plan for the future, and we don’t expect any one else to provide for us after we retire (namely the government).  So, we set aside a percentage of each paycheck as savings towards our eventual retirement.

We will have an emergency fund

Here is an example of where Jake and I might have differed a little in our baseline assumptions.  While I agreed with Jake that an emergency fund is a smart thing to do, I don’t like having money ‘sitting around.’  But, we calculated how much we would need to pay our bills for a certain period of time in the case that one of us lost of jobs and put away that amount into a liquid savings account.  While I am a dying optimist (I would love to never lock our doors, be free with all my passwords, and generally believe that nothing bad is ever going to happen), Jake is a realist which is why he expressed the importance of saving enough money for rainy days. And we both have agreed to do so.

We will be honest and forth-coming about our spending

The money we make is no longer his or mine, it’s ours.  So it’s important to us that we are open about our spending.  I won’t lie and say that every time we tell each other an unexpected purchase one of us made the other is always completely understanding and accepting of it.  But, we practice grace with each other and keep the communication open so we can realistic about our finances.

We will keep a budget

Jake and I are numbers people through and through, so this is not a hard one for us.  I understand that tracking money doesn’t come as easily or enjoyably to everyone.  Each time our financial situation changes (our salary fluctuates, we buy a house or a car, for instance) we sit down and re-evaluate all the money coming in and how we will apportion that out to our expenses.  I find excel the simplest way to do this kind of birds eye view analysis.  Starting with income, and then parsing out the most important expenses first helps us determine how much we have to spend on more ‘optional’ items like eating out, clothing, entertainment, etc.

We aren’t very strict with each individual budget, rather they serve as an indicator of our financial situation and a guideline of how we spend our money.  Mint.com is a fantastic budgeting tool we use to keep track of every piece of our finances.  It gives us a great view of how we are doing throughout the month on staying within our set budgets and what we can do to improve in the months to come.  I know some people need a tighter system and use separate checking accounts (or money envelopes) for each expense.  Every month the income goes into the accounts as budgeted, and once the accounts are depleted no more spending for the month.

We will be set free by a budget

Like I said before, each of us comes to the table with different financial ‘baggage’.  We are both on the conservative side of the money spectrum and sometimes struggle with feeling some guilt with each purchase.  But, together we have found freedom to enjoy the money we have been blessed with through our budget.

A budget takes account for your entire financial situation, ensures enough is being saved and allows a prescribed amount for each expense (necessary and frivolous).  When we have allowed ourselves however much per month to spend on ‘extras’ like a nice dinner out, we can experience peace and enjoy the meal thoroughly knowing that we set this money aside specifically for this and no guilt is needed.

We will do our best to optimize our money

Ok, who doesn’t want to optimize their money?  But, for us this means several things.  If we can do something for ourselves, we will not hire out (generally).  If there is a purchase to be made, we wait for a sale.  If we can buy secondhand (and not compromise too much quality), we will.  Outside of home renovation items, we don’t spend large amounts of money in general.  We decided that we enjoy the home reno process and are investing equity in our home.  For right now, that is where we want to be spending our ‘extra’ money.  Other people may choose concerts, vacations, continued education.  But for us, that’s how we choose to optimize our money for maximum use and enjoyment.

Do we make mistakes in our purchase?  All the time.  When shopping for a bathroom vanity, we got caught up in finding one we could mutually like and bought the first one we agreed on.  Later that vanity went on sale for $100 less.  Did it hurt?  Yeah.  But, we are still learning and growing and give each other grace for the mistakes and room to try again.

I hope these help you in starting the discussion with your spouse on some fundamentals of your financial philosophy.  Does anyone else have some We Wills grounding their budgeting strategy?  I’d love to hear them and other tips you use to compromise well with your spending!

The post The Eight “We Wills” of our Budgeting Strategy appeared first on Naomi Bjerk.

Good typography will take an every day run-of-the-mill Christmas card and make it look designer.  A few simple tips can take your Christmas card type from blah to stellar!

• Pick 2-3 fonts for maximum impact.  Too many more than this will look overwhelming and unprofessional.
• Combine a San-Serif font with a Serif or Cursive font. (if you don’t know the difference, read here)  This will create a nice contrast between your words and help you find a pairing that is complementary.
• Make one (or several) words larger and more emphasized than others.  This takes your card from looking like a nice homemade greeting card, to looking designer worthy.
• Don’t use comic sans, times new roman, papyrus, or any other of the standard boring Microsoft Word fonts.  Look around dafont.com and try out some new and fun fonts!
• Play with the spacing of letters.  Adding more space between characters will definitely give your cards a ‘designed’ feel and a fun, sophisticated look.

I hope you found these typography tips helpful!  Thanks for stopping by and Merry, Merry Christmas

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How do you deal with this issue when you put all your money towards your new home and have none left to furnish it with?  I’ve been struggling with this problem myself as Jake and I have only been in our new place for four months.  I want to share a few ways I’ve been coping with new-and-empty-house syndrome and hopefully you will be able to start feeling more at-home at home.

Celebrate the Little Changes

Although many of rooms do not have furniture yet, and certainly none of them have any decorations up yet, we have been making updates and progress on the house.  We’ve painted several rooms, added light fixtures, floored a portion of the house, and removed a popcorn ceiling.  When I go into these rooms, I could choose to focus on the barren walls and the lack of furniture, or I can look in those rooms and see the fresh paint and new light fixtures.  I can focus on the color of the floor and how it complements our rug.  It’s hard not to focus on what’s lacking, but continually bringing your attention to the positives and little progresses will help you feel more at home and comfortable in the new place.

Live in the Imperfection

Sometimes I tell myself, once these rooms are decorated, then we’ll have a party and invite people over.  When I do that, I’m not living in the imperfections. That’s essentially telling myself, this house isn’t decent enough for anyone to view and it’s certainly not ‘home’ material.  In order to feel the comfort of home even in our house’s imperfect state, I need to be free to invite anyone over now.  When we welcome others into our house despite it’s imperfections we are living in it here and now and can find more comfort and peace with its current state.

Decorate Seasonally

This year as Christmas approaches I find myself wondering if we should even bother decorating for it.  We have a million and one other projects to work on in the house, why waste our time on Christmas decorations?  But, by refusing to decorate seasonally, I’m telling myself the current state of my home isn’t good enough.  Certainly there is improvement to be done, but to find contentment with my current situation I need to allow myself the time to put up those Christmas pieces.  You need to allow yourself this too!

Living in this starting phase can be tough, you long for the days when your rooms will be furnished and ‘picture worthy’.  But even though things are empty and unfinished, you can still find contentment and comfort in your new home by keeping things in perspective.  A beautiful home is curated over time, so relax and enjoy the process!

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Rid Your House of the Cat Urine Smell

The very first night we got in the house, we ripped up almost all the carpets.  The smell was so bad we could hardly breath (how did the previous owners do it??).  These carpets were way too far gone to be salvageable so in the garage they went (which now reeks too).

Notice the plug-nose-with-shirt move going on up there. I told you all it was nasty….  We also ripped up all the padding since it was fairly well contaminated too.

Getting the rooms down to the subfloor helped immensely.  And thanks to this (strangely) beautiful Chicago weather, we were able to air out the house for several weeks.  Nevertheless, some odor remained as it had seeped into the subflooring.  You can see some dark stained spots below, and they stunk real. bad.

After removing the carpet, we did our due diligence and pulled all the staples and nails, and gave the floors a good brooming.  Then, we did some research on blocking odors.  Specifically pet urine odors.  While there are several options, we felt the best one for us would be a spot type treatment, by sealing in the odors in the rooms that needed it.

Turns out there are primer paints specifically designed for odor blocking that work well against pet odors as well as smoke smells.  We read several reviews on different products and the consensus seems to be that you need to use an oil based primer.  It just does it’s job infinitely better than latex.  Even though it is definitely harder to work with as it doesn’t wash off with water, it is worth the extra work to ensure a stink-less house.

We heard great things about Kilz Original, so we decided to try it out.   You can buy a gallon for around $30 and it will cover roughly 300 square feet.  When we opened the can, it clearly needed some mixing.  But a few minutes later the paint was looking nice and white and we were back in business.

Really, the whole process was very simple and went fairly fast.  We rolled the primer onto the floor, taking special care to cover well on the trouble spots.  Jake and I alternated rolling, man what an arm workout!

And yes, I paint in flip flops.  What??

One hour later we had all cat urine subfloor covered in a coat of Kilz Original.  Which smells very strong by the way (it is oil-based, after all).  So all windows were opened, and we spent some time outside trying to to breathe all the fumes.

The first few days we couldn’t tell if the cat urine smell was gone or not because the paint smell was so overpowering.  But we eventually determined that the odor was nearly gone, but still slightly detectable in the bad spots.  So, we did a second coat on all urine-infected floors to be doubly sure to completely eliminate the odor.

And now, thanks to Kilz Original, we have a fresh smelling house!  Next up, picking out some flooring

In other house news…

We’ve been doing a little yard work.  One evening we went through the yard and pulled all the weeds and thistles that were growing around the fence and deck edges.  I kid you not, some were as tall as me!!  Then, we took some free mulch that was sitting a few houses down (our neighborhood is taking down all the dead ash trees, so sad!) and mulched around the trees and house.  Just those little things made such a difference in the yard!

Also, we’re still working on a flooring decision.  Who knew it would be so difficult??  Hopefully we’ll have a decision soon and more flooring posts on the horizon!  Now that you all know how to get rid of that stinky cat urine smell, go get yourselves some Kilz Original and make your homes less stanky  Any other tips out there on odor elimination??

A Kilz Original Review

*This post contains affiliate links*

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Let me introduce you to my good friend, confidant, and personal accountant…. Mint.com.  I may be a little biased, but this site will truely blow your mind!  We all start in different places when it comes to budgeting, but no matter how calculator savvy you are, this tool will make your life so much easier.

What is Mint.com??

Essentially, it’s a website that pulls all your financial accounts into one neat little space.  Gone are the days of adding up spending accross multiple cards and keeping piles of paper receipts.   Mint pulls the financial information from all your accounts (credit cards, savings and checking accounts, loans, and 401k, to name a few) and aggregates them together to give you a total picture of your financial state.  But, you can do much more than just view your transactions…. Mint provides extensive budgeting tools to help you stay on top of your monthly expenses as well as your savings goals.

My Experience with Mint

I cannot tell you what a difference Mint has made in my life.  It gets me excited to save money and to see the progress tracked in my account.  I’m more motivated to stay within the budgets I’ve set when I receive warning emails that I’m approaching the limit.  And, I have more peace about our future financial well-being when I look at our savings goals and see exactly what we need to do to get there and whether or not we’re staying on schedule.

Ok, clearly I am biased and love this tool, but I just want to clarify that I’m not affiliated with Mint in any way.  I’m just a passionately loyal fan!

Getting Started

Signup is extremely simple and efficient.  You will enter your email and create a password, then you will be prompted to enter your banking accounts.  Just type in its name and Mint finds the account’s site.  Once you’ve verified the account name, you will need to enter your account password and security information.

(Wait, What???  I knew this was too good to be true!!)

Hold on!  I know that sounds scary, but I researched the safety of the site in length.  First off, Mint is owned by a company called Intuit whose line of business is safeguarding sensitive financial data.  It uses a 128-bit encryption system to secure your bank information, and is monitored by three well-known and respected web security agencies.  It currently has over 10 million users, and never has access to your money (it is a read-only service).  I understand that there is still a risk and this is a personal decision that is based on your own risk-aversity (woah sorry, just pulled out the accounting lingo….).  But, for what it’s worth, I give it my fully-secure stamp of approval.

Back to the signup process…

Once you link your financial accounts to Mint, it takes a few seconds and compiles all the data into a financial overview.  On the left you should see your different accounts broken down by type (cash, credit cards, loans, investments, and property).  What’s neat about this, is the site nets all those numbers and gives you a ‘net worth.’  Let’s hope you are in the green…

In the main column you will find alerts, advice, upcoming bills, and a preview of your budget (once you’ve set one up).  This area is like your own customizable dashboard, you can put the most relevant information front and center.  Once you have all your infomation linked, your next step is to click on the transactions tab.  This will show each individual inflow or outflow of money from all your accounts.  You may notice that Mint.com automatically categorizes these transactions for you.  While this can be a nice feature and it tends to be very smart in its sorting, ultimately Mint can’t know exactly what you purchased and how it fits in your budget.  So, you will need review each transaction to the best of your ability and click in the category area to sort your purchases.  This may be tedious and not totally accurate now, but as time goes on you will find that it is a quick and simple update once a week (much quicker than counting receipts and credit card bills!)

Mint has many excellent predefined categories for you to use, or you can define your own.  For example, we created a category called “Fun Money” under shopping to use for whatever we liked each month.  It is important to note the heirarchy of the categories, as this will affect how you budget everything out.    Notice that you can edit transactions, split transactions, tag them to remember later, or add transactions (such as cash purchases).  Mint is so savvy and helpful it automatically deducts the cash transactions you enter from your latest ATM withdrawal (Neato, right??)

After you’ve fixed your categories and played around in the transactions tab, it’s time to take a look at your trends.  Here you can view your spending over time, and by category.  This is helpful to know how much money you spend on groceries each month, what percentage of your expenses come from those Target runs, that kind of stuff.  You can break the information down by account or category, or view your net income (i.e. savings) over time.  Play around to get a feel for what your financial history looks like, and start thinking about areas where you may be overspending, or could cut back.

Now that you’ve seen a true picture of your spending, it’s time to budget.  First set up an income budget with how much you expect to earn each month.  This will give you a guideline of how much you have to work with.  Have any debt to pay off?  Next, put a budget in for your debt payments.  Now, what’s left over is what you have to live off and save from every month.

Everyone budgets to a different level, and that’s what’s great about mint, you can do a very high level budget that ensures you get your bills paid and spend less than you make (try the “Everything Else” category).  Or you can break your budget down for every nitty gritty detail.  We prefer it somewhere in the middle, for example:  all of our car expenses (gas, tolls, maintenance…) go into one big category for auto expenses.  But, we break out our more personal expenses like clothing, and haircuts into deeper detail.

If you are accountant minded… you can even get really crafty with these budgets.  For instance we use our budgets to accrue once a year expenses.  If we plan to spend $240 a year on vacationing, we allow a monthly budget of $20 for vacation and select ‘roll over balance at the end of each month.‘  This is an extemely helpful way to reward saving.  If you spend less in a budget one month, you have more in the next month.

Use the “You’ve Budgeted” tool to the right to keep track of where you are as you plan out your money.  If you have leftovers, it will prompt you to set up a goal.  If you set it up with that extra amount in mind, then every penny of your month belongs somewhere.  This eliminates a lot of ambiguity in your financial life.

Now that you have a monthly plan set up, it’s time to explore your goals and investments.  The beatiful thing about Mint is that it can track the progress of all your goals!  For instance, we have a goal for a down payment on a house.  We created a separate savings account at our bank expressly for that purpose.  By linking that account to our goal we created in Mint, we are able to track our progess and project when we will meet the goal.  Hopefully you all are saving for retirement as well.  If so, create a retirement goal and link it to your retirement vehicle.  In the Investment tab you can even track the growth and change in your 401k or IRA.

Now you solve any budget dilemma.

Don’t you feel so much better now about your financial future?  You have a plan and you can comprehensively track your progess in one account (with a beautiful user-interface I might add).  So, take it one step further to ensure that this plan sticks…. Set up email alerts for going over budget or when bills are due.  Let Mint.com be your own personal secretary.

No, this is not a financial blog… although I love to talk about my thrift store finds.  I’m just your everyday DIY blogger who has a deep appreciation for a tool called Mint.  If this post struck your ‘fancee’ (haha, I’m so punny! ;)), then perphaps you’d like to hear more of my tidbits of life!  Sign up to receive little ol’ me in your inbox   Or, use this other awesome tool… Bloglovin’ to follow me and all your other awesome bloggie friends.

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Images credit: mint.com and daily worth

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