My Money Story-Ignorance & Denial, Enlightenment & P

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Posts: 26
Joined: Mon Oct 15, 2007 7:52 pm

My Money Story-Ignorance & Denial, Enlightenment & P

Postby CHB » Mon Feb 25, 2008 8:30 am

I'm starting this journal because I've been obsessing too much about my finances. At first it was a good thing - Over the past three years I've steadily paid more attention and learned so much about money that I'm astounded on a daily basis at my vastly improved fiscal fitness. There are a few things that I still need to learn more about, mostly related to investing, and I hope this journal motivates me to do so. But I've reached the point where I feel like it's a waiting game - I'm 26, and have outlined a plan to be financially independent (or semi-retired) at the age of 50. I know what career I want to pursue and have a good idea of when I want to pop out kids (I'm already married). So at this point I think I need to start letting go of my obsession with personal finance, which mostly consists of devouring pfblogs and tweaking my budget and tracking my expenses way too much. I feel this is also detrimental because I believe in flexibility and an "anything can and will happen" attitude, and I hate the idea of over-planning. I've toyed with starting a blog of my own but the only thing holding me back is my low self-confidence, which is another area of improvement that deserves its own journal. I'm going to talk in "I" more than "we" for now, because I still need to talk in-depth with my husband about these goals. Fortunately we have the same money-personality so we rarely disagree on finances, but I really need to sit down and have a conversation with him about these long-term goals that I only just created a few months ago.

Basically I want to enjoy the fruits of my labors, which means more time to not ruminate and read about money. I hope by "letting it go" on this forum, this will start to happen. At the same time, there are challenges ahead that I want to record & examine for my own use, and anyone else who may be going through them (although they're not unique, I have yet to find a pfblogger who is in a similar situation).

Here is my situation (trying to be anonymous, but as specific as possible):
Location: Medium-sized city in Southeast U.S. (Moving this summer to large Northeast City)
My Career: Education field, plan to earn M.A. starting this fall thru 2009.
Spouse Career: Currently earning M.A., unsure of future career
Current income: ~$3352/mo
Current expenses: ~3000/mo
Current Debt: ~27000 in federal student loans (hoping not to acquire any more as I earn my M.A.)

Basically I'm prepared to live the rest of my life earning a very modest income, but also living very frugally in order to save as much as possible and become financially independent. I never want to stop working, but I want to stop working for a paycheck as soon as possible.

Thank you J.D. for providing this wonderful website and forum!

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Location: Woodstock, CT

Postby DebtFreeCrusader » Mon Feb 25, 2008 3:43 pm

You've got a game plan plus resources

good luck

When you're good to others, you're best to yourself - B. Franklin

Posts: 26
Joined: Mon Oct 15, 2007 7:52 pm

My Money History

Postby CHB » Wed Feb 27, 2008 1:23 pm

The best thing I've got going for me is my frugal genes. My parents taught more by example than by explanation how to live within their means. But I couldn't help noticing as a child that we seemed to be the only family with one car, a tiny house, and no annual vacations to Disney World. Unfortunately, along with the frugality, I took this habit of comparing myself to others and feeling inferior about something I really had no control over.

My parents did many things right for me financially - they gave me a reasonable allowance, opened a savings account, and encouraged me to work as a teen and save for things I truly wanted. But they also shielded me from other things about money. They encouraged me not to look at cost when choosing a college, saying not to worry, they would take care of it. What I didn't realize was that myself, along with them, would be going into debt based on my college choice. Throughout college I never really understood much about credit, interest, loans, debt, and investing, but at least I knew how to budget. My parents wisely helped me open a credit card and kept a close eye on my spending, which was usually on groceries, books, or a meal out here and there. But I managed to get through my entire education without realizing that the paperwork they asked me to sign each year meant that I was $17,000 in debt. I had never really talked about money with anyone, and therefore I was a little afraid of it.

After graduating, I wanted to work for Americorps for 1 year, and I wanted to be financially independent of my parents. Unfortunately these goals didn't mesh, since I made a $10,000 stipend in an expensive Northeast city. But I was proud of the fact that my parents only financed my car and car insurance for me that year, and arranged for my student loans to go into forbearance for me. Everything else I paid for with my stipend, credit card, and food stamps. After that year I had $1500 in credit card debt, the auto loan my parents had co-signed for my $3700 crap car, and the student loan debt that I was still in denial about. My parents just kept telling me they'd take care of it. I let them, gradually feeling more guilty about it, but still allowing it to happen - even after getting at least one notice from a collections agency (I didn't really know what it meant at the time).

The thing that changed everything for me was getting a job in college financial aid. As soon as I learned of the opportunity, I was opposed because of my aversion to money management and math. But like most people who end up in financial aid, I needed a job. It was only then that I started to truly acknowledge my student loan, car, and credit card debt, and that it would take quite a while to pay it off. I gradually started taking over student loan payments from my parents and educating myself about other aspects of my financial life, such as retirement plans, high-interest savings accounts, and my financial future. I was able to pay off my credit card, pay off the car, and help pay for my wedding within two years, on my still-not-huge $30,000 salary.

If I hadn't gotten a job in financial aid, I don't know where I'd be now. I always knew I was good at saving money, but I always spent it in the short-term, never really thinking about the future, or the benefits of living debt-free. My husband was the same. Personal Finance blogs have largely educated me on everything, but it was my job that truly made me aware of the problem in the first place.

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Joined: Mon Oct 15, 2007 7:52 pm

The present - constant anxiety!

Postby CHB » Thu Feb 28, 2008 8:30 am

I woke up at 3:00am and couldn't sleep again last night, because I was worrying about money. I know I shouldn't, I know I'm in a much better position than so many others, but I've worried all my life and old, bad habits die hard. What do I worry about?

Mostly, I worry about the "big" stuff - when will my husband and I be able to afford to have children? Be able to afford a house? Pay off our student loans? When we have kids, how will we decide if one of us should stay home, or both work?

There are a lot of short-term worries right now too, mostly based on our upcoming move across the country and my decision to get a MA in an education field. I've wanted this particular job for the past four years, which requires a particular degree. It's the only job I can ever imagine myself doing when I think about my "perfect" job. But, I know that there's a high chance it will burn me out, and it does not come with a very high salary or promise of raises. My husband also seems to gravitate towards fields of work that are not high-paying. The fact is, deep down I really feel proud of this, and I wouldn't change a thing. But after reading so many pfblogs all the time, I still think about how worth it it could be if I skipped the expense and salary loss of school, got a crappy but high-paying job, and worked for only 15 more years as opposed to 25? I really don't want to do this, but I still worry if I'm making the best decision.

And I worry about things that I have no control over. The latest thing is peak oil. Two days ago I watched a documentary and then scoured the web learning about the upcoming predicted oil crisis. Now it's all I can think about. I won't go into too much detail because I think I've been brainwashing myself, but I also believe that these predictions will happen in my lifetime, and most certainly affect my children in a BIG way.

When I worry, the best thing I can do is distract myself, either with humor, friends, or the outdoors. I'm doing my best, but times of transition are really difficult. We've only lived here for two years, and I feel like I just got over the stress of that move. Now we're doing it all over again.

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Joined: Mon Oct 15, 2007 7:52 pm


Postby CHB » Fri May 23, 2008 8:10 am

Finances have changed a bit since last update:

Our take-home pay has gone down due to signing up for an HSA, Dental Plan, Vision, and adjusting my W4 to try to prevent another HUGE TAX BILL ($2043, or 5% of our '07 take-home pay). Along with these expenses we have been forced to repair our car (~$1500) and chosen to invest in fixing our teeth (~$4000) and checking our eyes/updating our eyeglasses (~$1000). Because of these expenses I can no longer avoid student loans for my first year in graduate school, starting this fall. I'm not very upset though, since I see these expenses as totally worthwhile. (though the tax bill was a dumb, avoidable mistake on our part).

We're job searching for my husband and have no idea what salary to expect. As usual I am expecting the worst and hoping for the best, because the worst will put a huge pothole in the road to our financial and life goals. But I don't want him to take a miserable job so I would never push for a job for a salary only. I also plan on working part-time but would like to find a job close to our future apartment, which is also unknown right now. It's driving me crazy to be on the brink of so many life-changing events!

I still dream of starting a blog and have basically set one up, articles and all, but just can't take the leap to publish and come out of the personal finance blog closet. I'm so scared I'll let myself down by not keeping it up and maintaining quality, therefore letting any readers down too. Some days I feel like I would have so much to offer, and others I feel like I would be useless and just confuse people.

We're taking a mini-vacation this weekend, which will be a wonderful break since I always ease up on my saving self when I travel. In other good news, I guess here is a good place to brag since no one will see - I smile every time I hear news about how bad gas and grocery prices are, because so far THEY DON'T AFFECT US!!!! We don't use our car to commute, we only use it for errands and leisure travel, and I had built up a great stockpile of groceries that we've been using up the past few months and only buying supplementary items. Now that the stockpile is dwindling, I still wonder if I will be affected by prices since I always seem to find great deals using my coupons and flexible shopping and cooking habits. I just love knowing that these two "budget busters" have practically no effect on our own budget!!!! YEEHAW!!! I ROCK!!!!

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Location: Deep in the heart'a

Postby Gnashchick » Fri May 23, 2008 9:14 am

CHB, Congrats on keeping your budget-busters well under control.

I read an article last year on MSN Money (by Liz Pulliam Weston) about how a fully stocked pantry is just as important as a fully stocked emergency fund. Having a stock of staples, and the know-how to use them, can go a long way in keeping high grocery prices from affecting your budget.
Steal what works, fix what's broke, fake the rest

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Joined: Tue Apr 01, 2008 2:35 pm

Postby anomar » Fri May 23, 2008 10:48 am

Have you read Your Money or You Life yet? The book addresses a lot of the same concerns and tensions about living and the relationship to money that you highlight in your posts...

Posts: 58
Joined: Mon Jul 09, 2007 1:14 pm

Postby radioheadok311 » Mon May 26, 2008 11:29 pm

Just in regards to peak oil. I wouldn't worry too much about it. The American consumer has been pretty flexible in finding alternatives due to insane circumstances. I look at the economy and I get a lot of anxiety/depression, but when I really step back and look at things, I try to focus on what I can control as opposed to what I can't (i.e. peak oil). If you are really worried about oil inflation to your lifestyle, I might recommend investing in a fund that gets you long oil (though with oils run right now, who knows where it is going to go).

Regardless of what you do, just remember that doing something (as you are) is always better than doing nothing.

I wish you much success.

Posts: 26
Joined: Mon Oct 15, 2007 7:52 pm

So far we're jobless but not homeless...

Postby CHB » Fri Jul 11, 2008 9:19 am

Countdown 21 days til our 1226 mile move, and we found the perfect place to live but are so far jobless. Spouse hopes to hear about a job offer today, and I had an interview this week for an awesome internship. But I'm a very nervous interviewer - I think I answered the questions well, but my overall phone demeanor was not strong, to say the least. I'd rather interview in person.

A quick brag about our new apartment - it's on the low end of average for our very expensive area, for a pretty 2-bedroom, re-done kitchen, including a dishwasher and huge W/D in unit, with two fabulous porches! Plus it's only a five-minute walk to public transpo, 10-minute walk to cute little beach, and 15-minute walk to my school. I can't WAIT to move in, but I hope we have incomes so we can buy not just groceries but decorate as we please! (For me this means buying things at thrift stores and craigslist and maybe IKEA, but we'll get at least one couch new and delivered because we don't want to deal with the possibility of bedbugs and the job of getting it to our apartment ourselves. Our current couch, which we are leaving behind, was bought at Habitat for Humanity and we love it, but our pest control guy warned us that bedbugs in used furniture is becoming a huge problem...)

So I've been having lots of mini anxiety attacks over jobs. I know we'll find them, since the area has lots of openings and opportunities, but I worry whether they will pay much or be tolerable - and I just hate being in limbo! I hope to update soon with concrete, happy information.

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Joined: Mon Oct 15, 2007 7:52 pm

Postby CHB » Fri Jul 11, 2008 9:32 am

Wow I got comments on my posts! Thanks!

Gnashchick - Thanks! Our current goal is to use up as much food as we can before we move, because I only want to pack our spcies and throw away as little as possible.

anomar - YMoYL is one of the most important books I've ever read, I love the values and goals they encourage. I do try to live my life and think about money that way, I think everyone should read it! Though I dislike the "New-Agey" vibe it gives, I think that discourages some people from reading it, and is holding me back from making my spouse read it!

radioheadok311 - yeah I tend to get a little too worked up about speculative, conspiracy-theory, apocalyptic predictions of the future. I should just indulge in more fun fiction reading and focus on the problems that I can actually control in my own life!

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Joined: Mon Oct 15, 2007 7:52 pm

After the move

Postby CHB » Mon Oct 13, 2008 1:12 pm

I should be getting my first paycheck of my new job today! I'm so happy that we've successfully moved into our great apartment and both have jobs now. It took me a long five weeks to find employment, but in terms of pay, benefits, and security, it's the best opportunity for me right now! Now my spouse and I are making the most money we've ever made as a couple, which is still not too much, but it finally feels like we're getting somewhere!

School is just ok for me. I don't really enjoy it, I'm only there as a means to an end. The good news is that I think my employment will help me pay tuition, which is WONDERFUL.

Unfortunately we allowed ourselves to use up the entire $5000 student loan that we took out in case of "emergency." Most of it was used for the move-in expenses and household decor (definitely not an emergency), but a good chunk was used for our dog's unexpected medical expenses after our move. Fortunately she's doing well but I'm so glad we had the money available and didn't have to worry about leaving it on a credit card.

So with our new finances, the rough breakdown is that we're bringing in $3900/month and have planned expenses of $3600/month, $2300 of which is necessary expenses. It's so nice to have "extra" even after planning for savings, when in the past I would always just use any "extra" as savings. (not a great idea in general, but it worked for me).

First we plan on using extra money to pay off the $5000 student loan, which will hopefully take just 6 months if we concentrate on it. After that I just want to sock away as much as possible in general savings. I have a plan but my plans are really flexible, so I look forward to seeing how it works throughout the next few months.

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Joined: Mon Oct 15, 2007 7:52 pm

Hoping to stabilize soon

Postby CHB » Sat Jan 10, 2009 10:48 pm

I have such a great plan, but emergencies keep getting in the way! Our dog faced significant health issues this fall totaling about $3000 (but completely worth it to us). Our car has also been giving us repeated problems. I'm so tempted to sell it and use zipcar, which is widely available in our area, but hubs is not into this idea. We also spent a chunk clearing up bills with a horrible dentist we used last January who never bothered to file the insurance crap on time. I've also made a few mistakes that lost me money, including dropping my laptop on the ground. Oh and we had to fill in our scant winter wardrobe, which we purged when we moved to Florida two years ago, planning to stay for six but returning north this past August. Therefore we have not made progress on the $5000 "student" loan used for moving expenses, though I hope it's gone by the end of this year.

A darker side to this story is that we have been just plain spending too much on "wants," including a flat screen tv (got it for a great deal!), and multiple sports-related tickets/paraphenalia. (It is hard for me to write "we" here). We planned for the tv for the past six months, but we really should've tried to hold off until we paid off our dog's bills. (If it were up to only me, we would have no tv and no cable, and would save hundreds of dollars!!)

Also in store for 2009, we hope to put at least 200/month into a Roth in my hubs' name, since he has no retirement account yet. I hope to be able to start affording my entire tuition bill by the summer semester, although I will continue taking out as much subsidized loan money as possible to set aside and collect what little interest I can until it's due back to the feds. I really REALLY hope our lovely unexpected bills stop flying at us.

This fall we also signed up for an American Express Blue card, which offered 0% APY/R whatever for 12 months. We're "paying" it off "in full" each month thru our ING savings (of course paying Amex the minimum), but are running behind. No problem yet, but we better get our act together when the 0% runs out this September and we pay it back for real

I am really excited to start truly saving money again (I hope), which we seemed to do so well for a while, until we moved and have been constantly dropping money out of our pants since. But I feel like we have our pants under control finally, although we're also going to try to get them to fit a bit looser this year.

Current monthly income: $4000
Current monthly budgeted expenses: $3500
Leftovers: Retirement, School, Short-term savings
Debt: ~36500 (student loans, will fluctuate largely for the next two years, then hopefully disappear in 3-5 more)
~4000 behind in Amex (yikes, this is kind of a lot - but we have until September before it actually costs us!)

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Postby CrankyBolt » Sun Jan 11, 2009 12:12 am

why did you open up a credit card even if it is 0% apr?

If you notice that emergencies keep getting in the way, then all that card is going to do is cause you serious problems. I'm not sure if you notice this or not.. but for my wife and I something bad seems to happen to us pretty much the same time every year.

For us its Nov. / Dec. Every year, something happens that forces us to need a financial back up. For one of my friends its every March / April, and another is in the summer.

Second, I understand that it may be nice to put money away into an IRA and 200 seems like a good idea, but you are doing the interest rate balancing game with student loans... that can turn sour very quickly.

Instead of investing into an IRA fully this year.. why don't you make sure you get your credit card in order and build up a decent emergency fund. This way you continue with your plan and not have to worry about a catastrophe?
"Look, the people you are after are the people you depend on. We cook your meals, we haul your trash, we connect your calls, we drive your ambulances. We guard you while you sleep. Do not... f*** with us. " --Tyler Durden

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Postby CHB » Fri Jan 23, 2009 9:42 pm

Cranky Belt, thanks for replying and the feedback!

We opened the card because we wanted better rewards. We had a citi rewards card that we've paid off every month in full successfully for 2+ years and enjoyed many rewards, including two free plane flights, free hotel rooms, and $200 in student loan rebates. But it was only at 1% back, and I had been doing extensive research into a better card for us - which turned out to be the Blue card. We put all expenses we can onto the card in order to get the rewards. One thing our recent high expenses have made me think about is to switch to only our bank account/debit card for a few months. But it would kill me to miss out on the rewards!

I have to admit, since I am a student, in the back of my mind I see taking out more student loans (6.8% federal only, never private or higher interest grad PLUS!) as my true emergency fund if something horrible happened. Which I know is totally unreal and stupid!!! But I really struggle with my want to save for retirement/financial freedom, which I know is a long way away, but everyone says the MOST important thing is to start early, right? I'd feel really bummed if I completely stopped contributing to retirement/FF. I know the math doesn't always add up, but for me, psychological impact of my financial choices means a lot. Maybe a good compromise would be to put just a little itty bit ($25-50) into retirement and use the rest to build up our emergency fund? But I feel like in the current market, that money would just *poof* away.

I also like to lump my savings together instead of separate it into sub-accounts (I like the big number!), so another choice would be to keep this retirement savings in my regular savings, therefore it could technically be an emergency fund, but psychologically, I could tell myself it's really there for retirement. Hmmm, after writing this it doesn't make sense, but it does in my head I swear!

Just for real numbers reference, our current combined student loan debt is $27000 at 5.3% interest which we're paying the least on each month, $5000 at 6.8% that I want to knock out in 1.5 years, and $8500 at 0% because it's subsidized and I'm still in school (will be 6.8% after school in 3 years). I currently have $9400 in a 403b (formerly $10400, but not so sad since most of this money was "free" from my employers anyway). I have been playing with my homemade spreadsheet re: paying off all this student loan debt vs. saving for a house over the next 6 years. At first I thought, save for the house, but now am leaning towards knocking down the loans!

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Joined: Mon Oct 15, 2007 7:52 pm

Comparing monthly average 07-08 expenses

Postby CHB » Sun Jan 25, 2009 11:33 am

I'm thinking of writing more in here, mainly to practice writing and help with my accountability. In my first post I wrote that I wanted to use this as a way to stop obsessing about money, but that hasn't happened so far.

I love seeing people's actual expenses, so I thought I'd share mine here:

2007 2008

Groceries $337.62 $331.52 I'm proud of my grocery shopping and cooking from scratch skills, but I still want to get this lower!
Home $197.05 $342.55 We have to get this down. We went a little crazy when we moved in '08 with a new couch, futon, and tv. I don't know why
so high in '07, I think I just wasn't paying attention.
Dining $148.21 $81.34 Wow, I can't believe the improvement here! I don't even remember trying so hard to lower it, but we did a good job!
Rent $677.27 $841.78 In 2007 our rent was $675/mo in a low cost town, in August '08 we moved to a $1200/mo apt in one of the most
expensive U.S. cities.
Car-Gas $62.94 $85.05 We don't drive much, so the year of ridiculous gas prices didn't affect us too badly.
Car-maint. $78.43 $318.56 2008 was a bad year for the car… new fuel lines, tires, brakes, etc.
Car-Ins. $59.08 $72.10 In 2007 it was $650 annually, as of Aug '08 it's $1250 annually.
Water $21.45 $15.44 As of Aug. '08, water is included in our rent.
Cell $67.87 $105.19 We upgraded our phones and our plan in '08, but we also went WAY over our minutes for two months without noticing.
Electric $58.76 $70.97 Hope we can get this lower!
Int./Cable $78.94 $100.01 More expensive where we live now.
Heat $0.00 $42.66 Aah, the south…
Clothing $0 $67.21 I didn't track clothing expenses in '07, I worked them into our individual "allowances". But I changed my mind in '08.
Giving $17.58 $22.58 Glad to see this went up, trying to give $25/mo for now.
Travel $433.22 $143.46 We went a little crazy in '07, but mostly because of far away family and weddings (and a cruise, hee hee!)
Health $19.47 $332.78 We had a terrible dental experience in '08. It was the first year I had an FSA, but it was grossly underestimated.
Sallie Mae $72.29 $85.52 Upping our payments here, but not by much!
AMS $117.73 $104.06 I paid off this loan in December '08, yay! Instead of snowballing it into the other, I'm using it for current tuition.
Entertain. $71.51 $82.82 This includes mostly alcohol and movies, museums, etc. I'd like to see it go back down to $70, but in our new area $80 is
more realistic if we want to be social.
Dog $118.54 $351.63 As previously mentioned, our dog had a lot of health problems in '08. We really hope this goes down!
Gifts $95.55 $62.82 I knew we spent too much in '07, and I think we provided the same quality of gifts for less in '08.
Education $160.92 $276.20 In '07 this was for my hubs' books and fees, as his tuition was free. Now he's done and I'm paying in full for everything.
Hub free $ $157.78 $353.08 "Free $" is short for allowance. :) I can't briefly explain the '08 amount, but it's going down!
My free $ $196.83 $200.36 I'm surprised at how consistent this is. I would like to come down to $150/mo.
Personal $47.99 $52.00 Mostly drugstore and haircuts. I tried to cut spouse's hair for a little while, but I just got too freaked out!
Transpo $0.00 $56.00 Public transpo (bus) was free in our old town w/ a university ID. The '08 number is only an average from Aug-Dec and it
should go down thanks to employer subsidy.
ATM $0.00 $11.83 This is cash that I just can't account for. I hope this category disappears!
Moving $0 $296.16 This is misleading - we spent a total of $3553 in July/August for our moving expenses, which included security deposit,
realtor fee, last month's rent, truck, gas, and hotels.
Other $157.03 $217.18 This is huge and I hope it goes away. It's mainly a big, overdue IOU in '07, and our ginormous tax bill in '08.Ideally, it
should be things like parking tickets and bank fees.
Total $3,454 $5,122.86 Fortunately, most of this difference was paid for by savings we built up through '07 & early '08. However we still didn't
save as much as we ended up spending after our move.

So it looks like we could drastically improve expenses like our allowances, cell phone bill, home decor/maintenance, and the "other" category. (We fixed our withholding as soon as we got the tax bill). Categories that could always be improved but I'm not worried about are groceries, electricity, dining out, gas, travel, & entertainment. These are the main areas of life that I try so hard to be frugal in, and I know I can always do better, but I think I do a pretty good job. Expenses that I HOPE go down but we have no ]control over are car maintenance, health, and dog. Finally, expenses that have permanently gone up due to our move include rent, car insurance, and heat. Also education, since I chose to go back to school.

I just love seeing these concrete numbers. It took a lot of startup effort to begin tracking my expenses, but I can't imagine not doing it now. It's addictive for me!

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