I'm cross-posting this from the other thread I started:

Well I just got off the phone with them. The 15 day billing cycle is just for this first payment since I closed on the 16th of April. When my next statement comes in it'll say 30 day billing cycle. The autopay fee is waived for the 12 payments a year option on my loan. I don't know if they waived it because I called in or not.

So I set up an automatic prepayment to principle of $125 every month on top of the miminum whatever. Since it is an ARM I'll watch it closely. Quicken has told me to send $3000 on Oct 1st and Apr 1st as mortgage gifts on top of the $125 prepayment. The $27,7000 25-year ARM will be paid off August 1st 2010.

I'm mentally ok with that arrangement. I just took advantage of a $10 special over at YNAB and bought the pro version. I've looked at that app before but didn't think I was ready. Now that I've streamline my cash flows to accomodate $725 increased housing costs I want a better mental snapshot of my cash flow. I don't quite grasp zero-dollar budgeting yet but I can feel the synapses firing. I'll be there within the month I bet. it is a very different way of thinking about cash that is for sure.

Well wow. I just jumped into YNAB and have to say ouch!

I think I've been over-spending my income for quite a while and have been in denial about it. The weird thing is, it isn't by much but even $50 overspent per paycheck will accrue to something nasty at the end of the year on a credit card.

Double sigh.

I see a future of house payments for a little while ahead of me.

I've taped to my dresser a little refrain.
Cobbled together quotes from various sources in my money blog links
and a listing of my short term goals:


*********

Initially harder, but more fulfilling, and eventually easier:
Living on last months income.

Simply take one small successful step after another....

GOALS:
Your short short term is 1st mortgage 1/2 b-day gift on Oct 16, 2007 of 3K.
Your mid-short term is as soon as you file your taxes in February 2008.
Your short term is the mortgage birthday gift on April 16th 2008 of 3K.

This will bring you a full year down the road to paying off your 25 year ARM in 3 years.
(y dos años abajo la camina aprendido Español. ¡Bueno trabajo!)

Simply take one small successful step after another....

***********


I'll leave it here as well so that I can see it at work.

How do you like YNAB? I haven't heard any reviews of it.

Thanks for asking because I've been trying to articulate it but all my friends run far away fom me when I start talking about money and budgeting these days. Between this forum and that one I feel more in the drivers seat of my finances then I have ever before in my life.

YNAB ROCKS!!!!

In a truly frightening kind of "I spend that much money on THAT!" way.... but in a great way because you can see the impact of your daily coffee habit on your car insurance payment 6 months away.

The hardest thing for me so far has been figuring out how to add into my budget 1/12 of my annual bills. I've never accounted for that monthly before and I don't have that kind of give in my money right now. But I can see how I'll be able to do that in a few months time.

Here is an example:
Bill Wizard on my PDA is how I forecast how my bills will be paid. Every year on January 12th I send GEICO $162 for my motorcycle insurance. Bill Wizard projects that into my future and I can see how much money I will have in my accounts on that date and then I move money around to account for it. But what I don't do is budget for that in May of the preceding year.

YNAB makes you account for all your annual Bills in 1/12 increments and then when they roll around there is no need to shuffle money around to account for them.

From the chatter on their forums a lot of people really have to work towards building up the buffer that the system requires. I'm really lucky in that I had that much sitting around in a credit union so I simply transferred that to my checking account and set to budgeting.

The heart of the YNAB system is a "buffer" which is comprised of last months paychecks in order to allow you to save this months paychecks. You can only live on last months money that you have budgeted into categories beforehand. The premise is that you are never broke and don't have to worry about fluctuations in income if you are always living on what you have ALREADY earned.

So the buffer is one full months income.
So I'm earning May's income and it is just pouring into my checking and sitting there.
Also sitting there is all of April's income.
April's income is what I'm paying my current bills with.
May is accruing.
And I'm budgeting for June's expenses with an eye to leftover April income instead of instantly using Mays.

Whew. It is hard to articulate though. The way I'm beginning to think of it is,

Quicken is a snapshot of yesterday.
BillWizard and YNAB are crystal balls showing me the future,
but BillWizard shows me big stuff, (credit cards and mortgages,)
and YNAB is big stuff plus all the $1 cups of coffee as well.

In fact BillWizard doesn't even use change. You can only use round dollars figures.

YNAB will show me over my budget by .11 cents.

I took advantage of a $10 off coupon he was offering so I bought YNAB Pro which is a stand alone piece of software for $29.99. It downloads transactions right from your bank so if you use a debit card you don't need to enter receipts for things. I can also say the tech support is the most amazing I have ever dealt with. I sent in a bug report and within 15 minutes had email waiting for me telling me to delete a particular font and then it worked perfectly. The only other bug I found, they put out a fix for the very next day in a members only area. No other bugs and so far it has worked perfectly on 2 different computers. I simply put my budget into my yahoo briefcase and then download it at work. The upload it again to go home.

Two thumbs way up but only if you want to see all the leaks in your money handling.

This is the personal finance software that is getting me to give up my 2 cup a day coffee habit. Hell I already brown bag two meals to work and eat effing gruel in the morning and now this software is showing me that coffee is out as well. Oh well... 2010 I am gonna host the biggest ARM burning party ever! (And it'll be potluck *&* byob because being frugal will be a habit by then.)

I've started a system on my calendar on my fridge over the weekend.

(My beautiful *free* new-to-me GE Profile that makes me feel like I live in rich middle america with a family of 6... My ham has to holler for my cheese now! YAY!)

I have 3 different color highlighters I'm keeping nearby.
Orange for "No Money Spent Today"
Blue for "Budgeted money spent"
Green for "Bad Girl! Your wallet sneezed."

Making a game of it takes the grimness away.

So far I've marked:
Saturday orange: Good girl.
Sunday it was green

(Bought two CDs online, bottle of wine to take to a party, bought two window fans that I should have budgeted for but didn't. I went and entered into YNAB an annual fan purchase every May. My window fans run year round here in Florida and get nasty filthy and I do not put on my A/C in the main house ever so I can totally justify buying annual window fans. My august electric bill runs about $95.)

Monday it was blue. Made a planned for budgeted purchase but no other spending.
Today I'm shooting for an orange mark.

Dunno if this will help or hurt but it is just one other visual representation around my house of my new financial plan. I also keep my budget posted inside my closet. And I have a couple of good thoughts tape up where I can read them frequently.

I have also started using a type of envelope system. The 3 cash flow areas I use heavily are Laundry ($17 every 2 weeks, that daily coffee habit, $3 a day but no more, and finally Grocery shopping.) I found two old credit card holders laying around and wrote laundry on the front of one, coffee on the front of another and then found an old coin purse and into that I've put all my coupons and will put my June budgeted grocery cash in there. I use a shell refillable card for my gas so I don't need that envelope since I carry a card for that.

I've decided to carry my first cup of work coffee to work with me, double bagged in a ziploc in my backpack on my motorcycle. Because I ride I've always used that to justify my coffee at work but that isn't a good excuse to spend $70 a month on something that only really costs about $20. The late afternoon cup I might still splurge on but I saved an old cup from that store and I will take it in and ask for a refill and save $2. So my coffee costs should be a lot lower now. Just $1 a day, down from $3 a day, if I can get them to keep refilling their old cup for me.

blah blah blah. I'm chatty today. I'm procrastinating on school work. Spanish class started yesterday and I'm procrastinating on painting the trim in the room where the carpet is coming. I better get to it.

I'm off to spend no money today.

My ham has to holler for my cheese now

This made me laugh!

Thanks for sharing your experience with budgeting. One of my own goals this week is to get into quicken and set up a budget using their tools. Thanks for the info on YNAB - that may also be something I look into.

Love the color coding of the calendar! I'm gonna have to do that!

I'm also doing the cash envelopes thing though it's more of an all encompassing amount for food & other fun stuff. Everything else should be a planned amount that I've figured into my budget. Last week was a bit up and down, but overall a vast improvement over the past year.

I had a good laugh envisioning the cheese in your nice fridge.

Keep up the good work!

My girlfriend has a sort of extreme variation on the envelope thing: she actually keeps separate bank accounts for many of her expenses. She has something like 15 bank accounts (most of them with our credit union, they're all covered under one monthly fee). When she had a car she used one account just for her car payments; she has another account that she uses to save for her holiday gifts, another one that she uses for utility bills, another one for dental expenses, etc. Seems awfully complicated to me, but it works for her and it doesn't cost her extra to have all those accounts.

Thanks for the support.

So yesterday I spent .77 cents: .65 on a cup of hot tea, .12 for cup of water.
I think I'll count any day I spend under $1 as a no money spent day.


$7 a week was my childhood allowance. History really does repeat itself.

(From the 10 Things I Hate About Finances on todays GRS front.)

Worked for me! YNAB convinced me to cancel my $27 per month NYT sunday only subscription last friday morning.
Yesterday at 6:60pm I get a call from the NYT: "Would you resubscribe if we cut the price by 50%?"
Why yes! Yes I would! Let your fingers do the walking and save yourself some money. Why should they get your hard earned dollars anyway?

I just bought a 4' x 15' carpet remnant for $10 off craigs list. I'll cut it in half and have two sofa carpets so that place right in front of the couches that gets stained and food dropped on it won't be on my new $582 wall-to-wall but on my craigs list rug. Plus since I'm not painting that room again, (4 coats to cover some ugly paneling,) this will break up the blue carpet and the pale blue walls so I won't feel so underwater in there.

I also had a revelation about the new-to-me $50/week food budget. I can break that up into two $25 shopping days to catch both the saturday sales and the sunday sales over the weekend. I'm 5 minutes away from all the grocery stores so going back is no chore.

And thus concludes my first week under YNAB. I brought my coffee to work everyday except one where I had lost power. My total unexpected expenditures over the week were $2.77. That strikes me as ridiculously small! My budgeted purchases were on the mark as well.

Next week I truly begin the journey under my ARM. My first payment is scheduled to be withdrawn on the 25. That will be the first of 36. 1 down. 35 to go.

One small successful step after another.

Happy Friday.

Happy to hear your first week under your new plan went super well! I look forward to hearing more and likely will steal some of your good ideas.

This is beginning to remind me of quitting smoking. The weekends are harder than the weekdays because of so much more *time* to spend money. I did pretty good over this weekend though. I used the rest of my food budget at the farmers market. I found curtain panels on sale at Walmart for $4.93 each which is pretty dang remarkable considering the price of curtains! So $30 for two complete windows: black rods, free from a friend, 4 tie backs for $10 and 4 63" Lpanels for $20. I spent nothing else beside that.

I ended up not going to baseball games over the weekend because I wasn't sure I could resist 3 hours of watching other people eat yummy stuff and I forgot to buy game food. The team lets us bring our own food into the stands which is very nice. But if I haven't planned ahead I don't have any on hand. So as not to waste the money though I make a date with my radio and a scorecard in my hammock for all games I have tickets to but which I don't make it to the stadium to see. That might be slightly more pleasant anyway since there are no crowds to fight. ¡Me gusta mucho béisbol!

Wow. A holiday weekend behind me and very very little money spent. It is getting to be a habit now I guess.

I had a 20% off coupon I used at Bed Bath & B. to replace a broken laundry hamper, and I decided to buy a fork so that I don't have to keep buying plastic forks for my desk. $1.60 for a fork and a $6 new ceramic bowl for my desk because my tupperware is nasty from microwaving in it. I splurged on the bowl. It is pretty! Pretty is occasionally allowable on this budget dammit! I kept thinking of all the advice to budget for fun too....

I also got talked into going to a yard sale and bought a floor lamp for $15 and a giant rug for under my dining room table for $20. And altho the rug and lamp weren't budgeted, I'm ok with the purchases because I needed both but hadn't found anything I could afford yet.

I did laundry this morning, taking advantage of the $1 double loader weekday specials they offer. I only mention this because it is one of the cash flow things I never budgeted before and now that I'm using the YNAB budget software I track it. $12 for 5 loads to wash and dry. 2 weeks from now it'll only be $6 because I have enough towels to do them once a month. $18 per month for laundry. That's acceptable and more importantly it can be maintained for the 39 months of the ARM.

I'm curious why you have your laundry done by a service and don't have a machine of your own? You're paying $216/year to have your laundry done. A new super-efficient front-loading washer would cost about $1,000 (you can get 'em for less), which would make it cost-effective after five years, although if you also buy a dryer it would take longer to make financial sense (especially because dryers make your energy bill go up considerably). But those appliances last a long time, usually more than 10 years, plus it's more convenient to have 'em at home.