Monday, May 17, 2010

Suggested Questions for the Always Broke

Yahoo Finance had the article, 8 Questions for the Constantly Broke, and I thought they were worth rehashing.  Here's their questions and my take on them:

1.  Do I know where my money is going? 

I do believe that the first step of getting finances under control is to keep up with what you are spending your money on.  If you don't know what you are spending on, how can you cut the fat?

2.  Am I focusing too much on the month, instead of the year? 

The point of this question in the article was to suggest keeping up with one-time annual expenses as well as normal monthly ones.  That's a great idea.  We started our car and home maintenance fund after being "surprised" by our homeowner's insurance the year after we bought our house.  We haven't ignored annual expenses since then.

3.  Do I do something everyday that wastes money? 

Daily habits like soda, lunches out, beer, smoking, etc can all kill a budget.  My hubby cut back on soda when he realized how much money and calories were being wasted.  I started saving a ton of money for us by starting to bring my lunch to work this year.  I'm so proud that I've only eaten out three times for lunch in 2010.

4.  Do I know my own weakness? 

For us, this falls into the same category as daily habits.  My weakness was eating out and I still have a slight addiction to Shirt Woot.  My husband's weakness is hobbies...we started fun money accounts so we could see exactly how much hobby spending was costing.  Now he balances his hobbies with a set amount of money so our monthly budget isn't messed up.

5.  Am I saving too much? 

The point of the article was that if you have high interest debt, you shouldn't be saving more than makes sense - receive the maximum company matching on your 401k, but funnel the rest towards the debt.  I completely agree since high interest debt sucks money out of your wallet faster than a vacuum cleaner.

6.  Is my relationship hurting my bank account? 

I know that love isn't controllable, but I do think you can choose some habits to be attracted to.  My husband and I both agree that part of our attraction was the fact we had similar of those is fiscal responsibility.  We just wouldn't be as close if we didn't hold the same goal to save and have a comfortable early retirement.

7.  Are the big items dragging me down? 

The big expenses really do hurt the most.  Even if you cut as many small expenses as possible, that probably wouldn't come close to how much you spend on a mortgage, car, health, debt, and grocery payments.  Our largest budget cut was our food bill this year.  Eating at home more often is actually saving us more than $2400 this year alone since we successfully cut $200 off our monthly food budget.

8.  Am I wasting money by carrying debt? 

As I mentioned above, debt eats money.  The less debt you have, the more money you'll have for things you choose in life.

In short, this article seemed spot on to me.  What do you think?  Would you add anything to this list of questions?


  1. Budget - I admire your restraint in only eating out for lunch 3 times this year. Lunch out is my social life, so I would be considered a hermit if I didn't get out some at lunch! Good for you. That is definitely where I am running our budget into the ground.

    It is so true about how sometimes people do not account for those annual expenses. For me, the kid's sports camps eat into our budget. I have to account a certain amount each month for that, even though the camps all happen generally in June/July. Even things like property taxes can come back to bite you if you do not have an escrow account and then you suddenly have to cough up $4000. Always best to smooth those expenses over the whole year.

    Liked the post!

  2. Great article. I feel I should pass it on to a few friends and family. But unfortunately, I know they would take offense instead of asking themselves the questions, then doing the work.

  3. Great find. I love questions that get people to think. Too bad the only people who read them are the one like us. People focused on having a better financial life.

  4. Excellent questions. What is key is that you must ask them of yourself. I've noticed that when I ask similar questions of people who ask ME for advice, they are resistant to everything. Can't be frugal till you are ready. And you can't be frugal for other people.

  5. Everyday Tips, skipping lunch with friends became a non-issue when they laid off pretty much everybody I ate lunch with. Now I enjoy taking short lunches as my desk and leaving early.

    Yeah, we’d be up the creek if we didn’t fund our property tax account every month. I just started a Pet account since Pugs require so much more maintenance than I thought. I was just “absorbing” pet costs like food and vaccines, but now they will have their own ING account like everything else.

  6. Young Mogul, Jeff, and Frugal Scholar, I agree. A person has to choose to ask themselves these questions and hop on the road of personal finance. I always worry that all personal finance blogs (including mine) are preaching to the choir. I hope that a few “lurkers” may actually find posts like these helpful.

  7. I could save so much money if I ate out less. But...I don't. And I think I'm gradually becoming ok with that, as long as my eating out doesn't become even *worse*, and I don't eat fast food. Still I do often think that money could be put to better use.

  8. Jackie, I know how you feel. Even if I do start eating out for lunch every once in a while, I won't beat myself up. I'm good with where we are now. :-)