Getting Back Into the Black

My wife and I were going to the farmers market the other day to pick up our weekly supply of fruits and vegetables. We prefer to utilize the farmer’s market for these items since we know the items are grown locally and usually taste better than the store bought equivalent. Along with the fact that its usually cheaper, it is just a trifecta of benefits.
Getting back on topic, the only downside to the farmers market is that its a cash only interaction. As we pulled up to the parking I realized I did not have any cash on hand. I set about trying to find an ATM. Normally, anytime I need to get cash out I will either take out extra cash during a grocery store purchase or stop at the ATM at my bank. I ended up going to a small corner market to use their ATM. $1.75 ATM fee later and I had my $20 to spend on fruits and veggies.

Ever since we’ve started living under our budget I’ve really started watching every penny that goes in and comes out of our accounts. I was shocked after a few days when I see a $2.00 charge pop into my online banking application as an ATM fee for using an out-of-network ATM. $3.75 in charges for withdrawing $20 of my own money.

That is an 18.75% charge for withdrawing my money.

I know a lot of people that withdraw money from the ATM regularly, and if they are not using their own bank’s ATM those charges can add up quick. Talking with a friend and showing this to him he realized he was spending $20 a month on ATM fee’s alone. That is $244 a year he’s paying to access money that is already his. I don’t know about you, but I can think of a lot better things to do with $244 a year than pay fee’s to access my own money.

A few ways to save yourself from those fee’s:

1. Always use your bank’s ATM or in-network ATM’s. You can usually check your bank’s website to find out where their ATM’s are located.
2. Use your ATM card to make a purchase at a store and then withdraw extra cash at the time of paying.
3. If its possible, write a check!
4. Plan out your cash expenses every week. Take out enough cash on the weekend to cover any expenses you may encounter where paying with a card is not an option during the week.

The first step for my family to get our spending under control and to start saving money was to determine where our income was being spent. It took about 2 hours total to get all of this information and then get it down into an easy to read format.

1. Calculate your income after taxes, this includes any paychecks you receive along with any other sources of income.
2. Make a list of all of your expenses. Anything you spend money on monthly needs to go on here. examples: rent/mortgage, gasoline, insurance, online services, groceries, dining out, etc.
3. Take all of the expenses you have written down and divide them into two categories. Discretionary (you dont HAVE to spend this money but you do) and Non-Discretionary (money that has to be spent: groceries, rent, gasoline, etc)
4. Add up your monthly expenses and subtract that total from your monthly income. If you end up with a positive number then you are already on the right track. If you have a negative number, you are spending more every month than you make and are forcing yourself further and further into debt.
5. Make adjustments to your spending to increase the surplus you have after all your bills are paid. This may include not stopping for a latte every morning or reducing the amount of channels on your cable bill to get a lower bill, or even something as simple as taking food to work for lunch instead of dining out every day.
6. Lastly, you want to make sure you review your budget every month. Keep track of your expenses for a month either through your bank’s online services, a notebook, or whatever system works for you. After a month of living on your budget, compare your actual expenses to projected expenses and see what area’s need more work.

Once you have yourself trained to live within the budget you have created you can start planning how you are going to save your surplus and what goals you want to set for yourself.

I have several financial goals I want to hit before the end of the year. 

 My #1 goal is to pay off at least half of my truck balance.  Its at a 10% interest rate and is not due to be payed off until 2011, if I can keep up with my aggressive payment schedule (an extra $2400 - $3600 this year) I can get it payed off by 3rd quarter of 2009.  It would save me about $800 and cut my loan term by almost two years.

My other goals are:

Emergency Fund: 4000
I’ve never had an emergency fund because I never knew I needed one until I set out to to take control of my finances.

New Baby Savings: 3400
My wife found out last month that she may be pregnant.  We’ll get the official word from the doctor next week.  In anticipation of that, I am putting the money directly into an ING savings account at the beginning of every month.

 Every other dime we have will be going into a savings account for our first home purchase some time in the next 3 years.  I need to start rebuilding my credit score before I can apply for a home loan, so I figured I may as well be ready once my score is where it needs to be.

Freemoneyfinance.com has a great post up about several of its users spending a little time to save money from Comcast and DirecTV.

• Not only will I save $360 this year…
• So basically I “saved” $390 for about a hour of my time…

I had a similar experience last month. Comcast wanted to raise our bill from $55 (after tax) to about $80. I tried calling their customer service center but didnt really get any offers I wanted. So the next day I took the box into the local office and asked them to cancel. Within 10 minutes I had a very nice woman offer me their intro package for $30 a month for a year, including free HD and free DVR service. Taking 20 minutes out of my day actually saved me over $500 a year!

Does anyone else have any similar experiences?