The One Way Our Christmas Budget Fails

We have most areas of our Christmas budget down to a science.  Saving is pretty easy.  We estimate our spending, divide by twelve, and set aside an equal amount each month.  That works out great.  Sticking to the budget works, for the most part.  But there is one area that we still can’t get right.  Tracking our spending is the one area where the Christmas budget fails.

I Can Track Just About Anything

Every year, when Christmas shopping starts, I start off filled with hope. For what, you ask?  Well, hope that I can finally get the tracking down to a science.

This should be pretty reasonable, after all, considering I have a pretty solid tracking system.  I have a spreadsheet where I track all spending.  Want to know how much we paid for electrical service in 2011? I can find that out.  Curious about what our new roof cost back in 2013?  I can track it to the penny.

But what did we spend for Christmas last year?  Well…..that all depends.

Why The Christmas Budget Fails

See, tracking Christmas spending is just a failure.  It starts off good, but usually by 10am on Black Friday, it’s done. Why?

  1. Multiple People on the same bill – We budget our spending by person that we have to shop for.  This sounds easy but when we have multiple people show up on the same shopping trip, it’s difficult.
  2. Shopping within the household – You’d think that we could just go line by line and break things up.  In theory, this works.  But, in practice it doesn’t.  If my wife buys something for me on any other bill, I can’t see it.  In fact, she puts those purchases on a credit card that I’m not allowed to track.  Therefore, I can’t even match an actual charge to the budget.
  3. Returns – My wife loves to buy that perfect gift for someone.  And, then she finds something even more perfect.  So the original perfect item goes back.  Of course, when she returns the item at the store, she’ll sometimes buy something else for someone else.  Confused yet?  Yeah, me too!
  4. Non holiday spending – Unfortunately, we don’t just buy Christmas gifts every time we go out.  If we buy a gift for someone at Target, chances are good that we also bought something we need for someone in our family.  It’s not like we can just add up the receipt totals.  Nope, that’d be too easy!
  5. Amazon Purchases – We buy stuff from Amazon all the time.  This includes holiday gifts.  So, not only to do we sometimes have gift and non-gift purchases on the same order, sometimes we’ll have a bunch of orders that are charged that have nothing to do with Christmas.  And, since they bill as they ship, it’s not as easy as just checking against your orders list.

What We Do

In the end, I try.  Every year, I try for a couple of days.  Honestly, though, usually by Cyber Monday I’m done.  By then, things are already off the rails.  I try my best try.  But, in the end, here’s how it works:

  • Estimate – We keep running estimates of what we spent on each person
  • Total It Up – We total up these estimates, and track them against our credit card statements.
  • Give It The Sniff Test – If our credit card totals and our estimates line up within reason, we call it good.
  • Pay the bill – We apply the Christmas Budget savings toward the credit card bill.
  • Call it done!

In the end, this isn’t the best system.  But it is what we have come up with, and it works.  We always feel we’ve spent within our budget.  It’s just that we can’t exactly say how we did it.

I suppose that if we tried hard enough, we could get to the bottom of it and get that detail.  But, I’m just not sure it’s worth it to be truthful.  I’d say we’re probably 90% accurate, which I would have to chalk up as good enough.  As maddening as it can be the moment I ‘give up’ tracking, it ends up being OK.

And, honestly, having the money available is what gives us the luxury to be a little bit lax and feel OK with it.  Another reason I’m glad we save money throughout the year for Christmas.

Readers, how do you track your spending?  Do you track to the penny?  If so, how do you do it?

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

Bigger Home Costs Are Higher Than You Think

Bigger is always better, right?  People seem to think so especially when it comes to homes.  How many of us were raised by our parents in homes that we’d now consider much too small?  What people today consider starter homes, many lived their lives in.

There can be many costs involved with a bigger home.  The most obvious one is that they cost more.  A bigger home comes with a bigger price tag.  That makes sense.

Some people say this is worth it.  They look at the 500 extra square feet.  They see that it costs them $40,000 more.  Then, if they can afford the payments, away they go!

But, there are a bunch of other costs that come in that many don’t think of.  If you think that the only cost of a bigger house is the price, think again.  Here are a few things to consider.

Higher Taxes

If you pay property taxes, then you’ll pay more in taxes.  These costs will add up over the years.  For most, you’ll be getting the exact same services as those with lower payments.

Upkeep and Repairs

Eventually things wear out in homes.  A bigger house probably has a bigger roof.  There are probably more windows.  There is much more carpet.  More walls and ceilings to paint.  All of these things will cost you more over time to replace versus in a smaller home.

Furniture

With a bigger house comes more space.  With more space comes more furniture.  All the extra furniture costs more.  And as your styles change, your replacement costs will be more down the line as well.

Utilities

A bigger house means more space to heat and cool.  This will mean higher bills to pay every month.

Opportunity Costs

Every dollar you spend on your home is a dollar you don’t have to spend somewhere else.  Keep this in mind.  You might be sacrificing an investment opportunity.  Or an annual vacation.  Whatever the case may be, realize that you’ll likely be sacrificing something for your bigger home.

More Space To Fill

Have you ever noticed that when you have more space you fill it?  I remember my first apartment.  My roommate and I each had a bedroom closet and split one storage closet.  That was it.  And we made it work.  Now, I often wander through our house, with stuff in every room.  In the basement.  In the garage.  And I wonder how did I ever make it work in that little apartment?  The fact is that a bigger house will create more space and that leads to more stuff.

All of the things above will cost you money, and they all come from a bigger house.  Now, a bigger house might be just fine for you.  If it is, great.  Just make sure that you plan not only for the purchase, but for the extra costs you’re sure to face.

Readers, have you ever added up the costs of a bigger house?  Did these ever keep you away from buying a bigger house? What costs did I miss?  Let me know your thoughts and opinions in the comments below.

 

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

How We’re Funding Our Anniversary Vacation

I recently mentioned that we’re going on a ten year anniversary vacation.  We’re all booked up for flights and our resort.  Since we’re staying at an all inclusive resorts, we are comfortable that we have most costs covered.  One thing with other trips is you get stuck with fees, meals, drinks, etc.  We already have that stuff covered.

But, still, we had to pay for it.  I don’t know about you, but we often fund things like this from several different sources.  That was really true with this trip.

Funding Our Anniversary Vacation

Here are the list of sources that we’re using to piece together the budget:

  • A portion of our 2016 tax refund.  We always put some toward travel, and this year we put some extra for this.
  • A portion of our annual vacation savings.  We fund our vacation savings fund throughout the year, and a little bit went to this trip for the year.
  • A portion of one of my two ‘extra’ paychecks.  We budget for two paychecks per month, but have two months where we get three.  This is often used for funding ‘special’ items and this occasion seemed fitting!
  • Reward money from four different cash back credit cards.  We have four cards that we use to maximize our category savings, and we cashed all four in to put a pile of money toward the trip.
  • Side hustle money from both me and my wife.  Extra money can often help fund some of the extras.  It seemed to fit perfectly.

The trip is going to be fun, though I am stressed as I’ve never flown international.  It’s nice to know that the money aspect won’t be causing too much stress if all goes well!

Readers, how do you fund your vacations?  Have you ever had a special occasion trip like this that you’ve saved for?  Let me know your experiences in the comments below.  Thanks for reading.

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

How To Calculate The Value Of An Annual Membership

Do you have an annual membership or pass to any local attractions?

Many families find annual memberships to be a great way to save money on favorite places or attractions.  They can be especially valuable for families.  We have young kids, so we have four different memberships that we take part in:

  • Detroit Zoo
  • The Henry Ford Museum
  • City Park  (for the beach)
  • Robot Garage

It’s a pretty well rounded group of attractions.  The first three are pretty self explanatory.  The last one is a local business that recently opened up that offers classes and drop-in opportunities where kids build with Lego, gears, wheels, pulleys, motors and all kinds of other nifty materials to create things that walk, roll, open, close and other cool things.

First Questions To Ask

Figuring out whether to buy a membership is a multi-step process that involves asking a series of questions.

  1. Did you like the attraction?
  2. Do you see yourself or your family liking it as much after a few more visits?
  3. Do you have time to fit this into your schedule?
  4. Can you commit to going at least as many times as it takes to get to the break even point?
  5. What is the break even point?

Making sure that the answers to the first four questions are all YES is very important, understanding that you might not know the exact answer to #4 without knowing #5.  Still, the first three questions will largely get you there.

But, say you do answer yes, and you want to know what your break even point is. That’s the important question of the day from a financial perspective.

Calculating The Break Even Point

The number you are looking for is the number of visits at which you need to hit to reach your break even point.

You’ll need to:

  • Calculate the cost per individual visit
  • Get the cost of the annual membership

Divide the annual cost by the individual cost and this will give you the break even point as far as the number of visits that you need to exceed for the membership to ‘pay for itself.’  When the number comes out as a fraction, you round up to the nearest whole number.  That’s the simple method and it works for most cases.

Sometimes, it gets a little more complicated, as you’ll see with our examples below.

Detroit Zoo

Per Visit Cost:mb-twenty-201308
2 Adults @ $14 each: $28
2 Kids $ $10 each: $20
Parking: $5
Total: $53

Family Membership Cost: $79

In this case, $79 / $53 = 1.5
Round up, and you see that it takes 2 visits to break even.

We go at least 10-15 times per year so this is well worth it.

The Henry Ford:

Per Visit Cost:
2 Adults @ $21 each: $42
2 Kids @ $15.75 each: $31.50
Parking: $6
Total: $79.50

Family Membership Cost: $160

In this case, $160/$79.50 =2.0
We don’t need to round up, so the number of visits to break even is 2.  

We go here at least 6 times per year, so we’re more than happy to renew this.

City Park Membership (Beach)

Per Visit Cost (car entry fee): $6

Annual Pass: $30

This one is a very simple calculation in that we have to go 5 times to break even.

In all the years we’ve gone, every year but one we’ve gone at least or more times, and I think one year we missed it by one visit (it was a chilly summer and also right after one of our kids was born, if memory serves), but typically we meet this one without a problem.

Robot Garage

This one is a little more tricky because the benefits come in a couple of different areas.

Per Cost Visit Drop-In Play: $8 
Class Discounts:$11
Camp Discounts: $8

Annual Membership: $99

In this case, we have to estimate three different areas:

We take our kids around six times per year, meaning that we get $96 worth of drop-in visits.  Wow, we’re almost there!

Our son typically goes to 2 classes per year, and while the $11 per class is an estimated savings, the $22 is enough to definitely push us over the edge.

We also sent our son to a week long ‘camp’ and members get a small discount (note: it’s actually listed as more, but since they offer an early bird special to non-members only, the net benefit is what I list): $8

So, for the $99 membership, we offset with a savings of  around $126.

Not great, but we do calculate that we’re at least breaking even.

Using Numbers To Make Decisions On Each Annual Membership.

With the information we have above, we can see exactly how we’re doing.  Putting together this analysis is easy and it’s also something you should do regularly.  You can use it not only to estimate up front if you think you’ll get value from the membership, but to see if you’re actually using it when it’s time to renew.

Say you loved the beach the one time you went and had every intention of going a whole bunch…on the day you signed up.  But, when you came back at the end of the year, you realized that you only went twice.  You’d know that renewing might not be your best option moving forward.

Annual memberships can be a great way to save money and create lots of great experiences for you and your family to enjoy.  Understanding just how they fit into your budget and how spending money can save you money in the long run is great knowledge to have.

Readers, do you have any annual memberships?  Do you sit down and do a cost benefit analysis to ensure that you’re ‘making back’ the cost of the actual membership?  

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.