Naked With Cash is an ongoing series at Consumerism Commentary in which readers share their households’ finances with other readers. These participants benefit from the accountability that comes from tracking their finances publicly and the feedback of the four expert Certified Financial Planners (CFPs).
This year, we have four participants who will share their financial reports, exposing the results of their financial choices. Each participant is paired with one of our Certified Financial Planners. The experts will provide insight and guidance that will help our participants take their finances to the next level by the end of 2014. Learn about this year’s participants and experts.
Brian and his wife have two young children. Brian’s wife recently started staying home, and they are trying to work through the transition from a two-income household to a single-income household. They have student loans and a mortgage, and usually pay their credit card balances off each month. Brian and his wife have two main goals: Retire comfortably and help their children pay for college. They want to take a long-term view of their money so that they can live the way they want in the future. (Read Brian’s update from last month.)
After reading Brian’s comments, you can see video commentary from Jeff Rose, CFP. Jeff Rose appears courtesy of Good Financial Cents and Life Insurance By Jeff. This month, participants have been asked to focus on short-term savings goals.
Brian’s Net Worth Statement
Brian’s Income Statement
Comments and analysis from Brian
This month is about short term savings. Our family plans for these events by looking ahead and allocating the money using the envelope system. For example we want to improve our master bedroom and also our deck outside. We are allocating money every month and also researching what we want to do and much it will cost to perform.
With other wants, I really like to wait 30 days and see if I still want it. I received some gift cards for Christmas and have yet to spend them, since I have not found something I really want yet (I’m sure I will at some point this year). Back in my single days, I was a little loose in my spending, and bought stuff when it came out and sometimes it was hardly used after a few months.
March was a pretty good month. We made an effort in Feb to really tackle Groceries and we spent about $100 less in March than we spent in February. Better yet, my wife and I think we can improve on this in the months to come. We were doing grocery shopping every two weeks (grocery shopping takes up so much time), but we wanted to try an experiment and go every week. We allocated $100 per week and we met our goal every week. The last week we even scored a bunch of “manger’s special” meat that should last us a month. This month our goal is to find a good mix of expensive and cheap meals. We normally do not make any meatless meals, but we really want to try to get at least one every weak.
This month I want to take another budget category and see if we can have the same success. We did have increased gift spending due to birthdays this month. We were over this month but there were quarterly and annual bills that came up this month. This month, I really want to start getting quotes to see if I can save on insurance per Jeff’s comments. I also want to continue to attack our budget to get spending down.
Feedback from Jeff Rose, CFP
Jeff praises Brian for being willing to experiment a little bit with money-saving techniques; after all, personal finances are personal, and everyone’s budget is different. Jeff also offers some solid strategies for cutting the grocery bill and saving money in other areas.
Feedback from Luke Landes
I like the strategy you used for saving money on groceries, and I’m looking forward to seeing how you apply that to other areas. Although I feel the same as you do, that grocery shopping takes up too much time, I’ve opted to have my groceries delivered.
The balance in your 529 savings plan seems to have disappeared. Did you miss reporting that balance this month or are you withdrawing from the balance?
Last month, your cash flow was positive only because you received your tax refund, and this month, you had negative cash flow. You are already aware of this, Brian, and have noted you had some quarterly bills to deal with. To help readers, when you see this in your own finances, this could be a warning sign. In this case, Brian’s actively finding categories to cut back on spending. Once I started tracking my finances at the turn of the century, I confirmed the feeling I already had — my expenses outweighed my income, and I had to tackle both ends of the equation.
It’s fine to use a surplus from January to handle expenses in February and March, but any individual needs to evaluate his or her own personal situation to ensure that it’s not a signal of trouble down the road. Brian’s situation here is a good example of why you can’t just look at your finances at one specified time and make a judgment; you have to see data over time to make an accurate evaluation.
Published or updated April 25, 2014.