In planning my financial goals for the year ahead I had to review all my expenses for the past 12 months and all possible revenue streams for the same period.
I also included several financial surprises which I recently received. One of them was a notice that my maintenance charges for my apartment were going up by $60.00/mo starting Jan 1st.
Another envelope I opened told me the outstanding balance remaining, after the paltry medical insurance payment, for my son's surgery was deemed insufficient and I was responsible for the remainder of the balance of two thousand dollars. That, coupled with higher cost of living on food (up 7%), cleaners (up 5%), utilities (up 11%) and take out restaurants (up 15%), created a considerable increase in my living expenses for this last quarter in 2007. Unfortunately, the news of a wonderful raise (to begin in January), did not completely offset all of these increases. So what's a girl to do but to seriously scrutinize her budget, re-examine her financial goals and see what can be restructured so that I can live within or below my means, while replenishing my emergency fund and savings, and ensuring that I not take on any new debt! Ambitious goals I know, but if I managed to completely eliminate all my debt while managing a household, I can achieve my Personal Finance goals for this year. The question that remained was how to do it painlessly.
I seriously pondered this as I sipped my Decaf Grande Vanilla Latte from Starbucks. As I sat there sipping I realized that last year I had cut my coffee consumption in half and managed to save with just that one action $600/year. I realized that if I cut my Starbucks consumption completely (and instead consumed only the free coffee and tea at my office), that single act alone would cover in it's entirety the maintenance increase I had just recieved. As I lovingly stared at my cheery Starbucks cup, I asked myself if I was finally ready to go cold turkey and emancipate myself from my long held latte addiction? As if mocking my resolve, the delicioius contents of my cup wafted in my direction, taunting me. I wondered: Could I really let go of this beloved elixir, which infused such a vital chemical lifeforce within me daily?
Well, the answer had to be yes! And to support that decision I decided to begin making that change in early December. Lo and behold, here it is 3 weeks later and I've done it! I managed to kick the Starbucks habit and have only gone out for coffee when someone else has treated. I have now also acquired a taste for hot chocolate, premium and herbal teas, all which are provided gratis/free by my employer! I LOVE FREE!!!
The next high priced item in my budget was the cleaners and utilities. I cook a lot so that could not be changed. 2 years ago I began a campaign to cut electricity and in the first year I reduced it by goal of 12%. After seeing the 11% increase in my bill I decided to implement a few more drastic measures (which I'll report in another post in a month or so) which I'm hoping will offset that increase.
As for my dry cleaning bill, the culprits are my dress shirts, wool sweaters and suits, all which I wear to work. My weekly dry cleaning bill is on average $50/wk or $200/month. So I took to the net and discovered some ideas on how to save on dry cleaning expnses on everthing from wool sweaters, down coats and comforters to my suits! Yahoo! Yes, it involves me doing some hand wash and other things like washing woolens separately and then air drying the items in my apartment, but the annual savings for this is expected to be almost $800. So there goes another way I can offset the majority of the remaining cost of living increases easily.
My goals also had to follow my self-investment goal of increasing by small annual amounts my savings fund and my son's college savings fund. To help with that I plan on brown bagging my lunches to work 2x week (a savings of $20 per week and eating breakfast at home during the work week (or bringing it in with me) which saves me another $20/week for a total weekly savings of $40, half of which will go to the above goals and the other half is to go towards the family's vacation fund. We have picked the location and dates and know exactly what it involves financially.
So, to help you with any of your financial concerns, or if you're planning on setting financial goals or resolutions of your own, here's a place you can visit for a truck load of ideas and inspiration: The Carnival of Financial Resolutions
Update: If you're a parent concerned about your children's financial awareness or values, then readingthis post by Father sez is a must. And please don't miss his 8 year old - Ain's Personal Finance goals for 2008.
Here's to a more prosperous you in 2008!