December
Groceries - Wow, was December the completely wrong month to try to start this! Besides regular groceries, I cooked Christmas Eve dinner for Dave & his parents which was an extra chunk of cash. Trying to stick to a budget makes you realize how expensive meat is! I bought the prime rib on sale for $4/lb, so it cost $28. Between Christmas Eve dinner, there was also New Year's Eve. Those two "events" put me over my budget for the month by $89.
Dining Out - I managed to avoid the Christmas Eve dinner to Providence which would've set me back $150 easily. Instead, I came in $25 under budget. Woo-hoo! I really had to make an effort to do this. I had to turn down going out for dinner and stop myself from making a quick stop to pick up a quick something. This took a lot of conscious effort.
January
Groceries - I was out of town for over a week, which helped cut down on the groceries I needed to buy for the month. I stocked up on stuff that I can use over the next couple months, including 25 pounds of flour and hamburger patties. I came in $8 under budget!
Dining Out - I spent some money on the cruise for alcohol and ended up coming in $18 under budget!
So, over the last two months, I spent $38 more than I had budgeted, but! I feel like it's been a success. I easily could've spent a lot more money on both areas, but didn't because I was consciously spending. Or rather, consciously NOT spending. Normally, I'd just go with the flow and go out to eat whenever, but now I'm trying to plan ahead to figure out whether I want to spend the cash to go out. The groceries should be fairly easy to manage I think. It'll be tougher when I'm going to be entertaining more.
I'm going to continue on with the system for at least a couple more months and then reassess. The economy is totally going downhill, with no end in sight. Even though I have money saved, I'm definitely trying to save more money. It's always good to be prepared in case of an emergency and who knows, maybe I'll want to buy a house. I stopped at an open house yesterday and the home prices in Burbank have come down, with several of them even under $500K, but frankly, I think they'll come down a lot more over the next year, so I'm just going to sit tight and save up some more cash.
I did decide to not max out my 401(k) this year, but instead take more cash in hand. There's no company match where I work, so it's not like I'm giving up any free money. I'm still maxing out my Roth IRA though. I'm still investing in my investment account that is outside of my retirement account. That has been the most difficult. To keep investing the same amount of money in there without feeling a twinge of "OMG I'm going to lose money". I keep remembering what I read in the The Coffeehouse Investor
about how the no matter what the worst five year span is, it basically always goes back up... at least historically, it has! So I'm going to just chill and wait. And cross my fingers and hope that everything goes back up eventually. Besides, like Chris said, "It'll eventually go back up and if it doesn't everyone will be screwed, so it won't even matter."
1 comment:
The author of your investing book should know better, there have been plenty of five year periods with negative returns from stocks -- and we're very likely to see a decade with a negative return (for the first time in history). (The 2000 market highs cast a very long shadow.)
"Stocks have always been a good investment in the long term" -- as long as your definition of long term doesn't include college savings for children who are already born. Time horizons less than 20 years should be diversified to include bonds, and usually cash equivalents too. Now is a reasonably good time to buy stocks for their own merits, but hopefully you're not putting the money you plan to use to buy a house in equities Stephanie.
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