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November 2010 Credit Card Bill


retire by 40 November 2010 credit card billWell, the day I’ve been dreading is here. The November credit card bill came and as expected, we had quite a few non- compliance charges on there. We were doing really well in September and October, but Black Friday and the holiday season got the better of us this year.

Gas – $180. Road trip to CA.
Public Transport – $47. I get $30 reimburse though.
Pet Supplies – $58
Cell phone – $40
Internet – $30
Blog Expense – $55. Research for an upcoming guest post.
Home Depot – $13. Two halogen bulbs.
Target – $76. Multivitamins, Brita water filter stuffs, undershirts ($7.50)
Best Buy$300. A new TV purchased on Black Friday weekend….
Macy$117. See Epic Fail on Black Friday.

* We give ourselves $100 allowance each every week to spend on discretionary items:  grocery, shoes, shows, dinners out, and whatever else we want.

The $417 Black Friday weekend consumer goods should have been purchased with our allowance saving. I piggy backed my $7.50 undershirt purchase with other household items from Target, and yes I was alone at Target that day. 😉 Things that we should have saved up for – total $424.50.

November 2010 compliance rating: 52%.

It’s an F this month. 🙁

We haven’t came up with a penalty system for a bad compliance-rated month yet. I guess we could save and have our allowance deducted, but that would suck….  Any suggestions readers? Let us have it, don’t hold back. What do you do when you blow a budget?

compliance rating = 100% – (what we should have paid with cash/total bill)
100% – ($424.50/$886)

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he hated the corporate BS. He left his engineering career behind to become a stay-at-home dad/blogger at 38. At Retire by 40, Joe focuses on financial independence, early retirement, investing, saving, and passive income.

For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.

Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
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{ 23 comments… add one }
  • Jake Stichler December 20, 2010, 3:59 am

    I used to do deduction from my budget for overspending, but realized very quickly that it doesn’t work – for me, anyway. Problem is, I overspend every month, and I use a similar system as you – rather than budget for every little thing, I have one big “misc” category, which is pretty much anything that isn’t either a subscription or a bill. I found my best bet would be to actually change that “misc” amount closer to what I’m actually spending every month, rather than pretend I can manage on only $150 next month because I screwed up this month.

    Right now, I’ve been budgeting $300 for misc expenses (up from $250), but even that’s low – I usually spend $350 – $400, but I really, really don’t want to bump the budgeted amount up to that much. It would be so much better for my budget if I did, but the thing that’s holding me back is simply that I hate the thought of it.

    • retirebyforty December 20, 2010, 8:08 am

      Our misc budget is pretty big already at $800 for two. Usually it works pretty well, but when we splurge it messes up the budget. We save up allowance for big ticket items, but the TV wasn’t a planned purchase. Yeah, it’s tough to find the correct amount.

  • 101 Centavos December 20, 2010, 4:05 am

    Blowing a budget is not necessarily a bad thing, as long as it’s not catastrophic. It can serve as a helpful reminder to stay on track next month.

    • retirebyforty December 20, 2010, 8:10 am

      For now, we can handle a busted budget, but when I quit my job that won’t be the case. I guess it’s good practice for now, but it would be good to have some kind of self imposed penalty when we blow a budget. Maybe no eating out for a week…?

  • Kevin @ Thousandaire.com December 20, 2010, 6:46 am

    I will just say that I wish I had a credit card bill that low. You may not have met your own personal goals, but congratulations!

    • retirebyforty December 20, 2010, 8:12 am

      Thanks Kevin! The bill is not that low. We have $800 cash allowance so it’s actually credit card bill + $800. We would like to keep the cc bill around $600 and it’s really hard. I’m sure you know this.

  • MoneyCone December 20, 2010, 7:34 am

    Look for ways to cut back on recurring expenses. We did away with home phone ,went with Ooma, used prepaid for cellphones, cut cable and went with over-the-air tv.

    But then each person’s situation is different. See what works for you. For example, taking lunch to work is easy for most, but never works for me and that’s an expense I have to live with! 🙂

    • retirebyforty December 20, 2010, 8:13 am

      We did all you said already. 🙂
      I think we’re pretty good on recurring expenses. It’s the splurges that usually bust the budget. It’s me that usually bust the budget. The Mrs. is very good at sticking to using her allowance.

  • BeatingTheIndex December 20, 2010, 7:35 am

    Come on retieby40, you’re going a little bit hard on yourself. It’s OK to splurge a little bit from time to time!

    • retirebyforty December 20, 2010, 8:15 am

      It’s hard not to splurge on Black Friday weekend and Christmas time. 🙂
      I’ll have to come up with an isolation plan next year. Maybe go camping on Black Friday weekend or something like that.

      • Kellen December 20, 2010, 2:46 pm

        Haha, going camping sounds like a good idea. Unless you don’t have any camping stuff. Otherwise you’ll go to buy a couple things for the trip. And realize how many cool camping gadgets there are.

  • Aloysa December 20, 2010, 9:25 am

    What are you researching for your guest post that costs you $55? I REALLY hope this research is not for your upcoming guest post on the Kitchen Sink. What is this?

    • retirebyforty December 20, 2010, 10:13 am

      Haha, this is for Budgeting in the Fun Stuff next Monday. You’ll have to wait.
      For the Kitchen Sink, the research is going to cost about $2,500. That would be a great write off, but I can’t afford it at the moment. I’ll just have to write from memory. 🙂

      • Aloysa December 20, 2010, 10:25 am

        Wow! I am looking forward to your guest post for Crystal. 🙂 I feel much better now that you confirmed that my requirements for a guest post are much more expensive. I didn’t want to come out too cheap, you know. LOL

  • Kellen December 20, 2010, 2:52 pm

    For whatever reason, negative consequences don’t work well for me… I do make my budgets roll over though, so if my budget is $300 for category A one month, but I spend $500, then next month it’ll show that I’ve already “spent” $200 of my $300 allowed. (I use Mint.com which makes this easy.)

    I like to do this on my “pets” and “clothes” categories, because they are both categories that can have extra-high expenses one month, but not for the following months. Even if I blow the budget 2-3 months in a row, I can see myself catching up to where it should be over the following months.

    • retirebyforty December 20, 2010, 4:08 pm

      Roller over could work. It’ll be really painful with $425 though. I think I’ll give myself a loan forgiveness pass and start fresh in 2011.
      Next year, we’ll roll everything over.

  • Money Reasons December 20, 2010, 5:03 pm

    Christmas spending hit us hard! I use to say that instead of living paycheck to paycheck, we would life old year to new year because of the expenses at the end of the year!

    So taxes were considered a positive thing for use because we wanted our return back! I know that is bizzarro logic, but it’s what we use do…

    This year it should be different though!

  • FB @ FabulouslyBroke.com December 21, 2010, 4:20 am

    I just don’t go to the store 🙂 If I don’t see it, I don’t want it.

    I also make a list of things of what I want and I ONLY go to the stores to buy those items.

    Easier said than done. Better luck next month! 🙂

    • retirebyforty December 21, 2010, 6:22 am

      That’s a great policy and we usually follow that advice, but Black Friday Weekend was when the dam broke as they say. 😀

  • Barb Friedberg December 21, 2010, 7:22 pm

    I know we’ve discussed your budget before and the black Friday episode. But, that said, ask yourself… Are you sticking some cash in savings each year? Do you have an emergency fund or are you working towards one? You don’t need to be perfect… just good enough. Life is about splurging once in a while too. (Also, I might move groceries out of the “discretionary” category; after all, eating is really a necessity 🙂 !

    • retirebyforty December 21, 2010, 8:53 pm

      Hi Barb,
      We have a 4 months emergency fund in the saving account, anything over that goes to the brokerage. We are ok to splurge once in a while, but you know what hurt worse than busting our budget? It’s writing a post about it. 🙂 I think we’ll stick to the budget better next Black Friday. Our grocery store of choice only takes cash or check so we just increase our allowance a bit to cover it. I know it’s a bit convoluted.

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