• I spent $174 more than planned on BILLS because I paid my auto insurance premium in full ($304.20).
• I also spent $492 more than planned on NECESSITIES because I paid the final tuition payment for BabyGirl’s summer camp ($600).
• And finally, I spent $15.28 more than planned on BUSINESS because I renewed my PO Box for six months ($46).

But the one thing I’m most excited about is my FUN category, which came in $3.31 under budget.  Yes, UNDER budget!  Just last week, I said I would limit myself to $500 per month, effective July 1, but it worked out well for June too. FABULOUS!

All items that were more than planned were not really budget busters.  They were one time, necessary, expenses that exceeded my usual monthly outflow.  However, in the spreadsheet, their values are spread evenly throughout the year and cash was readily available to pay them in full.  I expect to see more of these one time expenses in July, such as:

• 70k auto maintenance, also need new breaks
• optometrist visit for both, more contacts for BabyGirl, glasses for me
• dentist visit for both, cleaning for BabyGirl (she’s wearing her retainer again, all on her own, woo-hoo!), need the works for me

Other than that, I expect July to be more of the same with regular bills and such.  And I plan to stick with my $500 FUN limit.  We’re only 1 week into the month and I’ve spent $268 of it already.  Oh my!

Armed with a few gift cards, I made my way to the Maxx - TJ Maxx that is. And boy was I in luck! Look at what I scored…

HOOOOOT!!  This mustard handbag was only $29.99 and I couldn’t believe it! I love the texture of this leather, it feels soooooooooo soft and delicate. I must admit, the smell of the genuine leather is a bit strong though. Based on my inspection of the seams, interior lining, straps, and hardware, the workmanship of this handbag is A+++++++++. Although this isn’t quite the “summer” bag I had in mind, I couldn’t dare pass up this steal. It will get lots of usage this fall.

This type of shirt isn’t usually my style because I don’t do the visible bra look - maybe a little peek-a-boo of the lacy trim, but not a straight up display of my goodies. At any rate, I thought the fabric was cool and summer-y, which is what I was looking for. Perhaps I can wear it on top of my strapless one piece pant set for a layered effect. If I’m feeling mischievous, there’s no telling how I might wear it. For $14.99, I’m sure I can think of many ways to get my money’s worth.

I also picked up a zebra print cosmetic caddy for $7.99, a pair of hater blockers (BabyGirl taught me that term LOL) for $9.99, and a chunky hot pink necklace for $10.99. I quickly scanned the shoe selection and…*shock*…nothing caught my eye. Overall, it was a productive shopping trip for little to nothing out of pocket.

Do you shop at your local TJ Maxx?  Any great finds lately?

Savings - 20%
Bills/Needs - 50%
Fun - 30%

That breakdown is so simple.  It should be pretty easy to follow, right? Wrong!

Lately, my expenditures have been looking like this:

Savings - 10%
Bills/Needs - 40%
Fun - 50%

I blame it on the Goose! LOL

In the past few weeks, my spending has increased significantly.  Why?  *shrug*  I always track my spending so I knew where my money was going, but I wasn’t paying attention to my money.  The difference?  I dutifully kept my receipts and updated my spreadsheet at least once per week.  But tracking my money doesn’t mean a thing if I don’t use the information to prompt action when I notice that I am overspending.

Instead, I watched the fun category triple what it should have been.  As long as I wasn’t incurring debt, I justified the expense in my head and convinced myself that it was acceptable.   Now don’t get me wrong - staying out of debt is great - and so is having fun!  Oh boy, fun can not begin to describe my life over the past few weeks. Whew!  But I needed to remind myself that all good things are acceptable in moderation.  If I continued down that slippery slope, I may have found myself in a ton of trouble.

So what did I do?

I had to redistribute my cash flow and give myself a reality check.  Now, my budget spend plan looks more like this:

Savings - 30%
Bills & Needs (long/short term) - 60%
Fun - 10%

Savings: I was getting lax with my savings.  I’d already reached my goals and I had nothing else to keep me motivated, so I began to spend the surplus. Wait!  *pump the breaks*  There’s always a reason to save!  I mean, how long have I been dreaming about going to Paris?  Yea, umm…let’s just say I am recommitted to saving/investing 30% of my net income, in addition to maxing out retirement accounts.  No more ’save some through payroll’ then ’save a little more’ at the end of the month. Nope!  I don’t trust myself, so I’m putting ALL of it on automatic allotment!

Fun: This is where all the overflow went.   Whenever one of my friends would say “Hey, let’s go ____!” I’d be the first person responding to the email.  Dining out became a natural occurrence.  Taking weekend trips with unplanned expenses was the second runner up.  And the biggest problem - being punked by BabyGirl when she did something exceptional at school.  What can I say?  I’m a sucker for a couple of As and a few awards.

In an attempt to pull in the reins, I consolidated and reduced my ‘fun’ elements from 8 to 4: personal pampering, dining out, entertainment, and shopping.  Fewer categories to track make it easier to manage.  And beginning July 1st, I am giving myself a monthly allowance to spend guilt free.  Shoot, I may even try a cash only system! We’ll see about that part…

Do you follow the basic budget formula (or some variation)?

Have you ever noticed your spending get out of hand before it hurt you financially?  What did you do?

Credit-card companies, though, may not be the only ones we need to be protected from. Every penny of Americans’ nearly $1 trillion in revolving debt started with someone — some individual person — whipping out a piece of plastic and making a decision to use it. We could consider that free will and just call it a day, but there’s plenty of reason to believe the story isn’t so simple. There are piles of evidence that people are bad decision makers when it comes to how they use credit cards. Even when presented with full and fair information, they often make decisions that are not in their own economic best interest…

We can blame credit card companies all day for their sneaky profit making tactics, but no one is forced to use a credit card.  Many people view credit as free money and throw caution responsibility to the wind.  Even with the new regulations, there will still be tons of people with unmanageable credit debt.  Why?  Lack of personal accountability.  The government can’t protect you from yourself.

For a long time, the credit card industry has profited from charging extraordinarily high interest rates to consumers. But most people aren’t aware of the specific tactics used to target these consumers. Using client segmentation and marketing techniques, credit card companies can determine which consumers are most profitable, and then focus on retaining these consumers.

Capital One was actually founded by using these techniques. Back in the late 1980s, credit cards were becoming increasingly popular. The founders of Capital One started looking at consumer data, and found three distinct groups:

1. Those who paid their bills on time
2. Those who made the minimum payment, but always keep a significant outstanding balance
3. Those who constantly defaulted on their credit

Of these three categories, only the second one was profitable. Capital One couldn’t make any money off of consumers who paid their bills on time.  They also lost money on the third group. But the second group was a gold mine. These were the people who could just make ends meet, but were unable to pay more than the minimum payments. As a result, they were prime targets for exorbitant interest rates.

Once Capital One figured this out, they created a targeted marketing plan. They used tactics such as low introductory rates, with steep increases in subsequent years. The plan was very successful, and soon other credit card companies were copying their strategies. Unsuspecting consumers were encouraged to meet the minimum payment, without blatant warning of the high interest rates to follow.

The recently passed credit card legislation may help reduce this, but it will not prevent credit card companies from trying to make a profit. Capital One and its competitors will continue to use tactics to find profitable consumers. Just remember, what’s profitable for them is a loss for you.