2007: The Year of Pancake & Mountain Girl

Happy New Year! One of my resolutions for 2007 is to try and blog every day. It's been a while since my last post and since then Pancake and I have resolved to get out of debt this year. We accomplished quite a lot in 2006: we paid off the company's debt to the IRS, bought a home, consistently spent less than we earned, and stopped using credit cards. Now it's time to tackle the business debt and pay down the mortgage while putting money toward savings.

The other day, while going over our 2007 budget, I showed Pancake that after bills (credit card and loan payments, mortgage, telephone, utilities, etc.) and putting $200 in savings, we have $700 a month left for everything else. This includes gas, food, cigarettes (I know I should quit smoking), coffee at the coffee shop, restaurant meals, entertainment (movies, etc.), and any purchases like books, music, and home-improvement supplies.

Pancake's reaction was, "Seven hundred dollars! That's a lot!"

This surprised me because I didn't think it was all that much. We have no problem spending it, for sure. But rather than justify spending that kind of money, I decided to challenge us. Can we reduce our spending to $400 a month and still live as well as we do now?

$400/month=$100/week=$12.90/day.

I made a PocketMod using the financial register component and will keep track of the total that we spend every day for the month. If we can keep our expenses to the allotted $400 then we can put the extra $300 in savings.

Here's the catch: What I don't want to do is put off all purchases until February. We need to live well, continue to work on our house, watch movies (one of our favorite pastimes since we don't subscribe to cable TV), buy books and music that we really, really want, enjoy an occasional meal out, go to the coffee shop, etc. This means that I have to find ways to cut expenses that we don't notice. One of the first things that I've done is make cloth napkins so I don't have to buy paper ones anymore. This is actually a lifestyle improvement because they're more attractive and nicer to use than paper. Also, Al Gore would approve because we're not wasting a valuable natural resource.

I will keep you updated on our progress and share any money-saving/cost-cutting tips that I discover.