This month is a great demonstration of what happens when we don't keep track of what we're spending. As i mentioned before, we got complacent this month. And we paid for it. Literally.

We spent more than twice what we had budgeted for Dining out. This, in combination with a few other things (We spent extra money on craft supplies, a little extra on groceries, and with gas prices being up) put us substatially over budget and we had to move money from the savings account to checking to make sure everything cleared. This had two effects. The first is that, obviously, we are further from our savings goals than we were before. The second is that I was was very stressed about it. Right now, getting things together financially on-track is a big source of pride for me, and this was a pretty big blow.

We've got a few categories we need to look at carefully. Gas, while not really something we can control right now, keeps going up, so that'll eat into the other categories. We've already spent almost 60% of what was budgeted for the year on Dining out. A lot of that is little things. $3 here and $4 there adds up quickly. We've also spent half of our Household budget for the year. Shelving and such. Hopefully this is about done though. We've been here a year and made the last purchase of shelving that we had planned.

Going on the theory that money that's already gone is less likely to be missed, I did what some people might consider counter-intuitive after being short last month. I upped the auto-transfers from checking to savings. Doubled them in fact. I'm still hoping that we can make our goal of $2500 in savings by the end of July. The credit card payoff is on schedule. Another one paid off this month. Two to go.

We've both committed to tracking cash spending again and limiting dining out as well. Hopefully May will be a good month.

TBWITWW and I were talking over dinner the other night about our financial goals. How much money we would like to have available for ourselves for our various expenses and savings.

Here is what we've come up with so far:
Emergency Fund
This is the money to cover things like unplanned car repair, medical expenses, or job loss. The goal is to never touch this fund. Eventually, I'd like to get it up to a total of 6 months income replacement for both of us, but that's long-term.
Goal: $2500

Vacation Fund
Both of us are the sort who don't relax. We always have to have stuff to do. Even our relaxing usually consists of projects. Vacations allow us to change focus and make our "projects" more leisurely. To this end, we need vacations for mental health. This fund would be annual.
Goal: $1000

Down Payment
We want to buy a house. While a 10% down payement would be nice, I don't think it's likely given what we want in a home. What we really want is a single-family home with a yard and we want a home in the city. We know that realistically, we're looking at an either-or. However, we want the negotiation room that a good down payment will get us.
Goal: $10,000

Retirement
My own 401K is in good shape, however TBWITWW has very little in hers. She has not contributed to a retirement fund since we got married. Her current employer does not offer one, and we've not had much available to contribute. Now that money is becoming available in our budget, we need to start building a retirement fund for her.
Goal: Fully-Funded Roth IRA

We didn't do so hot in March. The biggest reason was we didn't go grocery shopping. We've found, in the past, that when we make grocery lists and menus for the week, and then shop we spend less on groceries, we dine out less, and we throw away fewer leftovers. In March we didn't do this. Our grocery spending increased 31%. For dining out we spent double what we'd budgeted.
That said, we did have a pretty good month financially. We got our tax return, I got a bonus at work, and it was a 3 pay-check month. I'll be paying off my credit card this month, as well as paying off one of the cards that is currently under the credit counseling program. I'll also be transfering a good chunk to the savings account, so the goal of having $0 in credit card debt and $2500 in savings is on track for my birthday (Mid-July).

We've already made our grocery list for this week. We're doing well enough now, that the biggest challenge will be maintaining the level of motivation we had when the idea of having some "fun money" as well as saving and paying down debt was still new.

Spending on Hobbies/Leisure : Photography in February increased 6830% to a total of $1,131.67.

February was an expensive month, but it was planned that way. I've been buying stock $10 per pay check for several years now. I've wanted to replace my camera and go digital, so I'd planned to use some of that stock, when it got high enough, to purchase the camera. This month, I did just that. With enough left for a really nice Valentine's Day dinner and a new printer. That said, we didn't watch the rest of the money as closely as we should have so things got tight right at the end of the month. We weren't able to make an extra deposit in the checking account and because of the stock sale, our net worth (according to MS Money) actually went down $30.00 (It's still negative.)
On the other hand, we stuck to our budget quite well other than the one-time special purchases and one of our credit cards is now paid off. March looks to be a big income month too. My job pays bi-weekly, so two months of the year, we get 3 pay checks, and the third doesn't have the optional deductions (insurance, transit, etc) taken out, so it's a touch bigger. Also, tax returns and possibly a bonus are on the way. So we'll pay off another card, and put the rest into savings to pay for two trips we're taking later this year.

Our goals are, by my birthday (in July), to have $0 in credit card debt. (The only other debt we'll have is Education Loans) We also hope to have $2500 in our savings account as an emergency fund, and have enough to cover the first of our trips in the savings account. (We'll move that money to the checking account before we go.)
By the end of the year, we plan to still have $0 carried on credit cards (we may use the card, but we'll pay it off each month) and start an IRA for TBWITWW (I have a really good 401k and she'll have a small one by then, but we need to put more away for her.) We'll be setting an additional savings goal once we have a better grasp on what the finances look like with the credit card debt cleared. We need to start working on a down payment for a house. Our credit took some hits over the last several years, so we know we're better off waiting so we'll be in a better position when it comes time to start shopping for loans.

I'm just starting on this financial journey, so there's much fine tuning to do. But I'm excited and motivated, which I've never been before.

I've been reading several personal finance blogs lately as part of trying to both clean up past mistakes and prevent new ones. Some of the ones I'm liking a lot are Get Rich Slowly and The Simple Dollar. I've decided to share a little bit of what I'm doing, mostly to help keep myself on track.

Background
Before we got married, TBWITWW had a good job that paid quite well. I on the other hand, was a financial idiot. I had a decent job, but not a great job, a mountain of bad credit, some very poor choices under my belt, and no system for tracking what I had coming in and going out (and more importantly, what should have been going out). After the wedding TBWITWW moved up to the Greatest City in the Known Universe (abbreviated CHICAGO). Unfortunately, our timing was quite bad. She was unable to find employment for almost 2 months, and then took a seasonal, part-time job for just over minimum wage. Needless to say, bills were not getting paid and credit cards were how we paid for almost everything.

Flash Forward 4 Years
TBWITWW has a decent job again, we're paying off the credit cards we lived on that first year to the tune of almost $1000/mo and my financial management skills have changed very little. We've just found out that we have to move because our building has been sold, and is being gutted (the second time in less than a year). We decide to see if we could possibly buy a home and avoid the risk of this happening again. We get the credit check, and we're in pretty bad shape. This is my wakeup call. I finally make a committment to do something about our financial situation. We got ourselves a copy of Microsoft Money, and a computer to run it on, and for all of 2006 we tracked our spending and our income. Just tracking it caused an improvement, because suddenly, we could see that we were spending far to much on things that weren't necessary. Also, we stopped paying late fees, over draft fees, etc.
And Now...
At the begining of this year, we started tracking our cash spending as well, last year, we would record that we'd gotten $20 from the ATM, but not where that $20 had gone. Also, we looked at our spending for 2006 and set up a monthly budget. Suddenly, at the end of the month, we're able to look at our accounts and say "We should put some of this extra money in our savings account." rather than "Crap, we have to pull money from the savings account to buy groceries again." It's a great feeling. Our goal is, that by my 30th birthday (in July) we will have all of our credit card debt paid off, and a balance above $2500 in our savings account. We're quite happy about this. The best part is we're actually living better now too. We can get new clothes when reach the "unprofessional" stage, rather than waiting till the "unwearable" stage. We can go out for a nice dinner together because we know we haven't spent all of our dining out budget on fast food and coffee.
Still to come
In the coming months, I plan to post a bit about budgeting, saving, and spending (Including how we spent as much money last week as we normally spend in a month, and how I'm actually okay about it... mostly); progress we're making; and how we're dividing up our spending. I'll post progress updates as well. Hopefully you'll find it either interesting or educational.