I’m going to count this as a parenting win

My older son did a sweet thing today.  Little Boy and I were running around the block this morning (or more accurately, taking a walk break during our run around the block) when I saw a penny on the pavement.

“Look, a penny!” I said.  “Pick it up, it’s good luck.”

Little Boy, currently a few months away from turning four, has a piggy bank made from an old Gatorade tub.  We’ve talked about how money can be saved and used to pay for things that he wants, and he seems to have an age-appropriate grasp of how that works.  I thought he might like the penny and he did pick it up, but a few steps later, he became concerned.

“I don’t want this money.  I can’t put this money in my piggy bank.”

“Why?” I asked.

“It’s not my money.  It’s somebody else’s money.”  And he set the penny down on the sidewalk for the original owner to find.

Can’t really argue with that.

The 4 types of responses you get when selling on Craigslist

We’re definitely not having any more babies, so as Younger Brother has outgrown his newborn stuff, I’ve been looking for ways to get rid of it.  Craigslist offers a nice win-win scenario: I get a little extra cash, while someone else gets gently used gear at a good price.  I’ve made $55 in the last month—nothing to retire on, but nothing to sneeze at either.

I learned pretty quickly to not get too invested in any particular response to my ads.  These responses tend to fall into one of four general categories:

1. The Scammers—”Is Item,,still available”

Message literally says “item”?  Delete.  Scammers copy-paste the same email to everyone.

2. The Window-Shoppers—”Are the baby clothes still available?”

Plausible grammar?  Correctly references the thing for sale?  Might be a more sophisticated scammer, or it might be a legitimate person doing some virtual window-shopping.  I don’t really understand why people use Craigslist this way, to be honest.  They haven’t yet decided whether they want the thing, but they go to the effort of sending an email anyway.

This group used to annoy me (if the ad’s still up, it’s still available!) but now I just write a five-second “yep, still available” reply and move on.  They rarely answer.

3. The Non-Readers—”What part of town are you in?” / “Location?”

Craigslist sales are in-person, cash-only transactions, so location does matter.  I completely understand why someone wouldn’t want to drive 25 minutes across town for some used baby clothes.  Which is why I use Craigslist’s handy “Show on Maps” feature.  All of my ads include street map with a pin dropped at the nearest major intersection, with the names of the cross streets written in text below the map.

Obviously, when it gets to the point of finalizing a pickup, the buyer will need my full address.  This category isn’t about that, it’s about the people who ask for my location right off the bat (or as their immediate response to a “yep, still available”).  Like the window-shoppers described above, these people haven’t actually decided if they want to buy the thing.  They also haven’t bothered to spend more than two seconds looking at the ad.

I reply to these people, but I’m a little snarky about it.  “I’m at Maple and Elm, like it says in the ad.”  Does this drive away potential buyers?  Possibly.  Were they likely to follow through on the purchase in any case?  Nope.

4. The Buyers—”I’m interested in the Graco swing.” / “Can I get both sets of swaddles for $15?”

The serious buyers—the people who are likely to show up and pay for the thing—send non-generic messages.  They indicate a definite interest.  They correctly reference the item for sale, and they’ve actually read the ad.  Maybe they offer a price, or ask for a deal buying multiple items.  (I say yes to any reasonable offer, because I’m not interested in drawn-out negotiations.)

Not all of these people will end up buying the thing; some will stop responding, while others will set a time for pickup and never show.  But all of my eventual buyers have come out of this category.

I’ve only been selling on Craigslist for a month, so I suspect there are a few types of replies that I haven’t encountered yet.  Do you have anything to add to the list?

My approach to budgeting: the electronic envelope system

In our house, I am the Keeper of the Budget.  In the beginning, we opted for a simple yet vague “spend less than you earn” approach.  As our bills became more complex, I moved our finances to a spreadsheet system.  We’re sort of middle middle class, neither lower nor upper: we have more than enough money in the bank to cover bills at any given time, but lack complicated income streams from investments and such.  The system we use works really well for us, and I’d like to share it with you today.

The Electronic Envelope System

One of the simplest forms of budgets is something called the envelope system.  At the beginning of the month, you take out the cash you plan to spend, and put it into physical envelopes for each category of expenses.  You might have an envelope marked “Groceries,” for instance, and another labelled “Movie Tickets.”  Throughout the month, you spend what’s in the envelope; when it’s gone, it’s gone.  If there’s money left in an envelope at the end of the month, you can carry it over for the next month or stash it away as extra savings.

That, in a nutshell, is how my budget works.  Except there are no literal envelopes involved.  My “envelopes” exist as columns in a Microsoft Excel spreadsheet, while all the money stays mingled in our checking accounts.  Every dollar is allocated to a specific future bill or group of expenses.  When we use up all the “Eating Out” money in a given month, it’s done—even if there’s plenty more money in the bank, there’s no money left in that “envelope.”  (OK, I do move money around in the spreadsheet sometimes.  Flexibility is a benefit of the electronic approach.)  Money left in an “envelope” at the end of the month carries over to the next month, so if, say, we don’t eat out much in March, we can go out a few extra times in April.

Categories of Expenses

To keep things organized, there are five groups of “envelopes” in our budget:

  1. Regular Monthly Bills.  These are bills that come due every month, and that are either the same amount of money each month or something fairly predictable.  Examples: rent, electricity, car payment, health insurance.
  2. Regular Non-Monthly Bills.  Bills that are predictable, but that don’t get paid every months.  For instance, I pay $400 every summer for my yearly campus parking permit.  Thus every month I put $400/12=$33.34 in the “Parking” “envelope.”  (In practice I round it up to $35, just in case the price goes up next year.)  Other examples: car registration, trash pickup (billed every 3 months here).
  3. Stuff We Buy Every Month.  This covers things I know we’ll pay for every month, although they won’t always add up to be exactly the same.  Examples: groceries, toiletry products, gas for the car.
  4. Stuff We Pay For Occasionally.  This covers all other groups of expenses, things that might cost a lot or a little in any given month.  Like furniture, or office supplies, or vet visits for our cat.  There’s also a “Miscellaneous” category for me and my husband that acts as our monthly “whatever you want to do” allowance.  Other examples: health care, clothes, gifts, toys for Little Boy.
  5. Savings.  No budget would be complete without savings.  This includes money that gets moved to our savings account, and money put into our retirement funds.

The Spreadsheet

Because I’m not physically taking cash out of an envelope, I need another way to keep track of how much money has been spent in each category.  That’s where the spreadsheet comes in.  Each “envelope”/expense category is one column, with a row for every day of the month.  Something gets spent that day, I enter it into the appropriate cell in the spreadsheet.  It does the rest of the math for me.

This might sound like a lot of work, but it really only amounts to an hour or so every two weeks.  I keep all our receipts, and check them against our bank accounts as I enter the numbers.  This method has the added bonus of quickly alerting me to any suspicious transactions on our accounts.

Since showing is better than telling, I’ve created a version of my spreadsheet on Google Docs, linked below.  The numbers are all fake, but the basic set-up is the same.  Notice the difference between “Savings” and “Net Cash”—there are dollars left in our bank accounts at the end of the month that are not savings, but monies allocated to specific budget “envelopes.”

We’ve saved a lot of money this way, enough that we were able to put a solid payment down on a new car last fall.  In a few years, we’ll have enough saved for a nice down payment on a house.  Interestingly, I’ve also found this approach frees me up to spend a little more on myself: when I know that there’s a certain amount of money available, I’m more comfortable spending it than when I was just trying to spend less than I earned.

Any questions?  How do you approach budgeting?