Personal budgeting: what was once taught in every high school Home Ec class now seems like a lost art. But personal budgeting is something we believe in here at EverydayCPA. Today, we will talk with one of our Tax Associates, who also happens to be an expert on personal budgeting – the tips and tricks you can use, and the traps to avoid!

Welcome to the EverydayCPA channel, helping small business owners and families better manage their businesses and their families. This program will help you learn and adopt strategies and tactics on business and family accounting and budgeting, credit management and improvement, and ways to build and grow savings to help you compete, win, and succeed and hopefully live a happier healthier life!

Personal Budgeting is More Important than Ever

This is Kelly Coughlin. I’m the CEO of EverydayCPA. Today we’re going to talk about personal budgeting and spending. I’m going to do this for two primary reasons: First, families and households have been dealt an incredible curveball with this pandemic. Their balance sheets are destroyed, their incomes have been, in many cases, reduced or eliminated, and they need help. Second, I see many younger people using virtual currencies, stock trading, and currency trading schemes as a way to try to hit the home run. My fear is for most this will result in disaster; for a few it will produce a home run but for many it will produce not just a strikeout but possibly get them kicked out of the game!

Why out of the game? I’ve seen it happen; a self-appointed expert trader spouse invests the savings that was earmarked for a down payment on a home and it’s lost on a bitcoin or stock or currency trade.

So today we’re going to start by talking about some very basic and simple things related to budgeting and spending. For that, I have as our guest Dawn Gray who is, frankly, an expert at this. She does some seasonal tax work for TurboTax and she works for EverydayCPA on tax returns. Dawn also helps our clients with tax debt who need to get on an IRS-approved budget for a payment plan, a compromise, or a total write-off. She helps them use Mint to get on a budget and spending plan but, most importantly, Dawn is one of those few remaining coupon clippers! One of my favorite sayings is even a small leak can sink a great ship don is an expert at plugging the small leaks

Dawn Gray: Tax Expert, Coupon Clipper

So with that. I welcome Dawn Gray. Hello Dawn! Ready to talk about one of your favorite topics: budgeting, spending, management, and coupon clipping?

Dawn Gray: I sure am! Where do we begin?

Kelly: Why don’t you tell us about you and your background? I know a little bit about it. Your first career was a teacher and now you’re in the tax business, so give us a summary of who Dawn Gray is and why she’s on this talk show.

Dawn: Well, I live in Minnesota. I have raised a son and a daughter who are now both budget conscious adults and, yes, my first career was in elementary education. I have a master’s degree in elementary education and but now my second career is in tax and accounting and I work with Kelly at EverydayCPA and I also do seasonal work with TurboTax.

Kelly: You’re in the TurboTax Live program aren’t you?

Dawn: Yes I am.

Kelly: Well, thanks for taking time out of your busy career to speak with us today about budgeting. I have personally learned quite a bit from you. How do you avoid being one of those annoying coupon clippers that you see at the grocery store?

Dawn: I’m a very stealthy coupon clipper. First of all, when I clip my coupons I keep them organized in a coupon organizer divided by categories. Before I go to the store I make a list, I see what’s on sale, I see what coupons may apply, and I have those ready to go. So that when I’m at the register, I simply hand them over. I’m not holding anybody up, I’m not digging around in my coupon organizer. If I AM a little less organized that day, and I see something that I THINK I might have a coupon for, then I make sure to get out of the way and search for my coupon. But when it’s in an organizer it doesn’t take me long to find it, so I guess organization is key.

Kelly: I have to tell the audience about Dawn helping me get one of these Nespresso machines. I love espresso but I didn’t want to pay $150 or $200 for a machine. So Dawn, with her tips and tricks, helped me get one for around $35!

And then there’s the Hellman’s Mayonnaise story. One time in the office, I heard her barking at the Hellman’s mayonnaise people because the mayonnaise that she bought – the design of the jar was such that she couldn’t get about 10 percent of the product out. She pounded on them – respectfully – and then they ended up sending her three dollars four dollars five dollars’ worth of coupons!

Dawn: It was an honest complaint. I wasn’t trying to manipulate the system!

Kelly: She doesn’t play that way, but it’s always impressive to see her in action.

Prices and Sales: Awareness is Key

Kelly: Let me ask you a question, Dawn. Do you know the price of eggs and milk, roughly?

Dawn: Yes, oh yes I do. You want regular eggs? Free-range eggs? It varies depending on what type of egg. But yes. I know the prices.

Kelly: Here’s another one we all seem to stumble over… How do you balance healthy eating? Organic food, which is costlier, versus low-cost non-healthy eating. How do you achieve that balance?

Dawn: Well, first of all, I don’t think you have to buy everything organic. I think if you know you can buy organic things that are on sale – and when it comes to produce you know they have the dirty dozen; these are the top 12 fruits and vegetables that have the most pesticide and insecticide on them. I think apples and strawberries – any kind of berries are near the top. So I would focus on buying organic for those items when they’re on sale and in season. I’m not going to pay nine dollars for a pint of organic strawberries when they’re their out of season. I just won’t do it. So I may not buy strawberries for a while I buy frozen organic strawberries. Any kind of frozen fruit is usually a lot cheaper, and nearly as good, as fresh. You want to focus on buying whole foods more than processed foods as far as healthy choices. I mean, buy a bag of carrots, a bag of potatoes, rice… make your meals out of whole foods instead of processed, pre-made type foods. They taste better, they’re better for you, and they’re much better for your budget.

Kelly: So, would you agree that the more processing that has happened to a food that comes out of the ground, the more expensive it is? The more hands that have touched it, the more machines that have touched it, and the more ingredients that have been added, and so on. So, one way to budget is to get back to basic eating, basic foods?

Dawn: Correct. You were looking for that balance between healthy and price, there it is. If you can minimize the amount of processed foods that you buy and consume, it’s just better overall. And again, I’m not saying i never buy processed foods, I just try to keep it at a minimum.

Avoiding Daily Budget-busters

Kelly: Okay, what about the morning coffee? We already talked about the espresso machine, but what are your thoughts about that five-dollar Starbucks every morning?

Dawn: Absolute budget-buster. I go out for coffee maybe once a month at the most. I just don’t do it.  You also you need to factor in that I work from home. So if I’m going out for coffee every day, there’s also gas and time that’s not really well spent. So I just find that I make my quality coffee at home I’m perfectly happy with it and it saves me hundreds of dollars over the course of a year.

Kelly: One of the things that I’ve seen, and I was guilty of it in my younger years, was spending money eating out, dining out, delivery… we didn’t have UberEats and Doordash and all these other things then. But I’ve seen how, in going through kind of this budgeting for Tax Resolution and some work on the Mint area, how dining out as a general category  – and I would include grabbing coffee, UberEats, and so on – can be a really big budget buster versus cooking at home.

Dawn: It really is, but again, I’m not advocating to never eat out. I love eating out – I really do. I’m a foodie. I love good food, good restaurants, but I maybe go out to lunch once a month. Again, working from home kind of takes care of that but even on weekends, on my days off, I don’t eat lunch out. And I kind of save up for dinner. I love eating dinner out and if I can find a coupon it’s even better. But I limit going out to dinner to probably once a week. There might be some weeks, or on vacation, obviously it’s more than that. But I really try to limit dinner to once a week.

And I think one thing that during the pandemic I learned – or I should say re-learned – is that I like to cook! I really realized all those days and nights at home cooking for my family that it was way cheaper and way more nutritious. So that’s just kind of carried over and I think I’ll keep doing that. I mean, you can make a delicious home-cooked meal for one-fourth or one-fifth the cost of UberEats or one of those deli food delivery services. They have fees and their menu prices are higher than if you order directly from the restaurant. If you go on the website for the restaurant, check the prices versus what the prices are on UberEats for example. They’re usually higher, you know, instead of 12 dollars per burger you’re going to pay 16 plus fees, plus tip, plus whatever fees they like to tack on. So, the food delivery, the only time I’ve ever done it is when I’ve had a good promotional code. Otherwise, I just don’t do it. It’s just way too expensive and it doesn’t make sense.

Kelly: In the office a couple times, when we’re jammed with work, we’ve talked about getting pizza or something, but you started bringing in frozen pizza instead. What are your thoughts, delivery vs frozen pizza?

Dawn: Again, pizza delivery can be tasty but it’s really expensive. After you figure in the delivery fee and the tip and everything. Of course, Minnesota is the land of frozen pizzas – I think we’re known for eating the most frozen pizzas per capita!

But you can get a decent quality frozen pizza for anywhere from five to eight dollars. Maybe not the two dollar ones, but there are decent brands where you can add your own extra toppings – meats, veggies, cheese, and so on –  and you’ve got a really a much tastier pizza, and you’re still saving over delivery.

Kelly: I remember one late work night, you doctored up a pizza and then said it was about nine dollars total, versus 22 or so for delivery!

Planning, Organizing, Setting Limits

These are all great tips, Dawn. Anything else you would like to share before we wrap this up to help the audience live happily and comfortably without wasting their hard-earned money?

Dawn: As I said, limits. You don’t have to deprive yourself of nice experiences. But you do need to limit them. Dining out is one of my favorite things to do but you simply can’t manage your budget if you dine out too often. It’s hard for people working outside the home; 10 dollars for lunch may not seem like a budget buster, but a month of those lunches will easily top 200 dollars! So, bring your lunch instead, and spend 50 dollars a month.

Another key: organization. Such as organizing coupons. If you don’t like clipping coupons or organizing them, fine, but then be aware of the sales at stores. I basically shop the sales. One of my favorite local grocery stores starts their new sale on Thursdays, so every Thursday I look at flyer. I see what’s on sale. I make a list of things and meal ideas for the next week. Then I buy what’s on sale that week.

I was there a couple days ago and I thought I might want to get a beef roast but it was way too expensive on that particular day. I ended up with a pork roast that was three times the size for literally one-third the cost and we got three meals out of it. That was a good find. Also, at the grocery store things on the end caps – that’s the term for the end of the aisle – are the sale items. If you don’t want to actually look at the flyer, just see what’s on the end caps.

I keep a list of the groceries I need on my phone and I just update as necessary. Not everything I buy is on sale but if i see a really good deal on meat – chicken breasts or boneless pork ribs or ground beef – I stock up a little bit. I put it in the freezer inside a good Ziploc baggie and then I’m good for meat for a while. If staples like olive oil or broth are on sale, I stock up on those. Don’t go crazy, don’t be a hoarder, but do become aware of when the things you use are on sale, and buy them when the price is right.

Kelly: So, plan your menu around price and seasonality and discount.

Dawn: Yes, and in general be aware of prices, how they fluctuate, and at what times of the year.  There are times when eggs are a lot more expensive and then they go back down. So I have taught myself to be aware of those kind of price fluctuations.

Personal Budgeting: Start Young, Stick With It!

Kelly: Great tips. And I think tips and tools like these are a great way for younger people to start really thinking about their budgeting, and even investing. I truly believe that one of the best ways to save, or get a nice return on your money, is by not blowing it on unnecessary expenses.

So thanks for coming on today Dawn. Valuable information, and I am sure we will have you back real soon for more gems of budgeting wisdom!

And thanks to our audience for watching the EverydayCPA channel. Visit us again as we help small business owners and families better manage their businesses and their families. We aim to help you learn and adopt strategies and tactics on business and family accounting, budgeting, credit management and improvement, and ways to build and grow savings. We want to help you compete, win, and succeed – and hopefully live a happier, healthier life!