Thursday, October 17, 2013

Obsessed with Budgeting

*I had not yet completed this draft, when something unexpected happened. But rather than start completely over (and before anything else happens) I'm going to update this post with comments in italics. 

One of these days, I might have something to talk about other than my budgeting strategies. But not today.

Every so often, I go to my now-paid off high-interest credit card account just to see the 0 balance. It helps.

I also re-read some of the book that started this whole thing. I realized I was missing an important element: clarity.

While I have been inputting every dollar into the Magic Little Notebook, I'd tear out those pages when they filled up and kept my eye on the bottom line(s). Now I have a ledger-type notebook where I track every expense in its true budget category and then total the monthly expenditure. It will take a few months of doing this, but then I will have clarity. Am I not budgeting a category adequately? Am I overspending? Even though I never go over-budget, I still borrow from one category to pay for another at times.

I also made a few more changes. Every so often, I would use the Miscellaneous account to buy myself something, but I'd go back and forth from feeling guilty about it to feeling entitled...and then back to guilt. In the end, I decided to give myself a weekly allowance, just like the girls get. (The same amount, even.) And I added yet another budget item for Major Purchases. We still have tube TVs and the color is already out of whack on one of them. Eventually, while we won't need it, we will want a new TV when it completely goes. And what if the refrigerator dies? If it happened tomorrow, it would have to come out of savings, but wouldn't it be nice to have it covered from its own account? It will take quite a few months for it to be funded enough to actually cover a cost like a new TV, but we have to start somewhere. I'm starting with $5 a week. *The TV did completely die. $5 wasn't enough to cover it, and I had to take it from savings, but it validated the need for this new line item.

I canceled the DVD aspect of our Netflix account and decreased the Miscellaneous category to cover these new items. The DVD queue was all made up of movies of my choosing and I've generally used the Misc category for household expenses; now the numbers have just been re-organized.

Oh, and for those that think we shouldn't have any Netflix account whatsoever (or immediately buy a new tv), I get it, I do. But I also get that complete deprivation does not, in the end, work for me or my family. We all enjoy Netflix at the end of a long day, and it's a relatively cheap form of entertainment. It's $9 a month. I may not be rich, but I can afford that. While I may have had to dip into savings to buy the new TV, it helps tremendously when the 3 of us can't agree, or just need some alone time. For our peace and sanity, it was totally worth it. And I bought the absolute cheapest (and smallest) new TV I could find.

I've changed my mind about 27 times on what to do each time my credit card monthly minimum decreases by $20. I'm committed to putting that first $20 monthly into the Car category so that I can slowly continue to build that back up again. After that, I think about adding new categories like short-term savings or vacations, or adding to other currently existing categories, but I keep re-thinking it. It will probably take a few months before that will happen anyway, and hopefully by then, I will have the clarity from the long term tracking notebook to make thoughtful decisions.

The really good news is that I have put together a Presents budget for both upcoming birthdays and Xmas, and I'm fairly certain I will be able to fully fund the budget without dipping into my savings! (See? I don't even mention the credit card anymore!)

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