This blog is extremely personal to me. I want to share with you how I struggle with keeping to a budget. I think by doing this, it will help me become more accountable and do a better job with my budget moving forward. I know for my husband it is especially frustrating to have me text “don’t use the debit card anymore until further notice” because we are “broke again”. It also hurts my self-esteem. For example, as a leader in my company, if they are taking up money to give to someone (say for a fundraiser, wedding gift, major illness, etc.) I am expected to contribute. However, when you are “broke”, it’s really embarrassing not to be able to pull out even $5. Knowing this, are you still jealous of those people who make over $100K a year? Some of them are like me and have less money than you do in your wallet making $30K a year.
The truth is, paying bills is the easy part. You know exactly how much they are and when they are due. You send in the amounts due and really have no control over that money each month (it’s just simply gone). Sad, I know… People that favor keeping a high credit score are really good at this game. It’s the other money in your budget that is tricky…the part that you use to cover all the “variable expenses” (like food, gas, entertainment and misc. spending). That is the part that takes self-discipline, which as you know by now is an area I need some improvement.
Unfortunately, to reach financial freedom means a lot of sacrifice. When you have a mountain of debt to contend with, this period of sacrifice can be quite lengthy. For us, it will take at least two years to payoff consumer debt before we can begin work on our federal student loans. Of course, you can go about it any way you wish, but generally you are not going to be saving money and buying a lot of things you want if your goal is to eliminate debt in a timely manner.
I am going to share with you where I screwed up this week. This is nothing new to me, actually it happens pretty often. However, this time, I am committed to learning where I went wrong and how to prevent it from happening again.
So, this pay period, our budget was derailed in the first five days! Once again, I under-budgeted in our food/gas/misc category. This is exactly what happens when you aren’t paying attention and/or aren’t being honest with yourself about how much you actually need to budget (not what you wish to get by on).
Here is the breakdown…My take-home paycheck on August 16th was $4,413. Today, just five days later, we have $615 remaining in the bank account and $741 worth of bills left to be withdrawn. Add gas we will need to buy for the next 9 days to that total and we are approximately $250 over-budget. Now, in order to avoid over-drafting our account, we are going to have to use one of the credit cards I just paid off to supplement until next payday. I will pay it off again next pay period; however, it is a hard lesson that hurts morale quite a bit.
So, what went wrong? Really and truly, I should have had a cushion to help deal with this. The reason we didn’t is because our alternator went bad last week and we had an unexpected expense of $450 to a mechanic (thankfully we had AAA to cover the tow bill). This expense was completely necessary as it is our primary family vehicle. However, since I wanted to continue being “gazelle intense”, I still paid off the two credit cards I had planned to with hopes that we would be extra tight with our spending. Well…Here are the numbers. You can see where we overspent quite easily.
Starting with the $4413, I immediately scheduled online to pay off the two credit cards ($2452 total), the utility bill ($473), cell phone bill ($206), the cable/internet/security bill ($148), our monthly subscriptions ($50 for Audible, Netflix and XM Radio), and a minimum payment on our Walmart credit card ($178). With the unexpected car repair of $450, we were left with about $456 to spend on food/gas/misc. I normally like to have at least $600 but we are trying to be frugal (or at least wishing to be).
Another major goal I had this pay period was to buy a month’s worth of groceries at one time to do my make-ahead meals (this should save us money next pay period). How was I supposed to do this with a tighter than usual budget? I suppose I was hoping for magic? Yeah, this plan was doomed to fail. And I refused to think it through until the damage was already done.
What we actually spent on food/gas/misc. Thus far (five days since payday), we have spent $371 on groceries, $21 on gas, $46 at restaurants (not good), $33 on lawn care (which I forgot to budget for), $39 on Audible books (entertainment, not budgeted for), $45 at Target (went there with my friend on girl’s night and impulse bought a couple things not budgeted for) and $31 on Amazon (headphones for husband, also not budgeted for). We still have a check outstanding to be cashed for $70 (I hate using checks!) and about $100 needed for gas for the next nine days. Meanwhile, we also need to buy diapers for this newborn that is due to arrive in 3 weeks!
What I’m seeing here is that I should have budgeted more for food/gas spending and should rein in the entertainment spending (Target, Amazon and Audible). That being said, however, is it really feasible or smart to have a zero-based budget that has absolutely no allowance for entertainment? Maybe $115 is a little much for two weeks, but perhaps $50 could be justified?
I’m going to give this a lot of thought when I prepare the budget for next pay period. But basically, don’t stick your head in the sand and pretend it will all be okay. It won’t. While I was excited to strike off two credit cards at once, I really didn’t have the funds to justify paying them both off this period. That combined with a little overspending on entertainment and this pay period’s budget was busted less than half way through!