Create a budget, and stick with it

This week I used my accumulated mattress fund to purchase a new bed. Now I am eyeing my budget and trying to decide what major purchase to save up for next. I decided to save for a new (to me, but used) computer, since mine is barely usable. (I am writing this from my boyfriend’s laptop.) It will take me until the fall to save up the funds I think I will need.

I feel like I am using my financial resources in a more powerful way than I have in the past. The thought of buying a new computer after having planned and saved for many months feels so exciting, compared to making major purchases on credit like I have done in the past (with my exercise machine, stereo, old computer, etc.). The money seems so much more real when you have saved it for a long time. I am much more careful to make wise purchases and get as good a deal as I can. Wow, just looking at a chunk of cash and deciding where to spend it, rather than making a purchase from a place of scarcity (“I don’t have enough money to buy this but I feel like I need it so I’m going to charge it.”).

I am also saving a small amount per month towards travel. The thought of taking a major trip in a year or two, and paying all or mostly cash… wow! Now that’s intoxicating!

Sure, it’s a little more accounting work, but I love knowing that I have funds set aside for the next time I need veterinary care for my cat, car repairs, a birthday/wedding/housewarming gift, some essential clothing item, etc. I am only setting aside small amounts towards each of these a month (only $20 for some, more for others), but it adds up fast! And I believe I can automate some of the work in Quicken so it will be virtually painless.

The car urgently needs new tires, apparently; we’re getting some tonight. I only started this in January, so the car repair fund hasn’t accumulated enough to cover that. But it’s nice to know that it will be there next time.

It seems like there are so many expensive things I need! And the holidays didn’t go as expected either. Perhaps I need to create a “Holidays & Gifts” fund and put into it every month so it doesn’t throw everything off next year.

It’s a bit sobering, because I can’t afford to save or pay debt or spend as much on discretionary items as I thought I could. I found some really large discrepancies between budget and what is actually needed for several fixed/mandatory items like bills and taxes. That’s what I get for letting Quicken automatically generate the budget I started with, based on averages from the past. I should have scrutinized every single line item more closely.

At least this explains the end of the month blues I’m so often singing: “I got plenty left in my budget, but nothin’ in my account.”

Almost every month we spend our entire grocery budget before the end of the month, and then we’re struggling the last weekend of the month. Now I have figured out what we should be spending weekly; We’re going to try to just make one weekly shopping trip every weekend, and make those groceries last until the next weekend shopping trip.

Of course our budget is monthly, so buying groceries weekly may throw things off in the short-term (since there aren’t exactly 4.33 weekends each month and some weekends are the last day of the month, etc.). But I think it will work better overall.

I honestly think I have reached the point where I would rather see my long-term financial goals move forward than go out to dinner, buy another irresistable pair of shoes or add to the mountain of books I start and then set aside to finish someday. Impulse buys are becoming less tempting.

Last night, get this: I was heading home and I knew where wasn’t much fresh food in the house, and instead of heading for the deli section of the supermarket like I used to do, I just bought one bunch of kale and went home.

At the close of July, I am under budget by about $40! (Without being able to measure my actual against budgeted spending over the course of the month, since I just made the budget now.) Woot!

Pretty much everything I absolutely need is paid for from our joint account each month. Now that that budget is functioning, I know exactly how much I need to put in for those fixed expenses each month. So where in the hell does the rest of my money go? All over the place, somewhat indiscriminately, or so it seems. I am feeling very motivated about the new savings and debt repayment goals built into my new budget.

So there are some cute pink vegan shoes on sale for practically nothing at Mooshoes.com. Would I rather have those or my debt repaid sooner? The pink shoes, or more financial flexibility for my house purchase project? The answer is that I am definitely willing to sacrifice some of things I desire, in order to see my longer-term financial dreams come true. Yay!

In my pre-move packing and purging, I was dropping a few nicer items off at the consignment store… and then I thought I should look for a new swimsuit, and maybe a more casual dress to just throw on and look great in, a backyard barbeque kind of dress… and next thing you know I spent $100 and got a swimsuit and three dresses! The worst part was when I got to the checkout and the lady said, “you realize this is one of our new fall items and isn’t part of the half off sale, don’t you?” and I just handed her my card anyway. Two items would have been a nice little way to treat myself, but four seems excessive and not in line with my other financial goals! I immediately had buyer’s remorse the minute I got in my car to leave the store. Unfortunately the consignment store doesn’t take returns.

Part of this problem is not having a budget for my personal spending. And part of the mental block I have about that is how to make it work technically, with two different budgets and sets of accounts in Quicken. But this little incident is a reminder about how important it is for me to overcome whatever blocks I have and just do it!

We have some joint debt on the line of credit associated with our checking account, which comes purely from financial mismanagement and not from any real need to borrow $500. However, that smallish balance has been just sitting there for a year or so. One part of our budget/financial plan is to gradually pay that off! It feels great to get moving on that.