Create a budget, and stick with it

we’ve got new numbers to try and follow and we’ll see what happens. i’m hopeful (again) that this will work this time. i feel more committed to this goal this time around than i think i have ever before. wish us/me luck!

i set up a bi-weekly budget, and i think we’ve adhered to it for the most part, except we had a bunch of extraneous expenses this month (i needed jeans, and i had to go to the doctor, etc.) that put us back, but i think this is a good start. if nothing else, the budget is less than what hubby gets paid every two weeks, so when there are extraneous expenses, we have a built-in cushion. at least we have one in theory, anyway. we’ll keep working on it..

he has to work and asked if i wanted to attend the seminar. sure, why not? maybe i’ll learn something that i can actually apply to real life and dig us out of our hole.

i think the thing to do is to have a pre-emptive strike against over-spending. i need to ask him to change his direct deposit so we have a few hundred going into the savings account(s) every couple of weeks rather than into the checking account, where it’s just going to get spent on whatever. yep, i think that’s the thing to do.

it’s gotten me thinking about more than just the immediate situation about simply getting out of debt. it has gotten me to think about the future, what i want to be able to have money for in my life and where i want to be financially-speaking when it comes time to retire.

it’s really got me thinking about both the time-value of money as well as opportunity costs. these concepts aren’t new to me, i’m an accountant and i studied economics, but sitting down and reading it in black and white and then applying it to my personal situation has been a real eye-opener. the key is the emotional component of money. in business, it’s easy to think about it in sheer number terms, but there’s more to the picture when it comes to personal finance.

so i added a list of things that i know i want to save up for on my budget worksheet, about how much i think i’m going to want or need each year, and now i have to put the wheels in motion to make it happen, most likely by setting up automatic withdrawals and tweaking my direct deposit.

it also dawned on me that every month, i write a pile of checks and set up a bunch of automatic withdrawals to pay a pile of bills and before i know it, every dollar i earned is out the door to go work for someone else. granted, there are some things that you gotta have, e.g. a dwelling, and arguably, a car, utilities, etc., but nevertheless, all of the wasted money, money spent on things we’ve consumed or simply haven’t kept track of where it went, that money should be working for me so that someday, i don’t have to work for my money. i’m very hopeful that 2006 will be a major turn-around year for us. i’ve got to remember this when i start getting ancy about going on a vacation, buying clothes, eating out, etc. i’m not going to become a monk, i still want to enjoy life and what the world has to offer, but again, i’ve got to strike a balance between now and later.

can i afford it?
am i willing to forgo something else, be it now or later, for what i want to buy now?
how am i going to pay for it, cash or credit?

some very good things for me to think about, indeed.

anyway, i was taking another look at things last night (imagine that) and i think if i can make ballpark estimates of the things we are going to spend money on over the course of the two weeks following payday that we will at least have a truer idea of where we’re going to end up. i’m hopeful that will help eliminated any unpleasant surprises.

also, after revisiting this yet again, i am still dumbfounded at how we have plenty of money coming in and yet we’re always strapped by the time the end of the month rolls around. there is plenty to cover the bills. there should be plenty to put into savings and pay down credit cards. i’m going to have to keep my eyes peeled for the unusual/unplanned things that rock the boat when they pop up.

for example, i know april is going to be goofy because the car registrations are due and i just switched the auto insurance to a monthly billing cycle rather than quarterly. but from what i can tell, we will be back to ‘normal’ in may and we technically should be able to get back on track to paying off the cards and putting money into the various savings accounts. i will be interested to see how this plays out…

one for me and one for hubby so we can track our expenses for the next few weeks. the book says to write down everything you spend money on, soup to nuts. i don’t really think i blow a lot of money on little stuff like candy, pop, newspapers, etc. i do think it will be alarming to see all the money spent on eating out (if we go out as much as we typically do). i’m really hopeful that this will work this time. i want to be surprised by what i find and it be enough to make a permanent change in how we handle our finances.

and so far, it hasn’t told me anything i don’t already know about reviewing expenses and creating a budget and paying down debt. what i really need to figure out is how i can say no to hubby when we can’t go out to eat or we can’t get whatever it is he wants to get. the problem is, i want these things, too, and i’m tired of being in debt and still not having the things i need and want. it’s so aggravating.

i tried to be as honest with myself about what we really spend our money on and i think … i miss having a doggie … that was ross. and i think that we’ll be better prepared for what comes our way this month with these new insights in mind. i certainly hope so, anyway. if we can actually cut back, that will be a major accomplishment.

this will be a good goal to try to tackle this weekend. i need to take a look at our federal withholding and i may as well take a look at this while i’m at it. now, if i can just “be more focused,” i’ll get it done :)