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Budget Lesson, Part 2
Today, I am continuing the detailed examination of my budget. Please see part one to catch up.
This time, I’m going to look at my monthly bills. These are predictable and recurring expenses, though not all of them are entirely out-going.
Let’s dig in: [Read more…] about Budget Lesson, Part 2
Budget Lesson, Part 1
budget” width=”300″ height=”185″ />Over the next few weeks, I will be going over my budget in detail.
The first section is income, but that’s straightforward. A line for each income source, bi-weekly, monthly and annual totals. Simple.
Before we start, a word on the organization. There are five columns:
- Category – This is the description of the line item.
- Cost – How much do you pay for this item?
- Time – What is the frequency of the payment? Valid values are ‘m’, ‘q’, ‘y’, ‘w’ for ‘Monthly’, ‘Quarterly’, ‘Yearly’ and ‘Weekly’.
- Monthly – Cost and Time are combined to calculate the monthly expense, to make it possibly to budget. If this is $100, I need to set aside a C-Note each and every month to make the payment when it comes due.
- Yearly – This column is mostly informative. It’s helpful to see this in comparison to my annual pay.
The first section I am actually going to address is discretionary spending.
- Groceries/Dining $475.00 – We don’t budget heavily for groceries, which would be a surprise if you saw me. At the smallest I have ever been, fit, I was never small. We shop smart, buy in bulk when it makes sense, and rarely eat out. We also keep cooked rice and beans in containers in the refrigerator as a cheap and healthy way to stretch almost everything we eat.
- Discretionary $250.00 – This gets used for household items, like toilet paper and soap. It also get used for the odd book or movie, or to cover the gaps between the other categories and reality.
- Baby stuff $60.00 – We have two children in diapers. ‘Nuff said. This category does get progressively smaller as the baby items are outgrown and the children get potty-trained.
- Gas/oil $200.00 – Gas and auto-maintenance. This is actually higher than monthly costs, allowing us to set some aside for larger maintenance issues.
- Clothes $15.00 – All of our dressers are overflowing, so this is strictly replacement cost for the time being. Our kids wear a lot of hand-me-downs.
- Blow Money $50.00 – Occasionally, habitual shoppers need to shop. If they don’t do it on-budget, they will do it off-budget and kill the whole idea.
Initially, we used a “virtual envelope” system. We had a spreadsheet and every time something was spent in this category, we entered the amount and stopped when the category was spent. Didn’t work. We are going on a pure, cash-only system as of the first of the year. No money, no spendy.
Karate Guess So
“Walk on road, hm? Walk left side, safe. Walk right side, safe. Walk middle, sooner or later, [makes squish gesture] get squish just like grape. Here, karate, same thing. Either you karate do “yes”, or karate do “no”. You karate do “guess so”, [makes squish gesture] just like grape. Understand?” -Mr. Miyagi
It occurred to me that lately, I’ve changed my day-to-day cash flow plans a couple of times.
A year ago, I was running on a fairly strict cash-only plan.
A month ago, I was running on a strict budget, but doing it entirely out of my checking account.
Now, I’m loosening the budget reins, and moving all of my payments and day-to-day spending to a credit card, including a new balance that I can’t immediately pay off.
The thing is, changing plans too often scares me. Like the quote at the beginning of this post, I start worrying about being squished like a grape.
The simple fact is that any plan will work.
If you want to get out of debt, just pick a plan and run with it. If that means you follow Dave Ramsey and do the low-balance-first debt snowball, good for you. Do it. If you follow Suze Ormann and do a high-interest first repayment plan, great. Do it. If you follow Bach and pay based on a complicated DOLP formula to repay in the quickest manner, wonderful! Do it!
Just don’t switch plans every month. If you do that, you’ll lose momentum and motivation. Squish like grape! Just pick a plan and go. It really, truly does not matter which plan you are following as long as you are following through.
This applies to other parts of your life, too. For example, there are a thousand fad diets out there. Here’s a secret: they all work. Every single one of them, whether it’s Weight Watchers, slow carb, or the beer-only diet. The only thing that matters is that you stick to the diet. If you manage that, you will lose weight on any diet out there. Except for the jelly bean and lard diet. That one will make you extra soft.
Another secret: the productivity gurus are right. Every single one of them. David Allen, Stephen Covey, Steve Pavlina, and the rest. They all have the One True Secret to getting the most out of your day. Really. Pick a guru and go! But don’t try to Get Things Done in the morning and do 7 Habits at night. Changing systems, changing plans, changing your mind will make you sabotage yourself.
The real secret to accomplishing great things, whether it’s paying off $100,000 of debt, dropping 40 pounds in 3 months, or tripling your productivity is to do it. Just get started and, once you’ve started, don’t stop. If you keep going and stay consistent, you’ll accomplish more than anyone who hops from system to system every few weeks.
Sunday Roundup: Father’s Day
On Father’s Day, 3 years ago, my third and final kid was born. My kids are all horrible brats and I love them dearly.
I wouldn’t give up fatherhood for anything. Watching my kids grow and learn, steering their development, and teaching them how to navigate life is the most fulfilling thing I’ve ever been a part of. Also the most frustrating. I can’t imagine being anywhere else, not being with my kids. I have no respect for deadbeat parents.
I am incredibly grateful that I had a proper model for manhood and fatherhood. My dad taught me the concepts of honor, integrity, and responsibility. I couldn’t be the man I am now, if he wasn’t the man he is. Thanks, Dad.
Best Posts
Sometimes, the coolest things in the world are the things most likely to kill you. Call me crazy, but I’d happily strap a 1200 cc propeller to my crotch and find out what 10,000 feet looks like.
Via Budgeting In The Fun Stuff, Super Frugalette reminds us that, when there’s a significant amount of money involved, spending a few hundred dollars on an attorney isn’t wasteful.
Fivecentnickel discuss multi-level marketing. It doesn’t matter which company you are in, if your downline is more important that your product, it’s a bad business model.
Keith Ferrazzi shows us how to improve our body language when it really matters.
When I started driving, I tossed my car in a ditch going way too fast. Naturally, it was my parents’ fault for giving me the curfew I was trying to beat. They never would have bought it if I would have told them I was driving like my grandma and it jumped into the trees by itself. Why does the FBI think that’s believable? Corruption, maybe?
Financial Samurai talks about living a life without regrets, which is a personal goal of mine.
Food storage will become critical when the zombies come.
Beer is good. Even the cave-men thought so.
Carnivals I’ve Rocked and Guest Posts I’ve Rolled
3 Ways to Keep Your Finances Organized was an Editor’s Pick in this week’s Festival of Frugality. Thanks!
5 Reasons Your Wealth Isn’t Growing was included in this week’s Carnival of Personal Finance.
Money Problems: Insurance was included in the Totally Money Blog Carnival.
Unlicense Health Insurance was included in last week’s Carnival of Personal Finance.
Thank you! If I missed anyone, please let me know.
Yakezie Blog Swap
Last week, the Yakezie shared what they would do with a single financial do-over.
– Melissa from Mom’s Plans shares her biggest financial mistake at Barbara Friedberg Personal Finance: Opening an eBay Store and Using Credit. It is a great story about how not to grow your business and how competing priorities can pose a real challenge.
– Budgeting in the Fun Stuff shares her biggest financial mistake and potential do-over at Super Frugalette: Investing in a Friend’s Business. Its a good, but costly lesson learned about small business.
– Eric from Narrow Bridge Finance shares how He Wouldn’t Have Paid Down His Student Loans So Fast at The Saved Quarter. This may seem counter-intuitive, but he has some good points. Check it out.
– Mr. S from Broke Professionals shares how He Wouldn’t Have Bought a New Car at My Personal Finance Journey. This has some great analysis, especially considering the new car was a hybrid!
– The College Investor posted at Wealth Informatics: What you should know when you are investing?
– Wealth Informatics posted here: If you had one financial do-over, what would it be and why?
– Barbara Friedberg shares how She Was Scammed at Mom’s Plans. You have to watch out for the hard sell!
– Joe at Retireby40 tells us about How He Invested his 401(k) in Company Stock right before the dot com crash, at Financially Consumed. A financial adviser may have helped avoid this one!
– Financially Consumed shares his Car Purchase Do-Over And Over at Retireby40. Car addicts have it tough!
– LaTisha from FSYA shares her do-over story in It’s Never Too Late at Little House in the Valley. Sometimes the do-over is quicker and more painless than most.
– Little House yell’s Do-Over! Do-Over! at FSYA Online. It looks at the road to saving more, starting on an elementary school playground!
– The Single Saver asks, What Are The Long Term Consequences of Small Purchases at Totally Money. A cool post on how past purchases cost future returns!
– Miss Moneypenniless from Totally Money shares her story of Vacationing to the Brink of Bankruptcy. Sometimes a vacation can be fun, but the bills afterward may be daunting.
– Super Frugalette shares How a Lawyer Could Have Saved Her $24,700 at Budgeting in the Fun Stuff. Maybe lawyers are worth it sometimes?
– Jason from Live Real, Now shares how he Amassed $90,000 of Debt at Debt Eye. A good lesson in living a little more frugally.
– Kevin from Debteye shares his do-over: Not Buying a House Right Out of College at Live Real, Now. I have said it before that buying a house can be challenging right out of college.
– Penny from The Saved Quarter shares how She Would Have Finished College Before Having Kids at Narrow Bridge Finance. An awesome story that has will soon have a happy ending!
– Jacob from My Personal Finance Journey shares how he was Scammed on eBay at Broke Professionals. An important lesson for anyone selling or buying online.
– Marissa from Thirty-Six Months shares how she Accumulated a Ton of Student Loan Debt at So Over Debt. If you are going to live the life, you’re going to pay the price!
– Andrea from So Over Debt shares How She Would Have Started Saving for Retirementat Thirty-Six Months. I would love to read a post on each of the stories you mentioned getting to where you are now!
– Below Your Means shares his story about A Missed Investment Opportunity. There are so many times I wish I could have gone back and bought a stock!
Get More Out of Live Real, Now
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Have a great week!
The Things That Bring You Here
I’ve been walking though my analytics data. That is the Big Brother software I use to know everything about each one of my dear readers. It’s all part of my master plan to rule the world. Muwahaha!
Some of the results are interesting.
The single most-used search term to find this site is “slow carb diet“, which is great, because I really enjoyed writing that post. I’ve been slacking on the diet lately, but I’m still down more than 30 pounds. I’m currently ranked #3 in Google for this term. If I move up 2 more spots, I’ll outrank Tim Ferriss for his own product. If I aggregated all of the “slow carb” variations, this post probably accounts for more than half of my traffic from Google.
Many of you come here by searching for “how to have a perfect life“. I’ll do everything I can to help you achieve that, but it’s going to take work on your part. There are no shortcuts.
“Beat the Check” is another popular search term, but a very bad game to play. It’s almost impossible to win it, since the Check 21 Act of 2004.
It’s interesting that “trained husband” brings a few of you each month. My question: are you shopping, or exploring a new fetish? Don’t be shy.
I’m a bit amazed that “zombie wheels” is something people actually search for, but 140 people hit Google looking for that term every month, and a few of them make it over here.
“How to stretch a meal“, “things you should buy online“, and “unsecured loan advice” are some of the top personal finance terms bringing you all in, though “how to make a bunker” and its variation are popular, too.
“Hoe can you force your wife” is a bit disturbing. Most of the results are naturally for sex. I can’t help but hope that I’ve either really disappointed this visitor, or convinced him that force is a bad idea.
“How much did a pound of gold weigh in 1854?” is a search that makes me giggle. To the best of my knowledge, the troy scale has been used to weigh gold for a lot longer than that.
That was a fun little stroll through my statistics. Hopefully the fact that I used “fetish” and “sex” in a post will draw more crazy search terms.
How did you find me? Inquiring minds want to know, so please tell me in the comments.
