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January Budget Update

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Last month I fell off the frugal train pretty hard. A tiny portion of the spending was, in my opinion, for the best (e.g., it cost a couple hundred bucks to have our wills/power of attorney drafted and notarized). But overwhelmingly, the spending was really not a necessity, but a luxury. For instance, I bought family season passes to the zoo. To be absolutely fair, I’ve been thinking about and wanting to buy season passes to the zoo for nearly a year but the price has held me back. For whatever reason, I threw caution to the wind this month and, without even having saved up in advance, threw the cash down and bought us some passes. I will certainly make good use of them and I’m happy to have them (already gone twice with plans to go tomorrow, too!), but I do think the purchase was a bit frivolous and could have been better planned by saving up instead of just spending. This has made me re-think how I will budget.

Remember how I mentioned last month that I was just going to have a “buffer” of money that I’d allocate throughout the month (this was instead of having a “miscellaneous” budget)? Wellll, I don’t think that idea worked out too well. I pretty much spent the money real quick as if it was “fun” money, and then spent the last half of the month wondering where all of our money went! Lesson learned!

In addition to this expense, I spent nearly 50% over our grocery budget for the month. Want to know the super scary part??? I honestly have NO IDEA what I got to show for it!!! I didn’t stock up on anything, our freezer is nearly empty, and I seriously don’t know where all this money went! It’s like it was just flying out the window!

I do know that I made 2 trips to Costco during month (which always costs more than I’d like so I try to limit trips to once per month), but realistically this does not account for the full overage! The thing about my grocery shopping techniques is that I like to try to meal plan and make one grocery run per week (so I only buy what we need, keep costs low, etc.). But I made SOOOOO MANY grocery trips last month! Most of the trips were below $50, but it adds up if you go 4-5 times per week!!! Here’s what some of my entries looked like for the month:

  • Fry’s Grocery $39
  • Sprouts $19
  • Safeway $9
  • Frys $132
  • Sprouts $17
  • Sprouts $12
  • Fry’s $6
  • Albertsons $6
  • Sprouts $25
  • Costco $125
  • And so forth…..You get the point.

Sooooo many trips! So even though the majority are pretty low-dollar purchases, they add up quickly!

The good news is that writing here provides me with a big wake up call and slap in the face! It’s impossible to blog about your shopping habits and monthly spending without INSTANTLY realizing when there’s a HUGE, GLARING problem in your face!

Last month we experienced the problem. This month we will work on fixing it (and we’re already on track, with grocery spending well below budget so far and a new budget software to help me track my expenses!)

So without further adieu, here’s how last month shaped up:

January’s Expenses

Item Amount Spent
Rent 1055
Electricity 158
Water 53
Natural gas 18
Sprint (2 lines) 114
Cable/Internet 99
Car Insurance 49
Health Insurance 394
Trash 35
Preschool 1149
Gift-Giving 17
Wills & Power of Attorneys 211
Personal Maintenance 25
Restaurants 112
Entertainment 96
Groceries 572
Gasoline 47
Clothing 35
Parking 9
Toddler Pull Ups/Wipes 131
Postage 9
Debt 1784
Savings 385
Total Spent 6557

 

Let’s talk about some of these categories….

 

Gift-Giving ($17)

The gift-giving was a $14 wedding gift (remember my trick to spend super low on gifts, but still get something the recipient would want/use?), and $3 for cards from Dollar Tree. I sent one card to the wedding couple, one card to a friend expecting a baby (I also sent one of my old books from when I was a child, along with a sweet personal message to the baby about how much the book meant to me and I hope it means as much to her one day, blah blah, super sentimental stuff but also super cheap), and kept one card for this month.

 

Personal Maintenance ($25)

I usually spend nearly nothing on personal maintenance, but not so much this month. I went to one yoga class ($10) and got my eyebrows waxed ($15 for wax + tip).

 

Restaurants ($112)

 Generally we budget $100 for restaurant-eating (this is usually two “real” restaurant trips per month OR some combination of one restaurant meal and 2-3 cheaper options like Jason’s Deli or fast food, or no restaurant meals and all cheaper options, etc.). We went over this month by $12.

 

Entertainment ($96)

 Here’s where things really get painful! I bought season passes to our zoo ($70 for the family season pass), $21 on drinks with a friend (I put this here rather than “restaurants” because it was really just hanging out at a bar, as I had a friend come to town that moved away 2 years ago) and $5 on a Kindle book that was a total splurge purchase. I always, always use the library for books but there was a flash deal on this book (typically a $20 book) and before I knew it I was typing in my password to purchase. So, yeah. Total failure on this category for last month.

 

Groceries ($572)

Aaaaahhhhhh! How on earth could I spend $572 on groceries (normal budget = $400) without even knowing what I got, having nothing extra, nothing stocked up, etc??? Failure on this, too!

 

Savings ($385)

  • 3-6 months expenses $25
  • Travel/Christmas $25
  • Dental/Vision $125
  • Semi-Annual Expenses $100
  • Toddler Birthday $10
  • Savings for Roth IRA $100

Note, I typically also save $200/month for my car repair fund, too, but had to forego it this month so that I could use that money toward some of the other overages, discussed above.

 

Debt ($1784)

  • Car payment $1000
  • Student loan payment $453
  • License fees $256
  • Medical bills $75

Note, I had initially budgeted for an additional $100 to go toward my student loans (to keep the interest from accumulating), but also had to divert that money toward other overages, discussed above.

 

Final Thoughts

There’s not a lot more to say on the matter. I know I messed up last month. Fun fact: when I type up my budget update, I use an old template (happens to be from the month of October), so I was able to see that during that month we were working with less income, and yet made a larger debt payment than in January. Blah!

So there you have it. I’m sure many must be disappointed by my spending this past month, but I am merely mortal. I really think this was my first month that presented a major stumbling block in terms of spending (you may disagree, but that’s my opinion; we’ve had other overages, but typically for dental work or car repairs or things that weren’t merely frivolous spending). I realize what’s happened, have taken steps to change my actions, and think that this can serve as a learning opportunity for me. If you aren’t careful with budgeting your income, it really does just disappear into thin air. You HAVE to be vigilant, or else it will be gone! Lesson learned.

 

What’s your biggest budget-buster? Where are you most likely to overspend?


Living on Last Month’s Income

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I started my YNAB (You Need a Budget < not an affiliate link) trial and have viewed the “getting started” video (several people said these classes really helped).

So far, I’m not sure this is for me. But there is one aspect of YNAB that I am getting really excited over: living on last month’s income.

Now, this isn’t rocket science or anything. I don’t know why the thought hadn’t occurred to me before being introduced to YNAB. I’ve even had people mention it in the comments before when I’ve talked about our variable income (the main problem with doing a zero-based budget at Dave Ramsey suggests). But it always just seemed so daunting and scary to try to save up enough money to live off of last month’s income.

But now I see the light.

Doing this will solve so many of my budgeting “issues.”

First and foremost, it resolves the issue of not knowing exactly how much we will be making during the month. Also, I’ve mentioned how I’ve had a hard time waiting until the end of the month in order to make our snowflake payments out of any surplus funds we have from the month. Now I’ll have all the funds up-front so I can make these payments immediately at the beginning of the month. And it is my hope that it will make sticking to my budgeted categories easier because there is ONLY “x” amount of money, and that is it (currently, I’ve tried to do that with the money envelopes, but it hasn’t stopped me from swiping my debit card when needed for the girls’ birthday even though I was out of money).

By living on last month’s income I’ll know, from the beginning of the month, exactly how much can be paid toward each variable expense. That money will get budgeted and/or spent and then I will literally be left with only “x” amount for groceries or spending money, so going over budget is not an option. If I really need more money in a category (like gasoline), then I’ll have to take the money from another category where I’ll have to get by with less (like personal maintenance). I like this flexibility, and yet the rigidity of the structure, too.

What I’m not “sold” on yet is the actual software, itself. I can’t even explain why, but I don’t like the way the system is all set up. I much prefer my usual Excel file spreadsheet. But that could just be a “comfort” thing. I will, indeed, use the YNAB software for a month to give it an honest chance.

Honestly, though, I’m excited about the whole “living on last month’s income” thing. I think it will be a positive change for me, and the saver in me likes that it essentially provides one additional month as a “buffer” should worst-case-scenario happen that disrupts work.

But, from a debt perspective, what does this mean?

I’m still crunching the numbers (hope to get a budget update up later today, Friday at latest), but I’m thinking this will probably mean no (or very small) snowflake payments this month. Instead, I’d be setting that extra money aside until I can build up enough to live on for a full month. The YNAB class said it takes most people 4-6 months, but with all our extra income lately, I think we can do it in 2 months. We shall see.

In the meantime, I’m going to create a new subaccount of my Capital One 360 savings called “one month’s income.” I’ll use it as the place where I stash the extra money until we get to one full month’s income (and, thereafter, it will be used for storing our income until the start of the following month). Make sense?

 

Have you ever lived on last month’s income? How long did it take you to build up a full month’s income? What were positive experiences? Negative experiences? What do you think of YNAB?