Budget Busters: Mid-Month Assessment

by jolyn on January 18, 2010

in On Budgeting

At the beginning of January, before The Hubs left on his deployment, I made up a budget for January based on known expenditures for the month.

A few things have “come up” since then. *ahem*

Have I mentioned lately that this budget thing is still a work in progress? Baby steps, people.

Is It Possible to Budget Every Single Penny? I don’t think it’s possible to have a crystal ball and know absolutely everything that you may or may not need to spend money on in a given month. HOWEVER. Putting it all down on paper and doing your best to create a zero-based budget at the beginning of the month goes a long way to knowing how you’re going to reallocate funds for those unexpected expenses that do come up during the month so that you can keep on track to achieve your financial goals.

Whew!

Think of a Budget as a Money Positioning System, or an MPS* (Get it?)

Think about how you use your GPS: You get in your car and plug in the address of your destination. Along the way, you realize you need to stop for gas. Then there’s construction and you’re forced to detour. Maybe there’s an accident along the road and traffic backs up. It may take you longer to reach where you’re going, but eventually you will get there.

Imagine never plugging an address into your GPS! What if you just got in your car and started driving around, with no real idea of where you were going? Oh, you’ll end up somewhere all right! But it probably won’t be Disneyland, or any other place you’d like to be, had you taken the time to think about where you wanted to go before you ever left the driveway.

*I have to give credit for the MPS idea to Suze Orman; that’s a funny I heard her use on her show.

Our Budget Busters This Month (so far):

I kept track of every single transaction that has come up so far this month that wasn’t included in our original budget for January. My hope is that, in a few months, I can look back and see how much better we have gotten at this budget Thang.

It’s also very humbling to try to justify every thing we spent money on that wasn’t planned for in advance. Makes you think twice before handing over that debit card…

(Yes, we’re moving to cash, but in increments. Baby steps, people.)

DEBITS: Bills…

  1. $108.54: I underestimated the power bill, despite our freezing temperatures. Whoops.
  2. $39.43: We’re on the hook for the power bill at our rental house until we’re able to procure new tenants. I totally forgot about this.* At least it’s not so cold in Vegas!
  3. $8.00: Another rental expense — one of the association fees went up. I guess I missed that memo.
  4. $7.28: And yet another rental expense! This one for the water bill. Also forgot to factor that in.* Yes, water is cheap in Vegas. As in, the desert. Go figure.
*This is the second month without tenants in our rental. Obviously, I will be remembering these bills for next month’s budget. Unfortunately, so far we are getting ZERO interest from prospective tenants. (Anyone wanna rent a cute little house in Vegas?)

DEBITS: Purchases…

  1. $62.59: Home Depot… The Hubs decided to do some last-minute, much-needed work in the bathroom. (Oh, boy, is that a future post.)
  2. $23.98: Three days before The Hubs deployed, Alabama played in the SEC Championship Game and we decided to splurge for pizza. The Hubs has been a Bama fan since he was ten. Need I say more?
  3. $2.76: I finally found some Fels Naphtha bars of soap at the third place I looked, and I really didn’t care to leave the store without them just because I forgot to take cash out of the grocery envelope before I left the house. I still plan on making laundry detergent from scratch! I’ll be letting you know how that goes. (I do include cleaning products in my grocery budget.)
  4. $8.52: The Hubs and Conner enjoyed some time at Panera Bread the day before The Hubs flew out. I guess he forgot his cash.
  5. $50.00: computer maintenance.
  6. $40.36: I’m just going to call this “Deployment”. It includes purchases made right before, during, and right after his trip from Ohio to Kyrgyzstan. Of course these debits were justified, and difficult to plan ahead of time. One of them was purposefully made at the BX on base as a test for us to see how it would go through. At this point, it looks like there is no “foreign transaction fee” for purchases made with a debit card on base. We do plan on him mainly using cash that he withdraws on a monthly (or so) basis, but it’s vital that he has other options that we know work. We hate the government credit card that they encourage you to use. But that’s another post.

TOTAL DEBITS: -$351.46

CREDITS:

Yes, credits, too, can be unexpected!

  1. $60.00: A refund for a pay-pal tranx that The Hubs was double-tapped for last month. I was expecting this to come through, but I wasn’t going to include it on the budget until the money was in-hand, so to speak.
  2. $16.87: Consignment check from the Thrift Store. I actually didn’t expect to see a profit this month. (Do you consign? That’ll be a future post.)
  3. $9.27: AT&T bill I underestimated. Not sure how I managed that.

TOTAL CREDITS: +$86.14

Budget Buster Bottom Line: -$265.32

That $265.32 up there? Will be deducted from what we will pay down on our snowball this month. Bummer.

At the beginning of January, I estimated $1749.76 would go toward debt. Obviously, we’ve already encountered some speed bumps. We’re still on our way! Just not quite so fast. Two weeks to go! Naturally, I’ll be letting you know the final tally, so stay tuned.

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Budget-Busters: The Final Tally
February 1, 2010 at 7:48 am

{ 8 comments… read them below or add one }

Beverly March 9, 2010 at 12:50 am

How do you keep your power bill so low??? I need help in that area :)

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jolyn Reply:

Funny, I didn’t think it was that low! Our thermostat’s at 66; it’s been a cold winter. We also have new windows we put in a year ago. Short showers (water heater)… I don’t know what to tell you; I think our bill is typical for this area, but not great.

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sahmCFO January 26, 2010 at 11:49 pm

I read that you stopped your TSP contributions to start your snowball. Do you recommend that? Did you start back up once you got a handle on your debt?

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jolyn Reply:

Yes, we did, and no, we have not started it back up. We simply could not have gotten rid of almost $20,000 in debt in less than a year if we hadn’t. I felt like before, we “had a handle” on our debt. But to really focus and get rid of it completely, we went for it and made it scary. (Scary for me is to stop retirement contributions.) (I’m kind of big into financial security.)
So far, we are following Dave Ramsey’s seven steps. (you can google it.) The next step w/be bulking up emergency savings. We may do a combination of that while also starting back into retirement/ROTH savings at the same time, we’ll see. I’m really big into one thing at a time, and hubs and I still need to discuss what we want to do, now that we’re finally (almost!) to the next point.
I can’t recommend anything, except to read Dave Ramsey and make your own judgment. His philosophy was a real eye-opener for me and really snapped me out of my doldrums, so to speak.

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sahmCFO January 26, 2010 at 7:53 pm

I’m just starting this budget stuff. I having a hard time with the first question you asked yourself (“budget every penny…?”)as well. Every time I get a budget down on paper, ready to implement, another recurring expense comes to mind. I’m going to keep at it though. Baby steps!

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jolyn Reply:

That is the key, to keep at it… What is the alternative? To never try? Even though things “come up”, because you sat down and did the best you could, you understand where the money needs to come from to take care of it.
I find that doing a budget and at least trying to find a place for every dollar… Really helps me evaluate every dollar I spend.
Ooh, I kind of went off there, huh? ;) Yes, keep at it! And let me know how it goes. People who have always done budgets don’t always understand how hard it can be!

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andrea January 20, 2010 at 7:24 am

I love your blog !! our situation at the moment is that we have small debts which we are plodding along with but we also have a loan that because we had adverse credit are paying an EXTORTIONATE amount of interest on, the loan was originally for £12,000 and taken out over the length of the mortgage which means that in total we will be paying back over £35,000 !!!!! we have now sat down and explained to a certain extent to the kids that we are not going to have expensive days out but will be to the beach, picnics, camping etc but we have worked it out that we can pay this off if we stick to this over the next 4 years rather than the 18 years it is due to be paid over. The problem I have is that all these blogs are great and have some fantastic information but I have to translate it all to £sterling ! and some of it as you can appreciate isnt relevant to UK markets, but there isnt the same support system in the UK as there seems to be in the US – so I will break with tradition and put my debts out there for all to see, at least Im not burying my head and am holding my hands up and doing something about it keep us posted x x x

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jolyn Reply:

Here’s to starting a wave of coming out of financial closets in the UK!! Wow, I haven’t been keeping up with exchange rates, but isn’t that equivalent to ~$70,000? You can do it! it’s key to communicate with family members affected. I also think family and kids’ activities play a huge factor — after all, we can’t get this time back with our kids, can we? But we are doing them a much better service to gain control of our finances… and truthfully, we don’t need to spend exorbitant amounts of money to spend time with our family. Way to go!

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Our Lives January 20, 2010 at 1:23 am

We do homemade detergent as well and it works for us. However, I do add vinegar to the final rinse. Not sure if that helps. Our clothes always came out clean and have a fresh smell though.

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jolyn Reply:

How much vinegar?

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Our Lives Reply:

Only 1 oz. and fill the rest of the fabric softener dispenser with water to its top line (or follow your dispenser’s guideline). Be sure to put it in the dispenser and not directly to your clothing. I like this simple formula very much and I will never go back to the store bought detergent even after we get better financially. We do not use fabric softener sheet.
Also, I put an old, extra measuring cup by my homemade detergent and vinegar for measure convenience.

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family hopes Reply:

What is your recipe for homemade laundry detergent?

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jolyn Reply:

I found one online that I will be trying soon; I’ll post about it next week if I like it. I just looked at “Our Lives” blog and her recipe looks a little different than the one I found… I guess if I don’t like mine I’ll be trying hers? ;)

jenn January 19, 2010 at 10:30 pm

I would have happily sent you my Fels Naptha soap – found it at Ace – having already decided that the dirty truth about homemade laundry detergent is that it isn’t really that good. It didn’t get the clothes very clean – and I ended up rewashing stuff. Super cheap, yes – but it didn’t work very well. Boo.

http://www.livegreenwearblack.com/2008/12/truth-about-homemade-laundry-soap.html

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jolyn Reply:

Oh, no – say it isn’t so! Boo. *sigh* I guess I’ll be finding out, because I’m determined to try it anyway. The recipe I have is for a powder. I’ll let you know how it goes…

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Money Funk January 19, 2010 at 11:23 am

Have you set up your emergency fund 1K? This will help counter some of those ‘extras’ debits without needed to slip on the budget.

Plus I noticed about 4 of those purchases could have been avoided. But it all takes time to get into the swing of things. Took us quite a few months to get serious about it all. With 3 of those months making our budget work for us.

Keep it up. Persistance, time, and tracking a great budget will all work good in no time. ;)

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jolyn Reply:

Money Funk,
We do have our $1K emergency fund, but I don’t consider any of the debits above true emergencies. It doesn’t make sense (to me) to withdraw from the fund when the next month we’d have to lower the amt put toward debt eradication in order to build the emergency fund back up.

A couple of months ago we almost had a true emergency: we thought our car needed a new transmission. Luckily it didn’t, but that repair would have required the $1K + ALL the $$ we would have put toward debt that month. Now that’s an emergency!

I am sure there are tranx that could have been avoided! Who really needs pizza, anyway? Or coffee and a muffin at Panera Bread? I’m just trying to keep it real! Thanks for your comments — it really helps to know that other people are working at this (at least) as hard as we are.

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Our Lives January 19, 2010 at 11:08 am

Good breakdown on your January unexpected expenses. I think that’s the reason I keep coming back to read your blog. It is an encouragement to know there are real people out there minding their finances seriously and doing something about it. Thank you for the post Jolyn.

I have changed the way I live tremendously since last year and I must admit all of the little changes did make a huge difference. I cook almost all of our foods from scratch (we eat organically or naturally and love it! Cut corners on other things but not food), no more eating out (even on birthdays – do you know how much sodium they put into your food in a typical restaurant?) and has stopped shopping for new clothes (this was a hard one – I love clothes) except for my kids (once a year – in September or thrift shopped when my girl has some spending money). I’ve even joined the freecycle.com and the cloth exchange program. It has not been easy, as a matter of fact, it’s been a very humbling journey. Some days I do feel deprived but I have to keep my eyes fixed at the end of the tunnel (sorta speak). Like you said, it is all baby steps. I haven’t read it yet, but the Tightwad Gazette book is on my library borrowing list. I don’t know if I want to read books like that when I have just getting out of my denial living. It is too extreme on the frugality side for me at this point. I may, however, change my mind once I start reading it. I have tons of books on how-tos (love how-to books) and tons of great blogs to read and gleam from already. But the bottom line is, at least to me, is to DO it instead of just READING about it. LOL!

On another note, my January debt payments stayed as intended (thank the Lord) despite all of the “extra expenses”. But it did put a dent to the baby emergency fund building. Well, there’s always another month and hopefully we could get the baby emergency fund squared away soon.

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jolyn Reply:

It sounds like you are doing great! I am slowly moving toward cooking more and more from scratch: still haven’t made the leap with bread, though. We have never been big on eating out, at least not as a whole family with the kids. I am convinced that is what helped us save money over the years when we weren’t even good about doing a budget.

I’ve thumbed through the Tightwad Gazette, but have never read it cover to cover. You are right: there is a wealth of information out there in blogs. I figure baby steps (including baby reading steps) is better than no steps at all, and much less overwhelming and prone to giving up altogether.

Have you read Economides’ “America’s Cheapest Family”? They are hard-core! And it’s a good page-turner, too.

I’m so glad you’re reading along. It’s why I keep this blog!

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