October 22, 2008

The Dreaded Budget


Owwwww. I just did my first real household budget. Owwwww.

You know, I used to be Miss Efficient. I would plan out every penny coming my way and I would never go over. Granted, that was when I was in university and working retail to make ends meet. I couldn't afford to mess it up. I'm still pretty good at making savings plans and doing basic financial planning, but apparently I have developed a weak spot since I started making office-style money:


I guess I should say that my BH and I share this weak spot together. It's very much a combined (lack of) effort. We both have areas where we completely drain the bank, all the time convinced we are being prudent. Do you know how much we went over our budget for the month of October? DOUBLE. We spent twice what we should.

I honestly thought I had entered something incorrectly when I filled out my little excel chart. I blinked a few times and thought... "We couldn't possibly have spent double, right? I'm seeing things, right?" Ha ha. I wish.

We've both got to get this under control if we ever hope to swim out from under our school and music debt. The next step is making a new budget and sticking with it. I've read that the money envelope system is a good way to stay on track. For example, we would take out our grocery budget in cash at the beginning of the month, put it in an envelope, and only use that money when we need groceries.

If we run out, we've overspent. Sucks for us.

I guess it wouldn't hurt to think of some cheap and easy snack/lunch/dinner ideas. That's one of the areas where we're hurtin'.

Does anyone else have good budgeting tricks? Or maybe has some problems following their own budget? Because, I've gotta say, looking at my expenses over the past month makes me feel like a gigantic ASSHOLE.

The good news: charting all our household expenses gives me something new and organize-y to obsess over. You know how much I like that.


Milan said...

I too am a big fan of charting our some figures in Excel. I have also found my finances strained this month. Partly, I think I overestimated the 'three paycheque' effect that government workers get twice a year. It encouraged me to make a few more voluntary purchases than normal, as well as pay off twice as much student loan as usual.

Now, I am trying to force myself to bring things back into alignment: avoiding voluntary spending, reducing recurring costs like lunches, etc.

Good luck with your budgeting.

Jessica said...

Save your change! I know it’s dreadfully obvious, but Jordan and I started dropping spare quarters, dimes, loonies, toonies, gum wrappers (haha) — basically whatever was in our pocket at the end of the day, and we ended up saving up a large contribution to our trip out East. Guilt-free money!

It really worked for us, so we’re going to start doing it again right away.

Stella said...

Milan: Glad to hear I'm not totally alone. Funny, but when you know you've got more money coming, that's often when you push the envelope. It blows!

Jessica: That's a good suggestion... Right now we drop our change on the bookcase and forget about it until we need to buy something small. Maybe I'll convert that spot into a home for the change jar.

Milan said...

For 2004 and 2005, I recorded every purchase (no matter how small) in a massive Excel spreadsheet. It took a lot of time and effort, but it certainly produced some interesting data.

Thankfully, I gave it up pretty quickly when I moved to England. Dealing with six accounts and two credit cards in two different currencies was just too much.

Stella said...

I would think so!

I'm going to chart each expense for a while, I think. I honestly had no idea how bad we were doing until I started it, so it will be worth the headache in the long run.

Shawna said...

When I was struggling on a budget, I had to make some bare-bones cuts, which worked but made life way less fun...so I'll list them, but if someone knows how to be frugal AND fun, listen to them.

The worst offenders for me were food and transportation, so:

- Food had to be limited to what was nutritionally valuable only and at a minimum. ie. no baking a big cake, just eating apples and bananas and pears, etc.

- Food had to be the lowest possible price, but still be nutritionally valuable. ie. sadly, no organics, the cheapest brand of whole wheat bread, whatever's on sale, etc.

- Little to no alcohol. Sad!! But when I used to buy a bottle of wine a week - that's 15 bucks a week! Can't do.

- All cooking/lunch packing must be done at home. No dinners out :(

- Public transit taken only if absolutely necessary. Otherwise, it's walking or biking, even if the weather sucks. Cabs are unheard of!

Finally, I never bought clothes, coats, etc. anywhere except second hand, and sparingly at that :S

See? No fun. There is surely a better way...although I didn't figure it out.


Amanda said...

i've been there too and still happens from time to time. the first step for Charles and I was to track our expenses and revenue before embarking on a budget. we did this in order to answer the question "where does our money go?" cash expenditures tend to happen without really noticing: a muffin here, a magazine there, etc. so the difficult part of tracking is to write down each expense and then record it.
after a month of this, we analyzed the expenses and made categories such as essential, non essential, unexpected. we forecasted a year's worth of revenue taking into account the change that happens in the middle of the year when deductions such as CPP end on the revenue side, and extra expenses that occur at other times, such as income tax time or dental bills based on the previous year. for us our main source of "where does the money go" expenses was dining out, especially buying alcohol at a restaurant. we did that all the time, so that was where we knew we had to cut. we still go out on occasion, but now we go out much less and we try to not spend money on booze at restaurants. it is much cheaper to buy a bottle of wine at $15 from the LCBO than $30 at a restaurant. it's also important to evaluate whether you have anything left over after you subtrace expenses from revenue. consider ways of increasing revenue. maybe it's time to ask for a promotion / raise? sounds a bit nervy and unlikely for many people, but there are times when it may be possible. evaluate as well your living quarters. is that expense more than you can afford to pay? is it necessary to look for cheaper housing? do you have any unused memberships for museums or for book clubs or other monthly charges where you aren't really using the service? the main thing is to start by tracking before you cut to get a true picture of your financial situation. the other thing is not to be disheartened or make unrealistic plans to live a Dickensian lifestyle. that won't work for most people for very long because they will feel deprived. also think of the things that cost little to no money and perhaps work with other friends to have potlucks instead of eating out, food co-ops etc. sorry for the long ramble!

Stella said...

Shawna: Good suggestions. Food and alcohol are my biggest weaknesses, so I'll be working on that. I think I'll be cutting down on my Vrtucar zealousness too....

Amanda: That's great! So far we're doing exactly the same thing: identifying where our money goes, and cutting down. I think the key for us will be the excessive grocery shopping. It's so easy to just grab things without thinking about whether or not it's *really* necessary.

Marie-Adèle said...

I used to first of all figure out my fixed expenses for the month: rent, bills, savings (I'd always put a fixed amount in savings as soon as I got my paycheque). Whatever was left over would cover everything else: food, outings, shopping, etc.

Since I've been in Japan that's kind of gone out the window, though I try. Moving this summer wiped out pretty much all the savings I'd made in the past year (you think moving is expensive? TRY MOVING IN JAPAN! >_<) and I also travelled a lot this year. On top of that, there's my cat. I'll bet your dog is more expensive than she is, though!

I'm getting my pay next week, and I've promised myself I'd be better at watching what I spend. The trouble is here, it's just so easy to buy good, healthy, prepared food, and I don't really like cooking, so...

Anyway, I second the above suggestions of writing down everything you spend (I've got to start doing that again!), and setting up a change jar. Also, cutting back on alcohol works. Or if you can't, a really cheap red wine can be made into very palatable sangria. :D

Jen G said...

I like to read Get Rich Slowly - http://www.getrichslowly.org/blog/ - lots of good suggestions, reminders, hints and discussion about the green stuff... and how to not let it all slip away through your fingers.