2011 - A Budget Reevaluated

This blog post was originally posted on the Petit Fours and Hot Tamales blog on Tuesday, March 1st, 2011.

A Budget Reevaluated

Husband: “How are we broke? There is still money in the checkbook.”

The Kid: “Can I get a raise in my allowance?”

This year started out with a complete reevaluation of our family budget and expenditures.  For a family who has been living paycheck to paycheck the past few years as we completed our education and started new careers (not our choice {darn economy} but something that worked out better in the end…), our budget was already pretty bare bones.  Now that we are finally on the upside of this major life change for both my husband and myself, we needed to add in a few things that we’ve put on the back burner and cut some things out completely to make this reevaluation work.

In January I created an Excel spreadsheet that lists literally everything we spend money on; from monthly bills, to gas fill-ups, to dog/cat food, to haircuts and groceries.  We even have one that lists The Kid’s lunches, afterschool activities, snacks and allowance.  When I showed this to the guys, The Kid piped up and said, “Why is my column so small?  I think I need a raise.” (ya right!)

This was the bare bones part.  

One of the things I’ve learned over the past twenty something years is that even if you have a job you love, you need to work to live and NOT live to work.  Easy to say, but hard as heck to do.  With this in mind, we added some new columns to the budget.  Things like a monthly clothing allowance, summer camp projections, vacation and holiday savings, Starbucks runs (man, I have missed those!), rainy day savings, and a few other small projects we’ve put off.  

These columns have a specific amount that is deducted each month from the overall account totals. To answer my husband’s questions, yes, we do have money in the account; but each dollar is designated to a specific column.  One column may have a zero balance, while another is quite large.  Regardless of the balances, that doesn’t mean we can rob from Peter to pay Paul.  Okay, so it looks like we are spending more money with this system. Not really.  Instead, we are cutting out a lot of frivolous spending we had been doing when we didn't have a plan in place.

Does this kind of system work for everyone?  The answer is no. This never would have worked for us the past five years and in fact, we haven’t been able to stay out of those other columns yet.  BUT we are on our way.  It will take a few more months and many more tweaks to make this work.  It will also be more than a year before we can determine if our pay off schedule is on track.  Still, this is a track-able plan and (if I do say so myself) a good one for us.

With our reevaluation of space and downsizing already in progress, stop back Tuesday, March 29th to see how we’ve implemented this mindset into our hobbies and collections.  Here is a sneak peek into the family mindset on this – It isn’t pretty…



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