Tuesday, August 22, 2006

Sticking to a Budget

There was an interesting post over at Blueprint for Financial Prosperity, about ways to make yourself stick to your budget. Some of these are things I should try, some are things I sort of already do. But when I say I follow a budget, it's kind of a lie.
I do track my spending very carefully. I have budget lines for a wide variety of items, and not that much falls into the "Miscellaneous" catch-all. For 2005, my year-end difference between budgeted and actual expenses was only $13! Does being $13 under budget for a year mean that I am a super-thrifty disciplined saver? Sort of... but what I think it really means is that I am a creature of habit! As I wrote about in my Rule #10, the thing that really keeps me in okay financial shape is that I have gotten to a point in my life where my income is more than enough to pay for my habits, and my habits don't include wildly expensive activities.
What I would like to be better at is actually setting goals to save more, and really trying to reach them. A couple of days ago, for instance, I noticed that I had only about $100 left in my monthly food budget. My budget for the month is $650, which works out to around $21 a day. With 10 days left in the month, I'd have to spend only $10 a day to make my budgeted goal. So did I plan out a menu and go to the grocery store for 10 days worth of inexpensive breakfasts, lunches and dinners? No. I had worked late, and gone to the gym late, and was tired and didn't want to deal with anything, so I went to a Japanese restaurant and blew $44 on sushi.
Does that mean I will now try to make up for it by living off only $6 per day worth of food for the rest of the month? Nope. But it does mean I will try to do better next month. I'll be living in yet another different temporary space, in which I hope I'll be more comfortable cooking. We'll see.
What do you do when you see a shortfall in your budget? Do you buckle down and close the gap? Or do you just let it go and try to make up for it the next month?


Gregg M said...

Sounds like you need a little Dutch boy to finger your budget dike!

Jane Dough said...

Hi MadameX,

If I spend too much one month I make up for it the next month. I am not as good as you at budget categories, instead I figure out how much I can spend total each month and how much I should save. If I can't meet my saving goal for the month that means I overspent somewhere. So if I am saving $200 less this month that means I have to save $200 more next month to make up for it - the following month belt tightening could mean I eat in more, drive less, turn off the AC or turn down the heat, invite a friend over to watch a rental DVD instead of going to a movie, check my impulse to buy something, or a combination of all of the above.

The important thing is to not let the overspending snowball. At least for me I have to check it by the next month, otherwise I find myself slowly falling into the trap of spending more and saving less.

mOOm said...

I don't budget. I just don't have much desire to spend much and when there are things I would like to spend on it is like I have a little clock or something in me that says "too expensive".

Jon K said...

Madame X-
$650 sounds like an awfully lot for a single person, even in NY. Have you considered mystery shopping? I try to mitigate my food expense by signing up for shops when it's convenient. I perform shops at my regular grocery store and a few restaurants (both casual and fast food), and figure I save $200 or so by doing so.

Single Ma said...

I usually try to buckle down as soon as I notice the shortfall. I'll end the month by cooking everyday (ugh!) to avoid eating out for lunch/dinner. Or I'll just avoid doing anything between home and work because stopping usually means spending money.

I'm not disciplined enough to make up for it in the next month. I would end up saving less and less everytime.

Anonymous said...

I try to buckle down and pay attention. It's too easy to let "next month" become "the month after that", etc... next thing you know you are in a constant deficit situation. :)