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?


Anonymous said...

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

Anonymous 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".

Anonymous 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. :)