Friday, December 2, 2011

Budgeting for the New Year-A Work in Progress

 I don't know about you, but I hate the "B" word.  Yes, I know it has to be done. Yes, I know budget planning is the smart, adult thing to do. Yes, I understand that life will be more enjoyable if I figure out my means and find a way to live on less.  In this case though, I try and avoid both the process and a little bit of reality as long as possible.  We all have our weaknesses.

So, this week I've been making lists. I've listed all of my regular bills, made lists of those irregular expenses, as well as those occasional expenses such as  travel that are important to me.  The end result is that I need to make some budget adjustments.  I knew this would happen, the question remains as to where and how.  A second result is that I will probably need a little additional income in order to do some of the "good stuff'. I knew this would be true as well.

Because I'm a glutton for punishment, first I plugged in the basic, regular monthly bills.  Those include mortgage (insurance and taxes), my utilities, groceries, gas, prescriptions and the like.  My monthly income will cover those costs.

Then I figured out those irregular expenses such as medical copays, car maintenance, and home improvement expenses. I guesstimated those for a year (since they are not what they were in the past) and divided by twelve. I did include travel into this pot. My monthly income will cover some of those expenses but not all. They need to be cut, or some additional income needs to come in.

This is obviously a work in process.  So far, I know some things.  I know I need to look at where I can make reasonable cuts in expenses.  I know that I need to add a category that is savings, and treat it like a bill-I'm not doing living month to month as well as I would like.  Also, I need to increase the money coming in each month. That doesn't mean getting a "real job". It does mean spending a bit more on my sewing business and less time in school.

Now, it's time for me to sit down and set some priorities for spending, saving and yes, a little earning.  Someone online once suggested that you should spend on the things you do every day.  With the exception of travel, that's the guide I'm using on setting my priorities.  Life is always interesting.

Coming soon, a final update on my $500 Christmas and a look at where I can adjust the budget to make life richer in retirement.

11 comments:

  1. Down to the brass tacks starting yesterday- Dec 1.
    Back to listing of everything we buy. $35 for a car fill up, $248. electric bill. We just need to be totally real. We thought about putting it off for Christmas. We are traveling twice this month. Reality IS that we do travel every year at least twice in Nov/ Dec. Presents are all purchased and made- but the mailing is a bundle!

    It may hurt a bit to see where the money goes. It does go. Maybe if we look a bit closer on how it goes, we can save a bit more for things we love to do.

    You may sew a bit more. I will substitute a bit more. By knowing where it is going we will have a path along the way.

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  2. Budgets aren't fun, but I am a nerd and I like to see if I can improve every month.

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  3. I think budgeting is like meal planning. It is a pain to prepare it, but it is so worth it when it is done. You eat better, and know exactly what to cook and can make a detailed list for grocery shopping of what you really need. I like the reassurance that if I stay in my budget each month, everything will work out great financially. It is a small price to pay for peace.

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  4. Planning the 2012 budget is hard. There are a lot of unknowns for us. It sounds like you have a good plan. We, too, need extra income if we want to do any home improvements or take a vacation. I'm considering adding more hours to my job, or getting another part time job. OR, actually advertising on my blog...who knows, but it has to be something.

    Medical expenses are always the tricky things. Our insurance is going up, and probably what we pay for social security.

    Looking forward to your update on your $500 Christmas!! :)!

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  5. My wife's new health insurance premium notice came in the mail yesterday..up 10% again. For the last 4 years it has increased from 10-17% every year. That means another shaving of our entertainment and clothing budget to make the numbers work.

    I have decided to wait until at least 65 to start taking Social Security, so we must make due with what we have for now.

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  6. Janette. I started using cash and spending income from my daughter (paying me back for insurance and such) and the quilting. Problem is, that money I havent been keeping track of. Bills are all paid through bill pay and tracked. Need to get better on the keep track. Yes, the money goes.

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  7. Sharon, let me know what you find out about advertising. I have been considering exploring things like Odesk and such more for me and especially my unemployed college student (who has a part time book business now). Ill update the holdiday fairly soon.

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  8. Bob, Im grateful that I dont have that elephant in the room. My health insurance stays within a few dollars year after year. Someday, if my son finds a job with bennies, it will actually lower. Meanwhile......

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  9. Spendwise, we give a few giftcards, but I prefer actual presents. We all see each other at the holidays. I will be buying a few gift cards but I prefer to make and buy gifts that people will use.

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  10. I'm already working on a retirement income budget and I'm still more than 2 years away from retirement lol! I'm always ready beforehand - a friend once told me I'll be sitting in my coffin six months before I die!! SO NOT true. I plan to be cremated!!

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  11. I've been tracking our money in Quicken for 15 years. When it was time to think about retiring we looked at what we were spending on.

    We are traveling a bunch in our first years of retirement. We set aside a certain amount each month in a travel account. If a trip comes along and we don't have enough, we don't go. It's a great motivator for us to think about what we really want to do.

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