Thursday, January 20, 2011

Rethinking Budgeting

One of the main issues that I have, and I think most people (anyone can correct me, I won't be offended) also have this issue, with budgets is that I create my budgets this way:
  1. Income
  2. Fixed Expenses
  3. Variable Expenses
  4. Debt Repayment
  5. Savings 
Which means you decide how much you think you have to spend in the Variable Expenses categories before getting to Debt Repayment and Savings. Not to mention that "Planned Spending" isn't in that list at all. Of course, we are still supposed to plan for these "unexpected" expenses in our budgets, but realistically, how many people actually do this when creating a budget? I always think, 'what do I typically spend on X in a typical month?' and enter this line on my budget. This, of course, doesn't take into consideration that you may only spend $40/month typically on eating out, but, oh, February has Valentine's Day in it, planning on eating out that night? Not to mention large clothing items (coats, shoes, etc) that need to be replaced and birthdays.

So, my budget for 2011 was worked out this way:
  1. Income
  2. Fixed Expenses
  3. Debt Repayment
  4. Savings
  5. Planned Spending
  6. Variable Expenses
I decided ahead of time what my Debt Repayment and Savings goals where first before looking at what is left over for the "spending" categories. I've never budgeted this way before. Its always, 'let's see what's left over after the spending is done' Bad Budgeter, BAD!

Income $2232
Fixed Expenses $418
Debt Repayment $1000
Savings $500
Planned Spending $80
Variable Expenses $234

The budget I posted yesterday doesn't separate out the Variable Expenses vs Planned Spending because the Planned Spending is worked into the Variable Expenses. Like Gail's jars, whatever is left over in a Variable Expense category in any month is added to next month's Variable Expenses. But, since I'm not doing the jar method (I'm lazy, I'll admit it!) I'm using my 2nd chequing account (its technically a savings account but there's no charge for transferring in and out from my 1st chequing account online) for my Planned Spending account so that when I need the money to add to my Variable Expenses in any category, I can. I am REALLY hoping I can make this work. Like I said, I've never budgeted this way before. Also, I'm leaving myself with very little play money $234 a month works out to $58.50 per week, but I've been living on about $40 for the last month and a bit, so I think I can do it. More frugal fun to be had this winter!

TTYL, Morgaine

Wednesday, January 19, 2011

2011 Budget

Here's what my 2011 budget sits at right now. This is subject to change - maybe sooner rather than later, since I'm only temping right now and applying for permanent jobs, but none yet :(

Since I am currently being paid weekly, I will be tracking weekly and hopefully this will make it easier to budget. So far, I think so. But time will tell ...

Saturday, January 1, 2011

Happy New Year!

After a way too long hiatus, I am back! I REALLY slacked off on my money management for the last quarter of 2010 mainly because I lost my job, used up all my savings, and I'm now working a temp job that could end at any time :( But at least I'm working and bringing in some money :)

So, with the New Year comes new resolutions to be more careful and conscientious with my money.

My Money Goals for 2011:
  • Have at least $2000 in my Emergency Fund
  • Have at least $5000 in the Wedding Fund *joint savings with fiancee
  • Have at least $7000 in RRSPs
  • Pay off Visa (for good, dammit!)
  • Have MasterCard down to at least $8000
  • Pay down Citi (no goal, because the interest is so high, but make regular monthly payments)
  • Not go over my budget more than $100 in any month
2010 was a pretty good financial year for me despite losing my job in October and slacking off in the management department for the rest of that year. I will do an analysis in a later post. But looking at my numbers right now compared to Jan 1/10, I am up $6000 in Net Worth. That's pretty good, if I do say so myself :)

So, Happy New Year's to all and may 2011 be a year of happiness, fulfilment, and sound money management! :D TTYL, Morgaine.