Confessions of a Budget Blower

This pay period I did pretty well in most of my budget categories. Utilities were $50 cheaper than usual, so I put that into my long-term savings. Actual grocery expenditure was only $60 of the $100 I originally allotted. Dry cleaning was $14 of the $25 I set aside. Spending on gas was about half of what I allotted. And I gave up all alcohol for lent (lots of reasons behind that one, tougher than sticking to a budget!!!), so naturally my dining out spending will likely be half of what it usually would.

But here's where the trouble begins..

Mom's birthday was Wednesday. Tuesday night I decided to take the 45 minute drive ( 20, since I was already halfway there for work) to see her - but she was not home, so I bought her flowers & chocolate (real gift was at my apartment still), and left the card I had planned to mail with the gifts. Extra gas used - no mother to see.

Wednesday night I came out of the office to a flat tire. Tipped the AAA guy $5 that I wasnt expecting to spend.

Thursday I got off work early, so I drove back home (again) and took Mom to dinner. Extra $30 from my dining out budget I did not anticipate, but the food and the company were amazing, so I count it as worth it!

Friday had a chiro appointment - usually I only have one a month, this is the 2nd in two weeks. Good bye $50.

And Saturday boredom and a failed attempt to get my flat tire fixed (wait so long I probably wouldnt have made it by the time they closed) let to shopping trip at the nearby mall. EVERYTHING was on sale. In particular, a shirt I have had my eye on since January was on clearance + extra 30% off. I broke my own rules and did not put the shirt on hold, and picked a second up in the process.

So while I have enough cash to pay the *wince* credit cards that I put the chiro, shirts, and birthday dinner on (rule #3 broken), I will either a) cut back next month's free spending & pay with the next check b) not give to charity.

I dont think I should compromise on b), so please understand if I turn down a few extra lunch dates.

Total $$ blown: $12 gas, $15 flowers, card, chocolate, $5 tip to AAA, $30 dinner out, $50 chiropractor, $43 shopping spree = $155.

Not the worst I've ever done, but as I budget down to the last penny, that is $155 that I don't get to spend next month :(.

Budget - the Work/Life Bridge

http://moneyland.time.com/2012/02/03/personnel-finance-productivity-down-employers-target-debt-stress/

This article presents an intersting viewpoint: employers have incentive to teach employees about personal finance.

What I found even more interesting, however, was this tidbit "There are ideological blocks too: many think school is for Shakespeare and Nietzsche and that teaching kids about money is best left to parents."

When I compare the classes I had in highschool to what my mother had in highschool, I noticed something interesting: classes teaching skills useful to an individual operating their basic every day life, such as cooking, nutrition, and personal finance, have nearly vanished from public schools.

What are a vast majority of American's problems stemming from these days? OBESITY AND DEBT!!

No wonder the private sector has begun to hone in on this lack of information - organizations like http://www.fitbit.com/ and http://www.myfitnesspal.com/ are easy, nifty tools to help people set exercise and nutrition goals, and keep track of their progress.

Similarly, programs such as http://www.mint.com/ and celebrity-like figures such as Dave Ramsey and Clark Howard have popped up trying to help people learn how to manage their money and reach their financial (as well as other) life goals.

Accordingly, employers can benefit tremendously and quite selfishly from helping employees conquer their own health or finance issues. Who would you want on your staff? The unhealthy, broke employee who continually calls out sick or is late due to car troubles that she cannot afford be fixed (unreliable), or the healthy, financially stable individual (reliable)?

Could your organization benefit from implementing Financial Success program?

Why Budget

I started this blog, but forgot to say why! Here are some lessons I have learned over many years of trying many different budgets:

1) Online budgeting tools are nice, but only if you use them
2) Know how kids are more likely to eat vegetables they helped prepare? Same thing goes for adults using a budget they made themselves
3) Budgets trim wastefulness, and therefore, are good friends to keep close
4) Budgets do NOT have to be fancy
5) Budgets are like maps: they show you where to go, how to get there, and very useful when you get lost.

The first time I tried to track my spending, I found I had created a nightmare. With rows doing one thing and columns doing another, the budget had too many details and too many numbers, and was a budget too icky all around.

The budget I use now is in Excel. It includes formulas that add and subtract, and shows what % of my take home income each category represents.

Cupid's Undie Run - Saturday, February 12th

Best part of having a budget is being able to find money to give to those less fortunate.

If your budget allows any extra, please support the Children's Tumor Foundation through my team's page at:
http://hope.cupidsundierun.com/cur/participantpage.asp?fundid=3702&uid=9011&role=1

The foundation strives to end Neurofibromatosis through research. This condition usually begins in adolecense and causes tumors to grow on nerves throughout the body, causing blindness, deafness, and severe chronic pain. Currently, there are very few treatments.

One of our friend's youngest brother, Drew, has been fighting with this condition since he was only 10 years old! Please help us raise money for this worthy cause!

Impulse - slowing the "pulse" down

Think for a minute about your pulse: the more mature and healthier you are, the slower it needs to beat to keep you alive, well, and happy.

Infants are at 70-190 vs. Adults at 60-100. Athletes are between 40-60. (source)

Think about your pulse this way:

Infants: young, excitable, immature, developing bodies.

Adults: mature, fully developed (some healthier than others)

Athletes: mature, very well developed, healthiest of all.

Impulse implies that you are in that Infant: 70-190 range, rather than the Athlete:40-60 range.

Think about you impulse buys: you see something pretty, you get excited, you want it and you want it now, and your "pulse" elevates. Seems the only way to slow it down is to buy, buy, buy!

Much like a baby crying until it gets candy.

Here are some quick tips to avoid the trap of impulse:

1.       Make a budget: know what you can afford to blow before you dare step foot into that store.

2.      Back to front: shop the store back-to-front; those $200 heels that just made it to the floor will not look so good after you see the $70 heels waiting for you in the back

3.      Look for red: online or in the store, look (and wait) for the sales.

My top 3 favorite stores tend to sell my top 3 favorite new items at 40% off, just weeks after they are introduced. If I wait a few weeks, I can get 40% more clothing for my money.

                                Waiting isn't always such a bad thing, huh?

4.      Hurry up and Wait! try on what you like, pick your top 3, pick the 1-2 that fit into your budget. Now, I want you to walk to the counter, smile at the sales person, set the clothes down, and ask "Can you put these on hold please?"

5.       Exit the store, carry on the rest of your day, and get a good night's sleep.

If those on hold items haunt your dreams, go back and go ahead and buy them.

Putting clothes on hold accomplishes the following: a) you get the fun of shopping b) you find something you like c) you slow down your pulse long enough to make a good decision

Note: this technique can be applied to all shopping and should especially be applied to bigger purchases.

The more you practice these techniques, the slower your pulse will get, and the more fit and mature your spending habits will be.

               

Some Borrowed Tricks

I love coming up with ways to trick yourself into doing the right thing, or a faster way of doing it, like:

Setting up auto pay on your bills so they are paid before you have a chance to blow your paycheck
Putting clothes you wanted to buy on hold at the store until your excitement over them goes away

So, I loved this nifty article: http://www.43folders.com/2007/08/13/hanger-trick - most women, and a lot of guys I know for that matter, would probably be shocked at the results.

And this website is pretty killer as well: http://www.groceryguide.com/GA/Atlanta/Publix - use it to check the sales at any local food store in your area - and you can check 2 at once for easy comparison shopping!

I will be trying out both of these over the next 3 months, and update you on how I score.

Needs vs. Wants: the starting line

When I read and the speaker asks me to create a list, I find that I usually do not do it, for whatever reason.

So I made one for you. Feel free to disagree with the comment box below.

Ordered from most important to least important, which happens to equal most fixed to most flexible.

Needs*:

1.             Taxes   -   they come out of your check first anyways, so they are at the top

2.            Rent   -   no one wants to get evicted

3.            Utilities  -   no one wants to get dressed in the dark             

4.            Loan payments -   you promised you'd make this a priority to pay back

Mixed:

5.            Food  -   Dining Out vs. Eating In, or Steak vs. Canned Tuna can be flexed

6.            Health   -   getting prescribed meds is a need - getting Name Brand meds is not.

7.            Transportation   -   getting to work is a need - getting to the mall is not.

Wants:

8. Personal Travel - yes you WANT to explore the world, but save up to go do it.

9. Clothing - unless you are currently naked, this is a want

10. Recreation - of course you WANT to go to the movies, but make sure it fits first

*series on how to control these coming soon

Budgets set up in order of most important (needs*) to least important (wants) will help you

a) keep you spending in perspective
b) remind you your obligations need to be paid first
c) show you that you still have something leftover for fun
d) or if nothing is leftover for fun, it reminds you that some "needs*" probably have "wants" attached to them, and the "wants" need to be clipped fast

Understand a need* versus a want? Good - now you know the basic way to start your budget.

Whose Money is in Your Wallet?

As a follow-up to my post on Attitude, I figured I would outline some money-attitudes and their biggest downfalls.

Child - everything comes from Mommy & Daddy

                                Attitude: I want it, gotta have it, what's your's is mine

                                Downfall: Mommy & Daddy say "No."

Student - Spender: I go to school, I live on my own, but Mom & Dad still pay

                                Attitude: but everyone else lives on the upper east side.. Daddy please??

                                Downfall: Mommy and Daddy say "No - get a job if you want it."

Student-Hybrid: I go to school, I pay for my own drinks, but Uncle Sam gets the rest

                                Attitude: I <3 my student loans, how could I go to Spain without them?

                                Downfall: 4 years of fun = 10 years and $50,000k + Interest  to pay back later 

Student - Adult - Saver: I go to school, I saved for college, and I paid for it all on my own

                                Attitude: Only my money is mine/Ahhhhh freedom is sweet.

                                Downfall: You lived close enough to take the bus, which contains lots of loud Freshmen.

Adult - Spender - Child: I have a job, it pays for my drinks, but I live at Mom & Dad's

                                Attitude: the old bird does my laundry and makes me breakfast, why would I ever leave?

                                Downfall: Mom & Dad sell the house and buy an RV to travel - for two.

Worker-Hybrid: I have a job and pay for my apartment, but Mom & Dad pay some of the bills

                                Attitude: I am so close to being on my own, but it's so cheap to keep me on their plan!

                                Downfall: Mom & Dad switch plans, you're dropped, and your rent suddenly feels steep

Worker- Saver - Adult: I have a job, one name for every bill, and my checking account pays it all

                                Attitude: Only my money is mine/Ahhh - freedom is sweet.

                                Downfall: You seem less popular, because creditors never call...

Worker- Spender -Parent: I have a job, I pay the bills, and my kids get all the rest.

                                Attitude: I can't wait until they are old enough to get jobs and move out.

                                Downfall: You have trained up adult-spender-children: they will never move out.

Worker-Saver-Parent: I have a job, I saved for their college, and I love my vacations.

                                Attitude: I can wait to have it, and they can too.

                                Downfall: Your married friends are jealous, and you won' get as much time with your precious babies since they will never live on your couch.