I’m a cheater.

I’m not ashamed to admit that I have been cheating the entire month of January.  This is a difficult realization for me because I am usually not the type to fall for temptation(s), but I’ve determined that I cannot be perfect all of the time.  The bad news is that I “fell off the wagon” – so to speak – in JANUARY of all months, so I am feeling like my year has maybe gotten off to a bad start…

The good news is that the cheating was on my BUDGET and not on my husband (or my diet) and this has happened before and both I (and my budget) have fully recovered.

THE INFIDELITIES

So what happened?  First, my husband’s uncle decided to sell his 2004 Ford F250 truck that has FOUR doors.  FOUR DOORS PEOPLE.  We had been looking for a truck that would fit our growing, two car seat family for some time, but this one was a gem (over 10 years old but with only 55,000 miles) so it was a no-brainer to make the purchase.  This was a dent to our cash accounts of about $20,000.00, so obviously an “unexpected” event this month.  Second, we had a baby in December.  This is something that I did plan for, but you cannot ever plan enough for a new human being to enter your life.  We ate out more before baby arrived (hey, we were going to be stuck inside forever from now on, right?), ordered more pizzas than normal after getting home from the hospital and I just didn’t pay as close attention to our spending…  Oopsie!

WHY STICKING TO A BUDGET IS HARD

“Budgets are made with logic.  Purchase decisions are made with emotion.” – Martin Hurlburt, co-founder of T.M. Wealth Management

I’ve never read anything more true in my life!  When I set up my budget at the beginning of each month (or prior to) I create it with an “everything-is-black-and-white-there-is-no-grey-area” point of view.  The numbers add up perfectly where every dollar has a place, so everything should go splendidly.  Unfortunately, life happens!  We heard about that truck and of course we were thinking “ahhhh, less anxiety sitting in the back seat” and “the girls will love the extra space” and “this will be perfect for our family vacations” — all emotional “grey area” viewpoints.  This is ONE reason that budgeting is hard.

Another reason budgeting is difficult is people set them up with unrealistic expectations.  This might mean they add extra money in the income line because they are HOPEFUL that they get some overtime this month.  Or, they don’t have miscellaneous or “sinking” funds set aside to cover unexpected expenses like the garbage disposal getting clogged up or the dog getting his toe chopped off by the lawn mower.

If that doesn’t make it difficult enough, it is easy to lose sight of our goals — especially those larger ones — because sometimes it just takes awhile to get there.  Saving money ain’t easy.

HOW I (AND YOU) CAN CREATE A SPENDING PLAN (A.K.A. BUDGET) THAT WORKS

Yes, we all those months where we cheat and we feel like our budget could never forgive us. HOWEVER, this is not an excuse to quit budgeting forever, just like falling off of the diet wagon is not an excuse to be fat forever. Our budget is fluid.  It should change from month-to-month based on increasing or decreasing income and/or expenses.  We might have zero birthday gifts to purchase in January and 14 birthday gifts to buy in March.

Start by sitting down with a blank piece of paper and a pen (if you have a spouse they should be there too… a separate post on getting your spouse on board is coming…).  Write down every source of income you KNOW is coming in for the next month.  Then, pull out your bills and write down every expense you KNOW is going out for the next month.  For items that are difficult to determine an amount for, go back and track what you have historically spent for that month *or* review your bank statements for spending in that area and use an average of the last 2-3 months spending.  It is not going to be 100% foolproof.  Include at least one or two lines in your budget for miscellaneous expenses or you can actually name sinking funds for things like “car maintenance” or “roof fund for the next hail storm”.  These line items will help catch those crazy things that come up that would usually break the budget.  As a final sidenote (and probably a topic I will cover more in-depth later) you need to pay YOURSELF something in savings.  If you don’t have at least $1,000.00 in a savings account as an emergency fund, be sure to put space in your budget to put aside $50,  $20 or even $10 from each paycheck to build up that EF!

STARTING FRESH IN FEBRUARY

We’ll  pretend January was our “cheat” month and treat our budget as our extra special Valentine to make up for it in February.  I’ll attempt to post my own budget here once it is complete so that I can share how I break things down.  Let me know your plans to start fresh or share your own spending plan tricks/tips by posting a comment!

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wealth & wild

two promises for my girls

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“Wealth is the ability to fully experience life.” – Thoreau

“Between every two pines is a doorway to a new world.” – Muir