So November isn’t quite over yet, and already, I’ve blown through my monthly budget. My method of budgeting is pretty loose. I earn X dollars. Every month, I put Y dollars into long term savings (and make retirement account contributions). Everything left (let’s call it Z dollars) goes into a short term savings account to be spent throughout the month, though the plan is always to have money left over so I’m increasing my savings even more.
November? I spent Z dollars. And then I spent more than Z dollars. Not by a lot, only about $50 or so, and technically, part of that was shipping some bar exam review materials to a friend who who bought the books off of me, and when she pays me, the check will be more than $50. But still. The spending was a little out of control this month. Of course, because I always try to have money left over at the end of the month, the extra money just comes from the money I didn’t spend last month, so I didn’t go into debt or have to delve into any of my long term savings accounts.
Regardless, it was definitely a wake-up call. Normally, I manage to stay well within my budget. While I put money into short term savings so I can spend over my monthly budget on occasion, that is designed for special expenses, like plane tickets, for example.
So what am I doing to fix this problem? First off, I printed out a categorized list of all my expenses for the month. A quick glance told me that a chunk of my spending came from gift purchases, both Christmas and birthday gifts. Ok, so that was unusual spending. But what else was there? I spent more than normal on groceries, and while a bit of that was purposeful stocking up, some of it was frivolous treats. So that’s something to watch for December. I also spent a chunk of money on dining out. While I do budget for meals out with friends, I also noticed a number of meals that I picked up on the run. That’s not something my budget or my waistline needs. Of course, it wasn’t a large amount of money, but all those little things do add up. And last, but not least, I did some Black Friday shopping. Again, not much (I spent under $100), but it all adds up.
So the goal for December is to spend less than I normally spend, to truly watch what I’m buying and try to make smart choices. After all, my new savings plan starts in January. I need to get ready!
Megan is a 30-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.