Mrs. Micah recently posted about her budget busters and so I’m tagging myself for this meme. What are my five budget busters?
This comes at a time where my budget has already been busted and exploded for the month. So it is well timed.
1. Not planning ahead
I think this is the biggest problem with my budget. YNAB has helped me plan ahead in a lot of areas, but in other areas, I completely neglect to think about what I might need to spend before I make that month’s budget. For example, I have been setting aside money for my car insurance payment for the past two months. I have planned ahead so that the bill won’t make a huge dent in my monthly budget. But on the other hand, this month, I only budgeted $50 for dining out. At the beginning of the month, I knew that I had two dinners planned with friends. I live in D.C. The odds of me being able to go out to two nice-ish dinners and spending under $25 each time, including tip, is very small. Very very small. I should have budgeted more in that area.
2. Unrealistic goals
Sometimes, I look at the month, and I think “Oh, I can get by without spending more than $10 this month on household items.” Never mind that I typically spend closer to $15-$20 each month in this category (it’s a broad category for me). And inevitably, I end up spending more than I planned to.
3. Buying in Bulk
I don’t just mean buying from a store like Sam’s Club or Costco (Costco has better customer services and better tire installation). I mean that I have a habit of stocking up on things. Is this a bad thing? Not necessarily. Especially if I’m buying something on sale. One of my personal vices, for example, is that I have a can of Coke Zero every afternoon. It’s a sweet, calorie free treat that calms my cravings for a snack and keeps me going. It’s a vice I’m not willing to give up. So I go through a 12 pack of Coke Zero in a little less than 2 weeks. Today, I counted that I still had 7 cans left, so I didn’t need any, but I decided to check the price anyway when I went to the store. 12 packs were on sale for $2.29 under their normal price. Not a bad deal! So I picked up two. Nevermind that I didn’t need them. Yes, it was a good price, and I saved nearly as much as I would spend on a single 12 pack, but in terms of the budget, that was money that shouldn’t have been spent. I do this when things aren’t on sale as well. I notice that I’m out of frozen broccoli, so when I go to the store, I pick up two bags rather than one. I go through it in spurts, so I might use both bags this month, I might not. Could I have just bought one bag? Yes. (And note that I pass the grocery store on my walk home from the metro, so the idea of an “extra trip” just means a few minutes, no driving needed.)
4. Borrowing from Peter to pay Paul
So I notice that I’ve blown my restaurant budget for the month. But hey, there’s $15 left in my household budget! So I’ll just reduce my household budget for the month and then add the $15 to my restaurant budget! Perfect! Until a week later when I realize that I’m out of laundry detergent and really do need to wash clothes sometime this month. Whoops.
Groceries are a hard category for me. This also falls into my buying in bulk and my failure to plan ahead categories. Food is the hardest area for me to budget. I try to eat healthy and also eat frugally. I will never buy ramen noodles, even though they’re cheap. They’re not healthy. I spend a good amount of money on fresh fruits and vegetables, and prices on both have increased in recent weeks. I am hoping the return of my local farmer’s market will help that. But if my grocery budget is gone for the month and I realize that there are three days left and I don’t have the proper makings of a well rounded meal, well, I’m going to hit the store and buy what I need. My health and my diet are more important to me than keeping my budget. I think what I need to do is budget more for groceries every month, what with the rising cost of food. The goal will be to end the month with money leftover in the budget, but that’s much better than busting the budget all together.
I’m not going to tag anyone for this meme either, but feel free to post your own budget busters! I’d love to see what others think!
Megan is a 40-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.