Reworking the budget - Counting My Pennies

Now that the end of the year is in sight, I’ve been taking a high level look at my budget to see where my money has gone this year and how I want to change the budget for next year, if at all.

I don’t think you can ever have a perfect budgeting system, so there are always ways to tweak and improve. One thing that really stands out to me is how I categorized a few things. For example, one of my categories is “Cosmetics and Toiletries.” Pretty basic, right? Well, I realized that the category makes it hard to analyze my spending. It contains both necessities and non-necessities. I need sunscreen. I don’t need sparkly eyeshadow. So next year, I’m going to pull this category apart.

I also have a similar deal with my “Books and Music” category, as I include my expenses for my choir music in that category. Dropping $30 in a month on Books and Music at Borders is very different from buying $30 worth of music for choir rehearsals.

So I will continue to tweak. Anything to improve my savings!

Megan Smith

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.

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