I made a pretty rookie budgeting mistake this month.
I spent my money before I had it. Terrible plan. Counting chickens before they hatch and all. And I overspent.
Let’s go back. A few weeks ago, my boss told me I was receiving a small monetary award for a project I had managed over the past two years. It was a resounding success, and that was reward enough, so I was surprised and delighted to find out that I would be receiving a small bonus on top of that. I wasn’t sure when it was coming, but I knew it was coming. Mentally, I figured out how much taxes would take off of the top and started thinking about all the things I could spend it on.
The problem is, I didn’t deal in fact, only in dreams. So while spending money this month, I thought to myself “Well, yes, this isn’t in the budget, but I have that bonus coming, so it will all even out. I’ll probably even have leftover money to spend on things.” I wasn’t doing the math though. I was paying attention only to this magical money that was coming.
Last week, I sat down and updated my budget. And there was no way that my bonus was going to cover my budget overages. I had made a huge rookie mistake. I had thought about the money that was coming and used that thought to justify my spending.
Now, it would have been okay if I had sat down and said “Okay, I have $100 coming to me this month, and I really want to buy those $100 shoes that are on sale. I don’t have the money yet, but it will deposit, so I can spend it now.” Not the ideal way to spend, but at least it would have been a rational way to go about it.
Instead, I just spent as if I had a small fortune coming to me. And surprise, surprise. When the money hit my bank account this weekend, it didn’t cover all of the budget overages. It helped, for sure, but I definitely overspent this month.
Lesson learned. I need to go back to my plan of only spending what I have and not deal with “When this money comes to me.” I need to deal in hard numbers and not in wishful thinking.
I’ll admit – being responsible with money isn’t always fun. But managing to budget so that I have reserved money for all the fun things I want to do? Totally worth it.