There's nothing quite like finally acquiescing to peer pressure and creating a budget... only to find yourself in the red!
Okay, so I finally took the plunge. I created a budget. It's obviously a work in progress, based on rough estimates rather than definitive numbers. But, now that we know we aren't getting kicked off unemployment for a couple of months, I figured it was time.
To make the goals slightly easier to keep track up, I broke everything down into weekly amounts. This way, I can put aside small amounts each week, rather than have large, recurring expenses take a chunk of income. Additionally, by setting weekly goals, I'm less likely to rationalize overspending at the start of the month.
Alas, this snazzy (if hypothetical) budget gave me a heaping dose of panic. After expenses, we were actually negative!
I trimmed the grocery budget and prepared myself for more PBJs, which got us back up to positive. Great, right? Except that I hadn't included our credit card payments yet. We didn't have enough for the minimum amount!
So I took out my mental scissors and started snipping away. The main item I cut was our fun money. It had been $10 per person per week. Not great, but it at least gave us the illusion of money. Still, we had to make the credit card payment and that $80 would go a long way towards it.
The next step focused on cigarettes. Tim has agreed to try and nurse each pack for three days. That would mean one carton a month, rather than two. (He wouldn't smoke it all, but the fact remains that some months we'd have the outlay for two cartons!) That was another $60 of savings.
Then I started looking for a cheaper haircut. Last time, I went to the brand new stylist. She did a fabulous job on a friend's hair and was cited by a local weekly paper as the best "affordable" stylist. Apparently, $50 is affordable? I balk at $40. But then I figured, I knew she did a good job and so it was worth the extra $10. (And she did do a fab job, incidentally!) But obviously, that wasn't an option this month -- and my hair is in definite need of a cut.
So I went and checked out a couple of hair schools nearby. Turns out that Gene Juarez academy charges only $12.95 for a haircut. For long hair, they add on $15/hr, or about $11.50 for the 45-minute haircut. That's still a lot cheaper than $40, let alone $50. Plus I clicked on "special offers" and found a coupon for 1/2 off any service performed on a Monday or Tuesday. Altogether, that's a haircut for $18.32 with tax and tip. Not bad at all!
These changes got us up to nearly $200. That would be the minimum payment plus $60. That got us through the month, but I was pretty upset at how tight things were.
I sat down Tim, to explain why we had to be so careful from now on. I explained that the real problem was quarterly taxes. Then a little voice in my head cleared its throat. "Uh, hello?! Taxes, dummy? Maybe that's why things are so tight?"
It was because of a huge chunk payment of $421 (for self-employment tax) that our budget was so tight! Things like this were the whole reason I wanted to start budgeting. So that I could put aside a small, weekly amount rather than suffer periodically with significantly diminished income.
I felt stupid. But also quite relieved.
So that concludes my first foray into budgeting. I know I'll be tweaking this over the next few months. Still, it's a project that I can focus on.
This month, I'm specifically paying attention to food: groceries and ordering in. I've explained to Tim that we're going to attempt to not spend the money we've budgeted for meals out. Then we'll have a victory -- and less debt. He was polite enough to at least pretend to be enthused by the idea.
No wonder I married him.