Saturday, April 4

Hyperventilation budgeting

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.



Blogger DogAteMyFinances said...

My heart sank for you when I read this. I don't have any deep advice or anything, I just wanted you to know I feel for you.

April 4, 2009 at 3:27 PM

Blogger Meg said...

Oh, that really sucks! But I guess it's better to know than not. We only started making progress on our debt after we started plugging numbers into spreadsheets -- despite the fact that we do have a good income.

For a "budget" my husband and I have a list of regular bills/expenses. Fortunately for us, we have plenty of wiggle room between the "must pays" and the income, though we try to throw as much as possible on our debt.

Can you go without haircuts? I know sometimes it is tough, especially if you like to keep it short. My hair is long right now (few inches below my shoulders) and people keep asking me about it, like why I decided to grow it out, how long I'm growing it, etc. The truth is, I just got lazy about going to get it cut. The savings is nice, too, but I just get my hair trimmed at my husband's barber for less than $8! I'm usually the only gal in there, but I get a simple trim and have had no complaints. Anyhow, at this point, I'll keep growing it at least till I can donate it and still have plenty left. Then again, maybe I'll be selfish and sell it, lol.

April 4, 2009 at 4:38 PM

Blogger Ginger said...

I'm just wondering, why do you need to get your hair cut every month? That seems like an unnecessary expense to me. My stylist says you really only need to get it cut every 3 months or so.

I'm assuming you have short hair and that's why you feel you need to go every month? Why not try growing it out for a new look and some savings?

I don't know the specifics of your situation but that just stuck out for me.

April 4, 2009 at 4:57 PM

Blogger Abby said...


Thanks. Things were a lot better when I figured out this month was a one-off. Next month, we'll have a lot more breathing room.

Meg & Ginger,

Actually, my last haircut was over two months ago. Which is why I'm in dire need of a trim. I guess that wasn't clear, looking back over the post.

My hair is actually longer, for the most part. It's in layers, so I tend to forget how long it actually is. In the back, it reaches around a third of the way down my back.

The layers make it look a lot better, but also require more maintenance. Technically, they want you to come back in about a month's time. I generally stretch it out to 2-3 months. When I have no initiative at all, it's gone as long as 5 months.

Things will be easier starting next month. We'll have at least a couple hundred more to toss at debt.

April 4, 2009 at 8:02 PM

Blogger Shevy said...

I know how that budget panic feels.

When I finally sat down and figured things out several months ago I realized the reason we were having problems was that we were running about $500 per month in the red!

We didn't make as much money in 2008 as the year before (by about $10,000!) and we were just going on like everything was normal. We'd made some cuts but they weren't nearly enough.

Things are supposedly getting better now, although really I'm not going to talk about it until after I've paid off Passover. This is the killer time of year for our budget always.

If I could actually put money away over the course of the next year to use for Passover that would be great! We'll see how that goes.

Anyway, I'm glad your budget turned out better in the end than you'd originally thought.

April 5, 2009 at 1:41 AM

Anonymous Anonymous said...

Hang in there, baby.

You haven't been on IM for a long time! 'Sup widdat?!

April 5, 2009 at 4:09 AM


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