Sunday, June 7

When is it time to cull the budget?

Photo by Jeff Keen

On Thursday, I talked about the fact that there should be distinctions among the various non-necessary expenses. Right now, they're all considered "luxuries" or "wants." But some items are more dear to us than others. (Thanks to Revanche for supplying me with the term "luxureeds" in the comments section of Thursday's post!)

So, when we start the debt reduction process -- or even just begin living more frugally -- we assess our expenses. We trim out the absolute expendable stuff. We try to keep desirable luxuries (ie, eating out or buying clothes) to a minimum. And slowly we begin to make progress.

Still, budgets are made to be tweaked. So at what point do we take it upon ourselves to reassess our priorities? When do we question what we need, what we want and what we can afford? In short, when is it time to cull your budget?

Many of us have basic budget allotments each month. Personally, I do a week-by-week budget because a) Tim gets his unemployment checks weekly, b) we have so many costs it's easier to break them down and c) it keeps us from spending all available funds at the beginning of the month. Whether you go month to month, week to week or even day to day, the real question remains: How often do you review your budget?

We're not just talking about updating for new expenses or triumphantly lowering the amount of old ones after a successful attempt to decrease your bills. This is the sort of thing that should be an ongoing effort or, at the very least, something that you do at the start of each budget cycle.

I guess I'm wondering how folks handle the more thorough budget scrutiny. Do you sit down and really think through your necessities, luxureeds and flat-out luxuries? Do you make an effort to slowly pare down further? In other words, is there a defining moment when you realize your current effort isn't enough?

I know that some PF bloggers have trial periods. Frugal Dad and his wife decided to try living without expanded cable. After one year, they talked and evaluated whether to continued. (In the end, they reinstated the cable, but it was more for the kids than the adults.) Others try to treat it like a game. They are always trying to find a new savings route: a new savings method, a new attempt to lower expenses, a new item they can live without.

So, for you, is budget scrutiny an ongoing thing? Is it a constantly simmering back burner in your head? Or do you and your spouse schedule times to evaluate budgetary issues? Or is it simply spotaneous, as you find inspiration through blogs, friends' anecdotes or bits of news?

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Blogger Meg said...

My husband and I don't have a firm budget, more like regular bills, "play money", and the rest which goes to food, gas, odd expenses, and then to debt if there's anything left over (though debt payments above the minimums are also part of our regular bills).

In general, we try to keep our food, gas and odd expenses down, but we have had enough wiggle room that we haven't had to cap any of those firmly. At this point, we're pretty comfortable about what we spend on those areas and other things are more important than saving a few extra bucks: eating healthy, visiting friends, buying stuff we need, buying quality things that will last, etc.

We do keep track of our regular expenses, though, in a spreadsheet and have cut it back severely. We've raised deductibles on insurance, cut out cable, cut out some pest control at this point, canceled our gym memberships, downgraded my cell phone to the lowest minutes I could get, decided not to renew some domain names we had, etc. We've even lowered our utilities bill significantly -- a part of which was from downgrading our garbage service to a smaller bin. A few things we did all at once when we started the spreadsheet and then some things we just did over time as we felt we could.

Recently, we have been looking at all our expenses more because my husband is considering taking a job that might pay significantly less than his current one (though open up more of his free time for side work). It's important that we get our regular expenses down so that he can even consider taking the job -- and important to know what we can afford so he knows if he can say yes if it is offered.

June 7, 2009 at 7:16 PM

Blogger Naturally Frugal said...

For me I would say it's a constant simmer in the back of my head. I check my accounts at least once a day online, pay off my credit card every couple of days, and think abou twhat to save and how much to spend.

We have set budgets for food and rent, but not for fun stuff or even transportation. Right now we're doing really well with saving, investing, and retirement so I don't think we need any more of a budget. I find them to be extremely restricting if I try to map everything out, but I know it works well for others.

The time to reassess for us is when we either get a pay increase or decrease, or are moving. Right now everything is stable but we do talk about saving for a house, emergency fund, and vacation at least once a month. Sometimes I randomly decide to up our contributions to those funds as well.

June 8, 2009 at 11:17 AM


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