So we did it. We sat down this weekend and with the help of Microsoft Money 2005 we created a budget.
And we’re alive. Both of us. With all of our fingers and toes.
We’ve been tracking our expenses for the past three months and started out from there. From seeing what we were spending our money on in the prior months, we were able to have a starting point for what exactly we’re budgeting for. We were also able to see right away the categories that money seems to leak into, such as dining out (you’d think that I just devour my pay stubs when I receive them – maybe LAMG’s $20/day plan may work…)
Honestly, making the budget it was pretty easy because mostly everything was accounted for. Regularly occurring expenses such as rent, utilities, phone, internet, etc. have always been paid first. Then we listed our regularly withdrawn savings into our Roth IRAs and for the wedding. Groceries have also been pretty consistent from month to month. All of these numbers are pretty static for the time being, with the utilities categories differing by at most 10% during any given month.
Categories that weren’t static regular expenses were now assigned a static number for the budget for each month. I’m looking at you, dining out. Entertainment expenses were also capped off. That sucks, but what sucks even more is eating the contents of my wallet. Her is an excellent cook, so we’ll make do with the grocery budget that we’ve had.
The most difficult part of the budget was all of the other expenses that may not necessarily occur each month. We seldom drive, thus automobile maintenance expenses generally only occur every few months. Those expenses could also range in cost by hundreds of dollars. We ended up allocating a reasonable amount of money each month whether or not it is used or not. Other categories done this way are pet expenses and gifts.
We’ve also setup guidelines for good and bad consequences of budgeting snafus. The bad consequence of blowing the budget on any given category is the deduction of funds from one of our funner categories for that month. The good consequence of going under the budget is to transfer any leftover money into savings.
Today is the first day of our budget. I hope that I don’t eat it.