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I blew my budget this month

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Anonymous
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I blew my budget this month

I blew my budget this month. I switched my car insurance to be paid every six months in stead of monthly, which will save me about 10% on premiums. But in order to make the switch, I had to pay a prorated amount for a few of my cars which ended up being around $400 extra that I was not planning to pay. Bummer. I am also having a difficult time budgeting for incidental expenses (e.g. Father's Day gift and a couple of other random purchases). Overall, I feel like I am doing well on my budget. I have cut back on eating out, I now take note of what I am spending in the grocery store and try not to go over what I budget instead of just shopping with no limit, ect. But I still feel like I blew it, even though I know that the car insurance switch needed to happen, I hate to look at the numbers on my spreadsheet, knowing I just spent into some of the "padding" in my checking, which means I spent more than I made this month. Hashtag bummed

Message 1 of 4
3 REPLIES 3
toothgrind3r
Established Contributor

Re: I blew my budget this month


@Anonymous wrote:

I blew my budget this month. I switched my car insurance to be paid every six months in stead of monthly, which will save me about 10% on premiums. But in order to make the switch, I had to pay a prorated amount for a few of my cars which ended up being around $400 extra that I was not planning to pay. Bummer. I am also having a difficult time budgeting for incidental expenses (e.g. Father's Day gift and a couple of other random purchases). Overall, I feel like I am doing well on my budget. I have cut back on eating out, I now take note of what I am spending in the grocery store and try not to go over what I budget instead of just shopping with no limit, ect. But I still feel like I blew it, even though I know that the car insurance switch needed to happen, I hate to look at the numbers on my spreadsheet, knowing I just spent into some of the "padding" in my checking, which means I spent more than I made this month. Hashtag bummed


These things happen, but most important thing to do is to stick with it!  Make adjustments.  Or, as YNAB puts it, "roll with the punches".

 

I have an "unexpected expenses" category that I add money to every month that would cover stuff like this.  Not emergencies, just stuff that I didn't budget for.  

I'd also suggest creating a "gifts" category.  You know they're gonna come up, even though it's something you don't always think about.

I've got some cards. Some are pretty, some are ugly. Some are more useful than others.
Message 2 of 4
Anonymous
Not applicable

Re: I blew my budget this month

Budgeting is not about monthly positive cash flow. Yes, you need positive cash flow. However, every month need not be positive. Before I had an emergency fund fully funded, 20% of my net went into a separate account for emergency expenses. Now this fund helps me ride unexpected waves in my expenses. I am lucky in that I save or invest about half my net income. But I automate most of my savings, which means I only ever get to play to 50% of my net for regular expenses. My emergency fund helps me ride out any of those rough patches without liquidating investments and the like. 

 

When I first moved out of home right after colleage and before grad school, my budgeting was a lot less flexible. I had months where my expenses were more than my gross income due to car repairs, dental work (needed an implant), and the like. I always tried to keep a small emergency fund around though which allowed me to ride those waves without going into CC debt. A good budget should have room for these unexpected expenses. A good budget should also have room for savings. If you are going over budget due to routine expenses, that is a problem. If unexpected expenses put you over budget, don't worry about it and make sure you leave room for savings to cover those in the future.

 

If entertainment or travel busts your budget, that is a problem as well unless you planned for it. For example, I save about 5% of my net for my yearly vacation. I go on other short trips during the year, but I budget for them in my monthly miscellaneous category. For my yearly vacation though, my monthly budget cannot accomodate those expenses in any given month. But since I save for it through the year, I don't worry about the higher expenses in that month. 

 

You should be proud of yourself for creating a budget and reducing expenses. Don't get too frustrated by months where you go over budget. It happs to most of us. As you save more, you can also eventually treat a budget more like a guideline than anything else. Nowadays, I don't strictly budget the way I used to (other than for savings), since I am saving a lot more than I need to. But when finances are tight, it is very important to try and keep a tight leash on your spending. 

Message 3 of 4
Anonymous
Not applicable

Re: I blew my budget this month


@Anonymous wrote:

Budgeting is not about monthly positive cash flow. Yes, you need positive cash flow. However, every month need not be positive. Before I had an emergency fund fully funded, 20% of my net went into a separate account for emergency expenses. Now this fund helps me ride unexpected waves in my expenses. I am lucky in that I save or invest about half my net income. But I automate most of my savings, which means I only ever get to play to 50% of my net for regular expenses. My emergency fund helps me ride out any of those rough patches without liquidating investments and the like. 

 

When I first moved out of home right after colleage and before grad school, my budgeting was a lot less flexible. I had months where my expenses were more than my gross income due to car repairs, dental work (needed an implant), and the like. I always tried to keep a small emergency fund around though which allowed me to ride those waves without going into CC debt. A good budget should have room for these unexpected expenses. A good budget should also have room for savings. If you are going over budget due to routine expenses, that is a problem. If unexpected expenses put you over budget, don't worry about it and make sure you leave room for savings to cover those in the future.

 

If entertainment or travel busts your budget, that is a problem as well unless you planned for it. For example, I save about 5% of my net for my yearly vacation. I go on other short trips during the year, but I budget for them in my monthly miscellaneous category. For my yearly vacation though, my monthly budget cannot accomodate those expenses in any given month. But since I save for it through the year, I don't worry about the higher expenses in that month. 

 

You should be proud of yourself for creating a budget and reducing expenses. Don't get too frustrated by months where you go over budget. It happs to most of us. As you save more, you can also eventually treat a budget more like a guideline than anything else. Nowadays, I don't strictly budget the way I used to (other than for savings), since I am saving a lot more than I need to. But when finances are tight, it is very important to try and keep a tight leash on your spending. 


I do have an emergency fund but I haven't felt the need to use it yet. It would have to be a true emergency before I allowed myself to get that money. Unfortunately, I found out that my boyfriend lost his job today. So I have reworked the budget and will cut back on spending even more, since my expenses have now increased by a considerable amount of money. One step forward, two steps back... I am just so glad that I only have a small amount of student loan debt and no consumer debt. If I had consumer debt I would probably be freaking out right now.

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