My new year’s resolution is to create a budget and stick to it. This blog is my reflections on this experience. Step 1: create the budget. A friend of mine told me about this budget tool by Michael Ham so we decided to try it out. It’s an Excel workbook that helps you to budget for all of your obvious expenditures like the mortgage or rent and utilities, but it also asks you to budget for easily-overlooked items like all the things in your house that, once they break, you have to replace or live without. Not budgeting for the latter has been one of our problems for awhile. These unexpected expenditures represent some of our “yikes” bills and we need “yikes” money set aside for them.
So, we started working on the spreadsheet. First up, input my monthly salary after taxes. Then the spreadsheet automatically takes away 5% of that to put in emergency savings (basically, that’s for inevitable screw-ups like “uh, we were supposed to budget for new shoes for Charlie? Woops.”). Now, the basic principle of this workbook is that if you budget for every possible expenditure, then you’ll know how much money you have left for your “allowance.” With the allowance you buy everything that you didn’t put in your budget, including groceries and entertainment. If you’re out of allowance money and you didn’t budget for an item elsewhere then, well, you shouldn’t buy it. As you work through the workbook inputting all your various expenses, there’s a running tally at the top of the workbook that tells you how much money you have left for your allowance. (Oh, by the way, Mark HATES the word allowance–“what are we, ten-years-old?”–so we call it our “kitty.”
After inputting all our other expenditures and messing around with the numbers some more, we finally settled on a weekly kitty of $150. Mark gets $140 and I get $10. Mark, as a stay-at-home dad, does all the grocery shopping and pays for virtually all of the Charlie-related expenses. My $10 a week can go toward the occasional coffee or snack at work (although I’m trying really hard to always bring food with me to work so that I don’t spend money going out to lunch).
So, that’s it. $150 a week. I’ll keep you posted on how it’s going. And, I imagine that a lot of my blog posts will be about our grocery bill and how we’re figuring out ways to eat less expensively since food has always been a major expense for us. Wish us luck with this new budget–I have a feeling we’re going to need it!