Financial Peace University – Week 3
February 17, 2011 12 Comments
This week was week 3: The Budget… errr… I mean “Cash Flow Planning”.
According to Dave (my new favorite saying these days) doing a budget is like learning to ski – you don’t start out like a pro – you fall on your butt a few times and eventually after you keep practicing it gets better. Apparently it takes 3 months to get a budget that actually works – so don’t give up! (I feel REALLY behind the curve, it took me about 6 months to finally get a budget that even half-way worked – and even then I still tweak it on a monthly basis!)
The fact of the matter is that I’ve been doing a budget for over two years now. I have a budget that mostly works for me, I end up at the end of a pay period with close to nothing in my account (which is actually a good thing if you’re doing zero-balance budgets). However – I just took a look at the spreadsheet that I use for keeping my budget and I realize that somewhere I’m missing $327?!?!
Well, I shouldn’t say I’m missing it, it is called “wiggle room” at the bottom of my budget. But you know what? I don’t end up with an extra $327 at the end of the month. Some how that money is wiggling right out of my budget and I have *no idea* where it is going!
Since I’m not relying on the credit cards and I’m not going overdraft, somehow the last 6 months I had just ignored the fact that $327 was flying right off the budget sheet with no rhyme or reason to it!
So, I’m going to do this the Dave Ramsey way! Here is my plan for the next two weeks before my next paycheck comes:
- Rewrite my budget to be completely zero-balance. No extra $. No wiggle room. (Though I will have a Miscellaneous category, just in case!)
- Switching to the envelopes. I am finding recently that I’m not giving enough thought to purchases I make on my debit card anymore. I have one account that is just for spending, so I just do everything out of there – but even though I have a budget on how much I should theoretically be spending in the categories for that account I’m not actually tracking to make sure that the money is being spent properly. To give an example: I have allocated to this account $300 for food, $70 for gas, $45 for pet food, $15 for toilettries, and $50 for miscellaneous. So I have $480 in spending money every month in this account. But I don’t actually spend $15 for toilettries and $45 on pet food. I just SPEND the $480 on these things and HOPE that I don’t overspend in one of those categories. I need to stop hoping and use envelopes!
- Re-evaluate my spending habits. The number amounts that I’ve allocated to my different categories were based on my spending habits before I moved to Kansas. I’ve now been here 6 months I need to reassess my spending habits. I may be spending more or less in each category than I have budgeted for.
Thoughts of Week 3 of FPU: I was a little skeptical about going to the budget class. I know budgets, right? I’ve been making one monthly for 2 years. OMG I HAVE BEEN DOING IT WRONG! I shouldn’t have $327 wiggling out of my budget every month, I need to give that money a name and make it have a purpose! Expect a very detailed post about this soon, I’m been crunching the numbers and it isn’t good my friends… it is not pretty!