Monday, March 30, 2009

My Budget Secret...

I don't have one.

We have a money allocation system (80% of earnings to household, including Roths and 20% for personal spending/savings). I set grocery spending limits and guidelines if we're buying work clothes. We have debt payoff priorities. I comb through our credit card bill monthly for spending trends. But that's about it.

Irregular income + irregular expenses have made a traditional budget too much work. The difference between my husbands base salary and actual earnings last years was more than $25K (his base is not much). Paycheck to paycheck the differences can be mind boggling. New house= new bills. Electric, gas, water, & waste water are the utilities that come to mind. Our house was a foreclosure, so we couldn't ask the previous owner what the bills average. Gasoline prices are all over the place and we have to get to from work.

Even during the low months we earn enough so this isn't really a problem. We pay mortgage, credit card (in full), loans, and then send the extra to our current focus. February was the last month since the move that we didn't have funds for an extra debt payment.

As I get a better feel for our bills I'm thinking about using an accrual system for our bills that vary. We're already doing this for our insurance. Next on the list is our electric/gas bill. Our highest bill was twice as high as our lowest bill. The highest bill also coincides with the low point in our earnings.

1 comment:

Fabulously Broke said...

I felt the same way. I don't buy suitcases every month for example and I cut out a lot of things in my budget in general (shampoo, detergents, hair dying, makeup)... and I think I'm at a good balance where I'm happy.

I spend when I want, and I really think about the purchase before I do. Then I feel great afterwards.

Love the blog. Am subscribing and adding you to my blogroll!

Fabulously Broke in the City

"Just a girl trying to find a balance between being a Shopaholic and a Saver."