Budgeting is really hard

Last month, I set out to get a real handle on my budget. Mostly, I was driven to do this because my sister was doing it and was all excited about her new budget. You know what? I was proud. I thought I didn’t need to budget because I was tracking my spending. Every day, when I bought stuff or got a notification that a payment had processed (for subscriptions or patreon kinda things), I would write that purchase down in my journal. I was tallying those up every week - I spent $756.34 dollars this week kinda in your face spending look I was doing. You know what? It was complete bologna. I was fooling myself. Sure, I was tallying up my spending. Sure I was adding it up monthly and putting it on my little income-outgo graph in my journal. I was not reckoning with it, though. I was just seeing it and not seeing it.

I set up my little income-outgo graph as a clustered bar chart. Basically, each month, there is a bar for income and a bar for outgo. They are stubbornly about the same height. However, since they are close enough, and I have a bit of a cushion, I don’t have to think about it. That is a huge problem. If you are doing this, stop. It’s not working. It’s not making your money work for you. It’s just letting money seep away until you don’t have any more.

Here’s what I did that opened my eyes. I took each account I have - checking, savings, credit card - and I got my beginning of year balance and every transaction since the beginning of year. Ignore investment accounts for now - we don’t budget with those anyway - they are for the future. At first, I got pretty fancy with it; I loaded all the data into my fancy statistical program and created a bunch of graphs. It was fun. Then, I got real with it. I created some buckets for spending (Gas, Groceries, etc), and I bucketed all of my expenses. Sadly, since I don’t remember, trips to Target or stuff coming from Amazon ended up as “Other” because, well, who knows if I bought bread and spices or a candle with that $8.56? After each transaction was bucketed, I could see them all. When you are staring at your actual buckets, you can think about how much time it costs to do stuff (because income and outgo can be readily compared).

Then, if you are like me, the ugly questions start up, “did I really work 60 hours this month for stuff I can’t even categorize?” That’s not okay, guys. It can’t be. Because I don’t want to wake up in 20 years and have just gone through 20 years of buying stuff and then pushing it out to thrift stores. Or, let’s be real, I do eat a lot…so well, I don’t want to think about that loss of money.

Ok. Sure. I need a budget. Like, a real stick to it budget. Not what I have, which is, I spend about X on that stuff kinda budget. Seriously, just spending about what I think I always spend on that kind of thing is not a budget. Don’t be doing that. It’s not okay.

I tried. This week, I tried. I sat down and looked at my averages. I thought about what I needed to buy. I thought I had it. This week, I’ve bought plane tickets (not budgeted), hotel, and luggage for a trip my kiddo is taking to college ( I really thought they would stay online only this semester ). I bought a ski pass for the other kiddo because our discount from the short season last year was about to disappear. These are not trivial things. They are things that I could have/would have spent money on sometimes. So, I let the budget go. This is why I say budgeting is hard.

I don’t think it is impossible, though. I could have foreseen these expenses and put them in my budget. I could have realized that starting at a week misses the whole big picture.

Here’s what I’m going to do. I’m going to go through the last year. Then, I’m going to figure out what repeats. What might I expect to come up with. Then, I’m going to (1) reassess how much I want to save/spend, (2) pay savings first, and (3) make a budget that reflects the remaining items. I see the potential pitfalls here. If I set my savings goals too low, there’s no push to make decisions about reducing expenses. Since I see that there are clearly some expenses that are unnecessary, I’m going to try to accelerate savings.

What are your best budgeting tips? I’m seriously all ears

tl;dr: budgeting is hard because you have to make real choices. Looking closely at expenses and income can help drive those decisions.