Yesterday I officially blew the Spending Diet’s budgeted amount of $350. As it stands today, I spent $396.65. The reason I’m writing this today and not Sunday is because I’m pretty sure that was the end for the month barring some unforeseen circumstances. I’m not as devastated by this as I thought I would be. Let me give you the breakdown of the spending and explain what I learned and how I’ll be working on this next month.
The heavy hitter was Food. $208.32 (53%) of my total spending was in this category. Broken down further, Groceries was the biggest chunk at $173.35. Fast Food evaporated $19.43 and Restaurants took another $15.54. Personally, I think this is actually really great. I’m a single mom with three small kids. To say I only spent $208.32 on food in an entire month is pretty amazing. After Food, Auto was my next largest expense at $145.95 (37%). This is pretty much completely made up of Gas purchases totaling $143.20 and was what in the end completely blew the budget. I was on fumes this morning after having added the last $10 of my budget to the tank Monday night. The leftover Auto $2 was tolls. Kid-Related and Other expenses rounded up the last of the spending at $21.90 and $20.48 respectively.
The biggest lesson I’ve learned from this experiment is how crucial it is to impeccably track your spending when you’re trying to figure out your finances. I really feel this was a huge missing piece of my puzzle. When I chose the $350 figure for the diet, there wasn’t much to back it up except that it was half of my “leftover money”. When I review my spending, Groceries, Gas, Kids Allowances, and Personal Care items took up $337. These would be the absolute necessities of my spending. $13 for everything else in one month was asking for trouble—even with major restrictions in place on spending. The fact that I hadn’t been tracking my spending as precisely as I should is the main reason, I believe, I blew the budget. So yes, no matter how much you want to avoid admitting it the easy way to fix your spending is by tracking every penny of it. Happy now gods of personal finance? Sheesh.
I learned that it pays to be more thoughtful about my spending. By restricting my spending I learned to ask myself questions like:
- Do we need this and do we need it right this second?
- Can I make do with something, or a combination of somethings, that I already own?
- Is this really a fair price or are there more affordable solutions?
- Are there coupons for this and/or a sale?
- Ok but, do we REALLY need this?
An example of these questions helping me would be the gift I am knitting my friend’s baby. Initially I had planned on buying yarn for a specific project. But with the diet in place, I forced myself to stick to my gigantic box of stashed yarn and Ravelry’s massive pattern resources. Also, when it was time for my son’s summer reading, I realized I didn’t have the money to purchase the books—my initial plan. Instead, I tried the library request system and it was a major success. Every single book was available in a couple of days with the exception of one that just became available this week. I also vastly underestimated my existing supplies (with the notable exception of diapers apparently). It’s pretty impressive how much stuff we accumulate and often forget about to only go out and buy an unnecessary replacement for. And of course, I learned the value of entertainment outside of malls and stores. This month has been filled with books, knitting, pools, movies, friends, and meals and it’s all been very nice. In other words, look in your house before you look out of your house when you’re thinking about opening your wallet.
I also learned that couponing is excellent but with reason. When I first started, I made the common rookie mistake of running out and buying everything that was a good deal just because it was a good deal. This month made me re-examine that inclination and opened my eyes to a different way of effectively using my couponing methods without going overboard. Couponing is not my job, but it makes my job of managing a household a lot cheaper and simpler. By using the basic standards the most extreme couponers adhere to, I significantly reduce my necessary expenses even though I don’t come close to the incredible accomplishments they are capable of.
Another lesson learned is that I’m god-awful at planning for expenses and that really hurts the bottom line. Having forgotten it was my grandmother’s birthday this month (Worst Granddaughter of the Year Award is mine!), I hadn’t budgeted for that. Now, I owe her a dinner next month. The same thing goes for one of my closest friends’ birthdays. I didn’t forget her birthday, but I’ve been searching for her gift endlessly and yet, I didn’t budget in case I found exactly what I wanted. Well, of course this month I found exactly what I wanted at the right price and couldn’t buy it. Needless to say, the more I plan, the less room there is for “surprises”.
In the end, I’m glad I did the Spending Diet the way I did. I needed it. The lessons learned far outweighed any associated discomfort and will only keep producing rewards as I carry these lessons with me into the next month. Seeing my new total for the month, I have to really re-think August’s budget but I also feel much more prepared to come up with a better number than I did last month. I know the jury is often out on these things, but yes I do recommend a Spending Diet for anyone in financial confusion. If you’re not exactly sure what you’re doing wrong, this is a great way to find out. For added incentive, I feel I should tell you I am ending the month with $525 in cash carefully tucked away. I apparently did my initial math wrong, and of course I went over-budget. But in the end, $525 is $525 and it’s $525 I didn’t have July 1st. Right now, the cash will remain untouched, spread safely through various bizarre locations in my house. The reason for this is because I may need a safety net next month as one more major life change kicks in and I’d rather not touch my savings to make ends meet. However, at the end of August I do plan on sending any surplus to the savings account for my children’s annual registration fee of $2700 which is due in just six months. And with that, I leave you so I can budget for next month (carefully and thoughtfully of course).