October Budget

Okey dokey folks, I have a feeling this might be a long one, so it gets its own post instead lumping it in with my October goals wrap up (coming soon!).

So.

Budget.

Ugh, amirite?!

Whenever I hear the word diet my brain immediately goes to “Diet is a 4-letter word”. Not that I’m against 4-letter words, per se, I just think diets are kinda dumb and don’t work. But we’re not talking about diets now, are we? No we’re not. (That was rhetorical and didn’t really need an answer, but I answer it anyway.).

The reason for my rambling about diet well, I wish there was a phrase that related to budgets. I don’t think “budget is a 6-letter word” quiet sounds the same, does it? No it doesn’t. (Rhetorical again, I know).

So, how did I do?

First, let me start with September. I thought I was doing pretty okay in September until I tallied everything up in WaveApps and realized I had spent four times my food budget. Seriously FOUR FREAKING TIMES. Who does that?! More importantly, HOW?!

*sigh*

Bye bye fun foods.

Before getting into the nitty gritty, I have a pie chart for you. I mean, really who doesn’t love pie charts?! Fuddy duddies, that’s who.

This is my pay off debt in six months perfect budget pie chart and how I would like (in a perfect world) everything to fall into place. I do realize this is somewhat unrealistic, but I want to compare my perfect budget against how I actually ended up spending, so here’s how it all shakes out as a percentage of my gross income.

Why my gross income you ask? Because my deductions can change throughout the year (just this month I paid the maximum in my employment insurance and pension amounts, so that means my net income increase. Woo-to-the-freaking-hoo!) so this is a more comparable figure for me.

Enough writing – show us the chart you say?

Ask and you shall receive!

expenses_gross

And, just for funsies, I’m also including a comparion with my net income.

expenses_net

That savings section looks pretty effing awesome there, doesn’t it?!

For comparability sake, here is the pie chart of October – my actual spending as a percentage of gross income.

Oct Gross

Hmmmm.

I did okay, but looking at that savings/debt section there is a lot of room for improvement.

Since I’m just starting my budgeting/paying off debt journey, I don’t plan on getting too hung up on slip ups. A lot of this included buying some fun running gear (and necessary winter running gear) as well as purchasing some wine while at my marathon in Kelowna. Some quick math tells me that without those purchases, my savings/debt number would have risen from 18% to 26%.

One of my October goals was to keep my spending budgets in the “green/yellow” range in WaveApps. I didn’t quite make it 100%, but I was definitely far better than in food overspending in September!

Oct WaveApps

Slowly, but surely, right friends?!

I have a Google doc spreadsheet that I update with my actual debt balances and my expected spending/income between now and the end of April 2014 and according to that, I’m still on track to have my debt fully paid off by April 30, 2014. I’m doing to do my best to keep to that goal and continue to be mindful of my spending and comparing wants versus needs.

Some days I’m tempted to get discouraged, but just because it seems slow at first, I’m reminding myself that this is a journey and I’m blessed to be able to have a relatively realistic goal of six months to get out of debt. To be super cheesy and link paying off debt to running and training, I know six months ago I would not have physically been able to run a marathon, yet just a few weeks ago I did so, successfully. It takes hard work and mental focus to both run and stick to a budget (because, let’s face it, as much as a marathon hurts, running is fun. Budgeting is decidedly not fun. At all).

In short, hard work pays off.

Tell me: what have you achieved by staying focused and putting your mind to it? (Not necessarily fitness or financial in nature).

Let’s talk about budgeting

Without divulging too much of my personal information, I’ve decided to start hammering down on my ability to budget.

I live quite comfortably, have great credit, etc etc, but suddenly moving from a 2-income household to a 1-income household was a bit of a shock to my pocketbook over the past 10 months and I’ve decided I’m no longer going to use the 1-income household as a crutch, but will accept it and do whatever I can to be fully independent.

In order to do so, I’ve set 2 goals for myself, both of which I hope to accomplish over the next 9-12 months:

  1. Pay off all outstanding debt
  2. Be able to buy a condo/house

This doesn’t mean I actually will be buying a place, but I want to be in a position where I can. I’ve been a homeowner since I was 22, so to move to renting at 29/30 is a really unsettling feeling. I feel like where I live isn’t mine and I’d love to feel more comfortable where I am and where I live.

In order to accomplish these two goals, I’ve started using Wave.

wave apps

Wave is an online based free (free!) software that tracks all spending in my bank accounts and credit card. I can also set up budgets, so I’ll be alerted if my spending in a certain area exceeds (or is nearing) my budget.

budget example

For whatever reason, my family never really taught me much about budgeting and it’s not really taught in school (and I’m an accountant, yes, I see the irony) so I did some Googling to determine the optimum ranges for spending, saving, etc. Based upon my budget, I’m well within these ranges. Yay!

  • Housing – 35% of take home pay
  • Vehicle – 15% of take home pay
  • Life – 25% of take home pay (includes groceries, clothing, etc)
  • Debt – 15% of take home pay
  • Savings – 10% of take home pay

I analyzed my spending over the summer and determined the number one area where I tend to overspend is food. Not really even eating out, just food/grocery spending, and I certainly don’t need to. This is an area I need to work on balancing my needs and my wants. For example, I don’t need the $6 cheese, but I sure as heck want the $6 cheese 🙂 Sorry taste buds, no more $6 cheese for you (unless someone wants to bring/send me $6 cheese!).

In addition to my monthly budget, I’ve also done a month by month budget for myself starting mid-September through to the end of April. Based upon this (and assuming everything goes as planned!) I will be debt free by the end of April. I really want this for myself – I’ve even considering completely cancelling my cable package in order to save more money (but then I think of the Olympics and don’t want to) since I have Netflix and will keep my internet connection.

I’m also crossing my fingers I’m able to increase my income related to my contract work, as 100% of those earnings go to 1) pay off debt and 2) my savings account, so the more work I’m able to do, the more I can directly benefit from it. I’ve submitted applications for additional work, now I just need to say a prayer and cross my fingers something happens.

I’ll also give myself 10% of any contract income as fun spending money so I don’t feel like it’s all for nothing. This will go toward my Starbucks Card, Sephora, BBW, shoes, clothes, etc so I feel like I’m able to have a bit of fun 🙂

***

While writing this post, I came across this post by Jess Lively and it really, truly, spoke to me and I thin I’m going to change my language around money and budgeting to empower myself.

DontFallIntoICantAffordItTrap-300x300

Thoughts like “I can’t afford it” – especially when we actually do have the resources – place our power outside of ourselves. We feel acted upon and forlorn, rather than feeling like a proactive person who is capable of making choices aligned with our best interests.

Just because we choose to say “no” to something, doesn’t mean that we “can’t.”

What a wonderfully powerful way to reframe things. I love it.

I must admit I’ve been feeling shameful about my current situation. It’s hard to not call myself “stupid” or to tell myself I “know better” but I know shaming myself isn’t productive and merely puts me in a cycle of sadness and results in more spending. I’ve been working really hard on reframing, not shaming myself, accepting where I am (which is much easier said than done) and choosing to move forward without shame.

Like many things I’ll face in my life, I can allow this to define me, or I can take it as a learning experience (even if sometimes these experiences are hard) and move forward. I refuse to let this define me and I refuse to be in this place in a year. I also realize how very blessed I am that with careful budgeting and spending (as unfun as it might be) I’ll be debt free in a year, I fully realize a lot of people don’t have that luxury.

***

After writing this post, I received some books in the mail, one of them being Money: A Love Story by Kate Northrup (her mother is Christiane Northrup, who some people may remember from her Oprah days).

Now, I’m only 1.5 chapters into the book, so I can’t offer a review of the book quite yet, but I can say that I do love some of what she has to say. I’m going to save my thoughts on the book as a whole until I’m finished, but I like that Kate struggled with money and she’s come out on the other side, that’s a refreshing point of view for me.

Do you have a budget?

Do you use software to track your spending?

What areas have you cutback in order to save money?