During my *ahem* brief disappearance from the debt busting world, it unfortunately became clear that it was time to reevaluate some facets of our plan, focus in on cutting back once, and being a little bit more realistic about how this journey is going to be successful.
For years it seems, I have always wanted to find the “magic bullet” that would lead to the A HA moment and everything in the financial realm would be perfect and run as smoothly as Excel tells me it should. I mean after all it just simple math, right?
In order to succeed in obtaining financial freedom there’s a quick and easy rule:
Income > Expenditures
Easy peasy, nothing too hard to grasp with that right?
I mentioned in my last post that I needed opinions on how to handle a part of my budgeting shortcomings. You’ll probably think I’m an idiot (I think the same most of time), but you know what has killed me more than anything in trying to stick to a good plan? Groceries and Gas. Two of the most basic, necessary components that every good budget should include. My issue has been our grocery purchases have wild swings – we go for a few days without visiting the local stop and shop, but then we magically run out of everything at once and end up spending way more than I thought we needed to each week. We have certainly cut back on eating out but end up running to the store sometimes multiple times a week to make something for dinner on a night when we have made no plans. And then what happens is instead of making that big juicy snowball debt payment, it becomes the first and easiest place to get back some extra funds when you’re running short. Instead of making the $253 planned debt payment it gets cut down to a lower amount. And we all know what that means – longer term of carrying the debt and as a result more interest paid over time. It also is quite demoralizing when you go into edit your payment to a lower amount. For me it means I’ve failed that month and it truly can ruin my mood for the day.
So – here’s my new plan: Envelope System for groceries and gas. If you don’t know what the envelope system is, basically you’re going to have actual cash on hand for spending in these categories. You can do it for anything, obviously, but since these are my Achilles heel, that’s where I’m starting. The idea is that you have a set amount you’re going to have available to spend for your chosen category. Once you use it up, that’s it until the next time you fill your envelope(s). This not only gives a definitive budget – it also makes you think a bit more about what you’re spending that cash on. Think about it – what’s easier – handing the cashier a nice, crisp Ben Franklin (or hell, Lincoln) that you’ve worked so hard to get, or swiping a plastic debit (or worse) credit card? I know for me spending cash makes me think, do I really need this?
I love Excel. Probably too much, but I do admit it. I regularly download all activity from our checking account, assign each transaction a category and whip it all into a lovely pivot table so I have a solid number of what we’re averaging each month or even week for all our purchases. Using that information, I’m going to start creating cash envelopes stocked for each week, and that’s our budget for groceries or gas. Once that’s spent, that’s it. In order for this to work, there’s something else that has to happen as well – Meal Planning! If we know how much we have available to spend on Sunday before the one and only weekly grocery run, have a meal plan for each night that week and stick to said plan, I’m surely hoping that our wild swings on grocery spending will smooth out and stop being such a pain. Now I’m not saying I won’t stop and grab something if we need it or that anyone’s going hungry on Friday night sometimes – but that must be the exception, rather than the norm.
Could this be the magic bullet I’ve always wanted to find? Likely not, but it at least gets me thinking ahead and trying to be more realistic about things. We’re going to of course have good weeks and bad weeks when it comes to eliminating debt, but the goal is for the good to outnumber the bad.
So, what have been you’re budgeting mishaps? Would love to hear any creative tips/tricks you may have come up with along your journey… after all, if we all share our ideas, who knows – maybe that magic bullet will appear?
Happy weekend all, and good luck!