Wednesday, June 4, 2008

My 2008 Budget

Passive Family Income had a great post about his family budget. I've always enjoyed making budgets, but mine have worked differently. Typically I took a legal pad, wrote my monthly income at the top and then subtracted all my expenses. Then what was left was budgeted between food and entertainment and so on. To be perfectly honest, as much as I enjoyed the process the result was a bit depressing. There is something very negative about that process. What I like about his is that he lists everything, what the actual amount was, and then puts the difference in his expense fund. Somehow, that seems a lot more positive to me.

So, this week I have been working on my budget. It's coming along well, and as I am working on it I have learned some very interesting things.

First off, when I put in only fixed expenses - mortgages, car payments, insurance, things of that nature, I was able to almost make the budget work. Not quite, but close. It was when I started adding in the other things - groceries, gas, entertainment, savings, pay off the credit card, schooling, car repairs - things like that, that the budget shows my $900 deficit. So in other words, if I don't eat or go anywhere, I would only have to dip into savings by about $275! Oddly, I found that really comforting. Of course it isn't practical to not have those things in the budget (at the very least I need gas money to get to work) but it is somehow good to know that it isn't quite as scary as I thought. This is, of course, is not including extra income made by the methods I am working on, both passive and non-passive. So really, I am working (and saving) to afford the good things in life. I like that. It makes it a little easier. What is more, those are expenses that I can control to some degree and work on lowering.

One thing I can't do is know exactly how much utilities will be at the house. My ex gave me a 10 month average on what he spent, but that doesn't really reflect what it will be like when I have the house. For example, his average electric bill is $52.40. Mine last month was $8.35. Now granted, we are talking about the difference between a 2300 sq. foot home and a 400 sq. foot apartment - but I am pretty sure I can cut those bills down somewhat. Still, I am going to use his numbers at first and see how it goes. Personally I don't use utilities that much. I'm the type that unplugs her microwave between uses. At the house, however, I won't be able to do that (the plug is behind the microwave mounted on the wall) and I am not sure how many other things I will have to do differently there. My best bet as I see it is to use his numbers and then adjust accordingly after 3 months or so.

One other number I am working on is adjusting my insurance payments. My brother in law is an insurance agent, so he takes care of all that for me. He and I have talked about some changes I could make to decrease those payments. One bit of good news is that the ex's photo equipment will no longer be on the house insurance which means that will be going down. Yay!


passivefamilyincome said...

Thanks for the mention on your site! I am finding that the biggest areas to cut in our budget are the energy costs. I purposely budgeted $150 / month for both electric and gas for a total of $300. We just moved into a 3,300 sq. ft home and I have no idea what it will cost other than talking to neighbors and friends on what there bills are. In addition, we recently moved from Michigan to the southeast, so obviously our electric bills (AC) will be more and are gas bills (I hope) will be less.

Good luck with the budget!

Dawn said...

You are most welcome!! It was really, really helpful to me.

Funny thing - I am in Michigan! So, yeah... I know all about those heating bills.