CarrieDaway

It’s the end of the month and time for the budget report.

I wish I could say we killed it and it was a great way to start the year but this is honest reporting…

January Income
Going forward we’re basing our budget for the current month on our previous month’s income (ie February’s spending will be compared against January’s income) to determine savings but since it’s a new year and December wasn’t truly representative of our income we’re skipping that part in January.

If you looked at the budget template, I break down our spending into two broad categories Monthly Bills (the things we are definitely paying for – mortgage, car payment, utilities, daycare, etc.) and Variable Expenses (the spending we hypothetically have more control over). Here’s how those areas shaped out:

January Bills
Everything was on target until we received the gas and electric bills that were over by $60. The amount we set in those categories were based on an annual average so will there be other months when it’s less than $60? Possibly but it’s something to keep an eye on and adjust long term if necessary (I’m also sure the Polar Vortex isn’t helping for next month).

January Expenses
Food is normally an exorbitant expense for us but we did really well staying below our budgeted amount (although only by about $60). We didn’t go out to eat this month and while Danny does indulge in snacks on occasion, overall we didn’t get any treats like Starbucks or ice cream either. We stayed just below budgeted costs for Lucas and household too which is all good because our car expenses busted the budget.

First Danny’s car needed an oil change. It’s a cost that is built into the budget but then he received notice that he was issued a parking ticket in November for $65. Detroit does not put tickets on your window so unless you call to see if you have a ticket they simply notify you when they’re ready and it’s infuriating – especially since we take such great care when parking. Then Danny’s car had a flat tire and a new one cost over $230. A silver lining is that I basically worked from home all month and didn’t have to pay very much to park downtown BUT we still went over our budget for car expenses by more than double this month.

January Overview
At the end of it all we went over budget by $200 this month. Since we don’t have an income to compare it to, that number lives in a vacuum.

Looking Ahead
I wish there was a great outlook for February but the truth is, it’s going to be a harder month for a number of reasons:

• • Decline in Income: We’d hoped that Danny would get a raise to start the year but the opposite has happened due to increased insurance costs AND his work is no longer providing parking so it’s a new expense we have to pay for. This is a significant hit and we’ll find out how significant in the weeks ahead. I get paper checks and only one was deposited in January; therefore, next month we’re working with half my monthly income.
  • Lucas’ Birthday: Lucas’ birthday is at the very beginning of March and we’re going to pay for his party in February. We aren’t doing anything too extravagant but since it’s his last birthday as an only child and only a couple weeks before his world is turned upside down with Sam’s birth we wanted to make it special. Consequently, we’re going to have to increase the Lucas budget a little to cover those expenses.
  • Lucas’ Soccer: Lucas has been in soccer class for two semesters and he loves seeing Estella every week (his love for soccer is still TBD). This current semester ends in the middle of the month and we have to decide whether or not to register. I love having a reason to get out the house in the morning on Saturdays (aka away from the television) and I think being in a structured environment is good for him but I still need to figure out if this is a luxury or an investment.
  • Valentine’s Day: The new Civilizations comes out and Danny really wants us to get it to play together. It’s cheaper than going to a restaurant for dinner but we can’t really afford to go to a restaurant anyway. Regardless, it’ll be a luxury for the month.

February Budget Breakdown

I want our budget to be realistic even if it’s not pretty; therefore, I made some adjustments to next month’s spreadsheet. I increased the amount we expect to pay for gas and electric, gave us less money for groceries and doubled the money we normally spend on Lucas to account for his birthday (this is also a preview for March when it will be doubled on account of Sam).

I also had to eliminate the money we normally set aside for our insurance bill. They’ll be more on this later but we pay for the entire year in the summer and in our monthly budget I prorated the amount so that it’d be in the bank. This month we simply don’t have that money. Since we will have a tax refund I’m not worried about being able to pay the bill when it comes but in order to be transparent, I wanted to mention that if we had to pay that bill next month we would have to lower our variable expenses by over 10% (and not spending more on Lucas or a game would not come close to making that up).

Laying out our budget like I did in the original post here’s how things shape out.

• • • 33% – Variable expenses
      • Food, gas/car, Lucas, household, misc.
    • 23% – Mortgage
    • 16% – Bills
      • Car payment, gym, and utilities
    • 18% – Daycare
    • 10% – Digital Expenses
      • Phones, cable, internet, Netflix, Spotify, Google, Amazon

With the shutdown business and claims that people could survive without a month’s pay, I think this is a great example of why people can’t.