Friday, January 6, 2012

Budget smudget.

Resolution numbers 3-6 centered around one thing: getting out of debt by paying off what I owe, not accruing more debt and sticking to a budget. Well, I got a head start on this resolution, and I'd love to report the results.

Let's start waaaaay back in January of 2011. I had a master plan. I was going to save up all of my expense checks in a separate savings account so I could have money for Christmas. You can imagine, I drive a lot for work. I hit the goal I had in mind for my Christmas spending in May of 2011. But, I didn't stop adding to that savings account. Every month, I'd take my checks to the bank. Then I thought, "well okay. I guess this will be my 'oh crap, I didn't expect that' savings account." Luckily, I haven't had to use it, but the idea of having money ready when I need it puts me at ease.

Then I started thinking a little more about my financial stability - it's such an adult topic. Something only parents think about, right? Wrong. Wrong, wrong, wrong. Through my undergrad, my stint in Dallas, buying and decorating a house, and grad school, I had accrued some credit card debt. I paid off school as I went, so I was living on a shoestring budget. The problem was, I wasn't actually living like I was on a shoestring budget - I was acting like I wasn't paying anything for grad school. That was dumb. I also had surgery in July, and I've been paying toward that every month.

Another issue I had was I hadn't really set up a budget for anything, so I wasn't sure where my money was going. This is pretty frustrating, to be sure. The result was this cycle: pay more than I can afford to pay on my credit card - run out of money in my bank by the 20th - put the rest of my expenses on my credit card. It was an endless cycle, and it was getting me in to trouble. So, at the end of November, I decided to do something about it.

Of course, I'd heard about Dave Ramsey. When I looked up different {free} items he had on his website, I found a budget worksheet that I could use. I took about 30 minutes to fill out everything I could possibly think of. I used November's numbers to project December's, and before I knew it, I had my entire monthly income divided in to over 20 categories.

Over December, I was overly conscious of the money I was spending. Because my goal was to not touch my credit card the entire month, I had to make sure I didn't go over the amount I had allocated for things I controlled - food, gas, etc. When my natural gas bill came in a little higher than I had projected, I turned around and subtracted from the amount that I could spend at restaurants in the month. I was finally being responsible.

Results: In December...
I tucked away an extra bit into my regular savings account.
I paid 7% of my total toward my credit card.
I reached the halfway point in completely paying off my surgery.
I stayed on budget through the things I could control - except for gas. I didn't take in to account I'd be driving home for Christmas.
I didn't use my credit card once.
I ended up having an extra $150 at the end of the month! I split it 75%-25% between paying toward my credit card and putting it in savings, respectively.

This little post is going to recurring one, so check back on the first Friday of every month, and I'll report on the previous month. Money is a very personal thing, so I'm putting myself out there with this. Please put away your judgy pants and just support me as I strive to be more financially stable. Thankyouandgoodnight.

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