Wednesday, December 23, 2015

That oh so irksome home budget!

Unlike our officials in Congress, where the spending goes on 24/7 and with wild and uncaring abandon, I quickly learned the truth about personal finances; that there's gonna be no bailout for me should I get into trouble....

Home budgets are a little like living healthy life styles. You want them to stay lean and mean and be ever so frugal. (It's all basically an exercise in another form of restraint, I realized as I took in my enlarged torso)! Just like my stomach, my wallet always wants to possess all it sees. (For me, a great afternoon would be sitting at my computer shopping the net. I wanna buy until I drop)!

That was then, and now is now. I'm older, a little more wiser and was fully aware of the need to create a budget and then hold to it come hell and high water... (and usually both will pay me a visit at some point during the coming year). So, I got down to business and threw a few figures down on paper. That's also about the time the serious drinking commenced. Just kidding, my beer budget went out the window along with my frequent forays to local restaurants, early on in the process. A fixed income will do that to ya. There's always way to little coming in and a flood going out.

Interestingly, a budget can quickly be divided into to major categories; fix expenses that must be paid and two other categories that you might have at least a little control over. For me personally, I divided them up as follows:

Fixed and no control – Mortgage, Home owner fees, phone, insurance, Internet and TV!
Some control – Electric and water/trash bills!
Flexible and therefore cuttable – Groceries, entertainment, discretionary spending on junk you don't really need.

Very quickly, I came to realize that the largest elephant in the room was my enormous grocery bill. At $400 plus per month for one person, it seemed kinda high and was the one area in my life I felt I could make some inroads into. So, I merely listed the other items on a piece of paper, knowing the amounts of some and estimating the others... leaving the grocery column blank to see if there was anything left.

For me, I came to the realization that for month to month living, I would have to forego shopping the net or going to the local strip malls for the foreseeable future. If I just had to buy something (like socks), that money would have to come from my meager savings. A somewhat sobering thought. But, if I could manage that, I'd have about $300 to spend on food! So, at least I had a goal! Now it was time to take a hard look at what I had been buying to see where that area could be trimmed down by a hundred dollars or so...
Item A

Fortunately, I like to keep fairly detailed records of exactly what I purchase. I employ a self made 'form' that helps me to stay on track whenever I get to the local store i n my area. (See item A). I took that information for an entire month and entered it into a data file so that I might break stuff up into categories and thereby derive a percentage for each. My categories were common sense; meats, dairy, breads, etc. I thought that by looking at my expenditures in this fashion, I might spot opportunities where I could cut back a little. Below is a simplified pie chart that made it very clear to me on some areas I might want to consider cutting back on. Gee, pop and snacks might be one area. And, all those TV dinners? Maybe I could cut some of these out and buy a few more vegetables... just saying...

The bottom line to all this budget thing is the fact that they can help a person like myself to see not only where the money was going, but also how I might be able to improve my life in the bargain. Now, if I could just get the government to go along with a similar concept....

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