I’m very old-school when it comes to financial planning. I’ve tried Quicken and various expense tracking apps but when it comes down to it, I prefer an Excel spreadsheet, scratch paper, and a calculator to any of them. I mention this because I spent much of April working on what could probably be called Frankenstein’s Spreadsheet before coming to the startling conclusion that simplicity works best…even in personal finance (Shocking! I know).
So I did what I do best. After complicating our budget, I simplified it.
Instead of 9+ categories that were fairly meaningless by themselves, I chose 5 areas that I felt truly reflected our spending habits and would allow us to more easily see (and control) our problem areas.
Absolute Expenses – includes rent, utilities, insurance, food, gas, and debt (in this case, my student loan). These expenses may fluctuate but they all must be paid each month.
Savings – includes retirement and general savings. We are no longer adding to our emergency fund.
Business Expenses – includes subscriptions and annual dues for my work as a grant writer. As most of these are tax deductible, I track them separate from our other expenses.
Experiences – includes anything that we purchase for the sake of the experience or entertainment (Netfilx, date night, travel, books, admissions to museums, classes, etc.)
Flex Expenses – includes one time expenditures that don’t fall into one of the other categories. This is the most controllable category and it’s our goal to have less than $100 per month in flex expenses.
You’ll note that we don’t have a separate category for debt reduction. I recently refinanced my student loan to a larger monthly payment that will allow us to pay off the debt in less than 3 years. This is a plan that I can live with. That payment is part of our Absolute Expenses. In fact, it accounts for about 1/3 of that category.
Using these new categories, here’s how April turned out:
Goal #1: Live on 50% of our income
Status: We were almost successful. April’s living expenses came in at 55%. Our flex expenses were a lot higher than we would like them to be going forward. We didn’t go on a spending spree. We bought a washer to replace my mom’s decrepit 1996 Whirlpool. This purchase was as much for us as it was for her though, since we do our laundry there.
Goal #2: Spend more time outside the box
Status: We added this goal this month in an attempt to find reasons to stay in our cheap apartment when our lease comes up for renewal (and to also get more exercise). In addition to our mini-trip to Cincinnati, we made a list of 22 activities outside of our home that we either already enjoyed doing or wanted to try. One of those things was to make the most of our rec center membership. This month we went to the rec center 10 times to walk, swim, or take a Tai Chi class. Once we even rode our bikes there (2.6 miles each way). We also went on 4 hikes and attended an outdoor festival in the City Square (which is 3/10 of a mile from our home).
Goal #3: Become a part-time vegetarian
Status: This goal is part of our ongoing effort to reduce grocery expenditures while also eating better (and more local). We’ve cut our meat consumption down to 3-4 meals per week (out of 21 total meals) and eat mostly fish or chicken. As a result, our grocery spending dropped by $66 this month. We never ate much red meat anyway so I don’t miss steak or burgers so much. Know what I do miss? Bacon. Boy do I miss bacon!
Our money saving focus for May is Alternative Transportation. Without a bus system here in our town, that leaves biking and walking. Angie will be out of town most of the month so it’s up to me to carry this challenge. Am I up for pedaling to my mom’s house? Can I get the weekly groceries on the bike? How many days can I go without even starting the car? Stay tuned and find out.