Since I no longer have an income, the spouse and I sat down and decided to re-do our budget, and our budget process. We consistently overspend our weekly “allowance” so that process was simply no longer going to work. We needed to try something different.
We’ve never really followed the YNAB philosophy, since it always seemed like we could never gather enough funds due to throwing everything we could at debt. We tracked everything, but there weren’t really consequences for going over. Those pieces also needed to be addressed.
After several conversations stretching over the course of the last week, we’ve decided on the following plan:
- We’ve worked together on revising the budget, to provide for specific categories. However, this may need some re-jiggering. I just did a “fresh start” budget, and it looks like we have an extra $1,000 or so to put into the budget. This is good news since the current budget is quite slim and doesn’t provide for some things we’d need to save for (like car fees and repairs.) So we’ve got some room for planning.
- We’ll start operating on the “living on last month’s income” principle. With such a slim July, we’ll be able to put the second July paycheck towards August. Then, in August since there are three pay periods, we’ll use the first paycheck for August, then the second two for September and presto, we’re ahead. That will make the monthly budgeting process a lot easier, because then we’ll know exactly how much we have available to budget.
- Consequences for going over in a category means taking from another category, and stopping spending when the category is finished.
This will of course take a bunch of time to negotiate, fail, and renegotiate, but that’s the process with transition periods. We’ll be meeting every week to go over the budget, and see how much we have left for the rest of the month. Proposed Budget for July is below:
|Car Insurance||$ 80.00|
|Spouse Spending||$ 50.00|
|My Spending||$ 50.00|
|Household Goods||$ 25.00|
|Personal Care||$ 118.00|
|Pet Supplies||$ 20.00|
|Rainy Day Funds|
|Emergency Fund||$ 175.00|
|Student Loans||$ 1,320.00|
|TOTAL EXPENSES||$ 3,963.00|
|Left Over from Previous||$ 3,197.45|
|Income (expected)||$ 2,000.00|
|TOTAL INCOME||$ 5,197.45|
|TOTAL REMAINING||$ 1,234.45|
The remaining is actually higher than when we went over the budget together, because we’d been overspending previously. So we’ll need to decide what to do with it. My preference would be either savings or debt payoff. I’d like to increase the debt payments to enough to at least keep up with interest over the next six months. That is the duration of the forbearance on my loans. At roughly $47 per day, and 30 days a month, we’re looking at roughly $1,410. Currently, we have $620 budgeted for my loans, which means we’d need to increase that line item by $790. That would still leave $444.45 to apply to savings, which would be very helpful.
Since we’re doing a different system, that means the weekly updates will be slightly different. At the moment, I’m envisioning a simple updating noting where we are, how much we’ve spent so far, how much we have left, and any changes that have been made. Of course, if any extra information makes sense, I’d include it as well. Monthly reports will be more of whether we hit the budget or not.