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Reinventing the Wheel

May 21st, 2008 at 02:26 pm

I was listening to Dave Ramsey on the radio the other day. A caller said that he and his wife had just started doing a budget, and that they kept having all these unexpected expenses - software for his wife's college class, something for the kids (don't recall it specifically) etc. Dave said that these type of expenses could be anticipated, that as time went on and they continued to work on their budget they would be able to anticipate them, that it took people generally about three months to get the hang of it, and that when these things came up the couple needed to have an "emergency budget committee meeting" and decide what they would do.

DH and I have never really had a budget. We've had a loose spending plan that worked reasonably well when our income was higher. We continued this when I left paid employment. Since neither of us are big spenders it worked okay for a while and now isn't working so well.

When DH and I talked about our spending for May we listed out several expenses that we saw coming that month. Soon after May started I noticed four things:
* We had expenses that we should have been able to anticipate, like Daisy's end-of-year dance photos.
* We had potential expenses that are unexpected, like our cordless phone breaking.
* If it was written down we were likely to think about it and come up with a different or lower-priced alternative.
* I've gotten really used to buying "little stuff" that catches my fancy, and I'm going to have to break that habit.

We paid for Daisy's photos. We haven't yet replaced the cordless phone. Since it has an answering machine that still works, it's been moved to another room and we're using a corded phone for our main phone now. Instead of buying a new bicycle DH decided to borrow a relative's bicycle for a while. And I started to keep a list of the little stuff that I wanted to purchase instead of just buying it.

I guess we are reinventing the wheel in many ways. . . and the wheel still works.

4 Responses to “Reinventing the Wheel”

  1. honeichild Says:

    That's a very good idea to make 'unexpected' a line item in a budget.

    I too have a bad habit of buying little things. Yesterday I had to say no to the ice cream.

  2. Aleta Says:

    I like your definition of your old budget (loose spending plan). That's what we had years ago until we made a budget plan.

    It is best if you set up a budget as you see yourself spending now. Manu advisors suggest going through one years worth of expenses and see where you spent most of your money. We all spend more than we think whether it is on computer paper, printing cartridge ink, programs, outings, photos, etc.

    My line item for this is unallocated funds which is a catch all. Some would call this blow money. I never budget out to the penny as some suggest because I always have this category and yes it is budgeted to help with unexpected little items. If anything is a large purchase, it shouldn't come out of this fund.

    We have a

  3. Ima saver Says:

    Looks like it is helping. I just quit buying "stuff" I would rather look at the interest that is building up in my accounts.

  4. sagegirl Says:

    I forget about stuff like school pictures or gymnastics team fundraisers--that stuff that comes up once a year and I don't think about it until it is time to pay it. This year I looked back at last years expenses and tried to find all those things-birthday presents, a new pencil sharpener for DD's room, replacement AC filters. Little things like that--I always forgot to budget for in the past but am working on remembering this year.

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