How I Tracked, Caught, And Tamed The Beast

Photo by jessi

Dear Reader,
Do you ever wonder where exactly your money goes? Does it seem to evade you at every turn? It’s time to put your hunting gear on, and track down that elusive beast.
I would say, after making the initial decision to become debt free (what good is a course of action without commitment?), the most important thing I did was to create a budget. I looked up the word “budget” in the dictionary, and the definition I liked best was “to plan in advance the expenditure of.” I am not a stranger to a budget. My parents helped me create one in highschool when I started receiving income. What I have been a stranger to is the “in advance” part. My budget was more reactive than proactive. And it remained that way through the first six years of marriage. I would spend money and they try to figure out how my income would cover it. So $16,000 in credit debt later, I asked the age old question, “Why can’t I stick to a budget?!”
There was no sticking because there was no actual path to follow. I was more like a hunter lost in the woods, looking hopelessly for signs of my prey. It was very elusive. And I wasn’t really sure what to do with it should I actually catch it. Well, right after I made the decision to become debt free, I made the decision to change positions with my money. It was my turn to lead and its turn to follow.
The first step I took was to determine exactly what money I had coming in. My income is fairly steady, so I was able to get a good picture of what I had to work with. The next step was to determine my recurring monthly expenses (rent, utilities, cell phone, subscriptions, etc.). I found out these took up a large percentage of my income. And where was the little bit left (and then some) going? What I discovered was that eating out, impulse spending, entertainment credit charges, and “stop-by-the-store” grocery trips were the main culprits. I immediately put a freeze on these ugly habits.
Now that I had a good idea of what was coming in and what was going out, I looked back at my recurring monthly expenses. I decided what needed to stay, what needed to be cut down to size, and what had to go. That not only put us back into living within our means, but freed up some money. Then I started hacking away at random expenses, putting serious caps on them or eliminating them all together. All those little conveniences or extra-curricular expenses had to go. My budget program shows the average expense of a category for the past six months. I was surprised to see how high some of them were. What reason does a renter like me have to spend hundreds of dollars (that I don’t even have) on house improvement and maintenance? I could come up with no good reason at all. It was simply immaturity and very poor decision making.
Things were starting to look pretty good. The path was made and the beast was in view. The money was accounted for and I was ready to stick to this plan, paying very close attention to it. We now had a good chunk of money going towards debt each month. But wait, something else was missing. I looked back at over the budget, and right there at the top was “Tithes and Offerings.” Was I avoiding that on purpose? I looked at the designated amount. Pathetic. Knowing that is integral to who I am and who I want to become, I immediately bumped that up and trimmed a little more elsewhere. In retrospect, I did not like how my giving amount was determined reactively. Since then, I have made sure that gets addressed first.

Here is a recap of the steps I took:

• Made a decision and determined the goal (in our case-debt free in 2 years)
• Determined current income
• Determined current outgo
• Assessed the importance of all recurring expenses; eliminated some, cut back others
• Assessed the importance of all nonrecurring expenses; eliminated most, cut back others
• Determined amount to pay towards debt
• Determined amount to give to church
• Assessed expenses again; trimmed a few more
• Reevaluated goal to make sure it matched what the budget said we could do
• Applied budget immediately

This is by no means a “how to” on the subject, but rather a visualization of how I applied the things I have learned. I hope this would encourage anyone who is about to make that first step. For more (qualified) information, check out my resources page.

What tactics (different or the same) did you take to address your budget? Did you find them effective or not so effective?

“I have enough money to last me the rest of my life, unless I buy something.” – Jackie Mason