Weaving My Financial Security Blanket: My Budget
Organization is key!
As I mentioned in my last post Weaving My Financial Security Blanket - Dawn of a New Day, I recently designed a budget for myself. What fun! No, really, I'm serious! I LOVE tasks of organization. Lists, plans, etc... I really enjoy setting them up. Where I generally fall apart is in the execution.
Ask my boss and colleagues, and they would all tell you that I'm very efficient and organized. Glad I've got them all fooled! Actually, when paid to do so, I can be the epitome of organization. In my personal life, however, much as I plan, I never manage to pull off the same level organization.
This time around is going to be different! Why, you ask? Because I've decided that in organizing my finances, I will actually be paying myself. Really! There's money in it! A paycheck isn't going to show up in the mail. It'll be more like found money. You know, like when you pull a fresh pair of jeans out the dryer, slip them on, then find a fiver in the pocket?
I'm convinced that by getting my act together I'm going to find all kinds of money that has been just slipping away unnoticed. Just the act of building the budget has made me more aware of what I spend. For instance, I went to Wal-Mart this morning to pick up a new pooper scooper for the cats and some snacks to enjoy during the weekend's football games. In addition to these planned items, I also came out with a new cat toy, a new carbon filter for the litterbox, and some blank compact discs to backup my computer. Mind you, these additional purchases weren't anything over the top, but they were unplanned and they do have to be subtracted from the grocery/pet category in my budget, thereby reducing the amount I have left to spend on groceries until I'm paid again. If I never actually entered these into Quicken, I'd never know the difference. I wouldn't run out of money, but I'd have a lot less left over at the end of the month to save/invest. However, since I DID enter them into Quicken, I'm far more aware of how much I have left to spend in my grocery budget and am more likely to stay within that budget. See? Organization at its best!
Now, I know I can't rely on myself to be 100% perfect on the budget every month, so I don't want to rely on having money left over to move to savings. I know myself too well. Instead, I have an automatic transfer set up to whisk a set amount from my checking account to my savings account every payday. Then, I can manually move any "leftovers" from the previous paycheck. I intend to do this for a few months to build up an emergency fund, and then I'll work more on other investments with higher rates of return.
There is also a savings concept called "snowflaking" that I read about recently on a personal finance blog that I enjoy, I've Paid for This Twice Already. The author uses the concept of snowflaking, saving "snowflakes" or little bits of money saved or earned here and there, to accumulate extra payments on her debts in an effort to eliminate those debts more quickly. Since I don't really have debt, I'm going to use the concept for saving. Once a week, I'll take these little extra bits of cash or extraneous checks and deposit them to my savings account. As they say, a penny saved is a penny earned!
I'll talk more about my snowflakes, and where they come from, as time goes by, as well as address whether I think the concept really proves effective.
Stay tuned, and thanks for reading!