Judgement Day: Did My March Budget Work?

[Day in the Life: Lunch Money by emdot]

Back on February 23, I set a goal for March: stick to an approximately $1000 budget, with a specific spending limit in each of my major budget categories. Last week, I was close to or over my budget in every category, but still clinging to my budget and under budget overall. By March 23, I was definitely playing chicken with the grocery store.

My complete March Budget:
Rent $625
Food $ 97.41
Wardrobe $ 75
Books $ 0, or $17.43 if I finish all my to-be-read books
Entertainment $21.45
Spa Treatments $80 (a decided luxury, but for now it's staying)
Prescriptions $40
Miscellaneous $100

Total $1038.86

Did I make it?

Almost.

Food was the most challenging category. I depleted most of my staples and dug into the long-forgotten reaches of my cupboards and freezer. Last week, I spent $3.00 of my remaining $5.00 on vegetables. I then bought some milk for Dear R., depleting my last two dollars.

On March 29, I broke my budget by spending $25.00 on dinner for R. and I.

Why? Convenience. Exhaustion. Lack of cheaper restaurants open within walking distance. The knowledge that I didn't have anything very appealing at home--after a rather rough day, a cobbled-together meal of my last fish filet, steamed broccoli, and eggs didn't sound very appealing.

Our restaurant meal was good. Was it worth the $25? Probably not. I ate out a total of four times this month, and three of those times my hunger could have been just as well satisfied by some good quick home-cooked comfort food.

Wardrobe: I spent $38.00 on a pants-spree at thrift stores early in the month. It wasn't too challenging to stick to the budget in this category--partially because I bought tons of new clothes in November/December!

Books: I've recently become very aware of my information overload. I subscribe to about 125 blogs and read several books a week. I have a few dozen to-be-read books sitting on my mantel, creating a certain mental pressure to "work through" them. I wasn't at all tempted to buy any new books this month. Instead, I read several of the books I own but had never read and tried to limit the number of new books I checked out from the library.

Entertainment: I paid for our Netflix rental and bought a few VHS tapes at Sally Army. I didn't feel any real need to spend more on entertainment. I did go to the ballet--I bought the ticket last month. Most of my entertainment came from blogging, talking to friends and family, and watching addictive TV available on-demand on the Internet (Nothing But The Truth, lonelygirl15).

Waxing: One dollar under budget!

Prescriptions: $45, 5 dollars over budget because I failed to take into account my increased copay.

Miscellaneous: $60 on tax software for a challenging tax year. $10 on a birthday gift. $30 on a doctor's visit.

Utilities: The stealth category that smashed my budget. Our gas bill this month was $194.25.

Total spending for March: $1228.89

Lessons learned:
- It's worthwhile to spend a little extra on groceries in order to always have something appealing in the house. $5 of cheese or meat could have saved me that $25 restaurant meal.
- It's time to start budgeting for utilities. For several months, R. was covering our utilities because I'd paid for some major purchases in the past and he was "in debt" to me. That golden time is past.
- I'm surprisingly okay with not spending much on entertainment. I thought this would be a major challenge, but it turns out I have little need for a life!
- Miscellaneous expenses are often predictable. If I'd planned ahead, I could have anticipated all three of my miscellaneous expenses (and possibly saved a little on the tax software).

My next budget challenge:
I'm going to continue my all-time lows challenge, but in April I'll leave the update on my budget and spending until the end of the month. I have a new obsession with investing--terms like "correlation" and "asset allocation" are thrilling the heck out of me. Sometime soon, I'll talk about how I suddenly got interested in this stuff and how I'm planning to apply it. I also have a couple of ideas for ongoing series up my sleeve, which I'll launch when I come up with the right posts to start them off.

Keep up to date with Working for Rachel in April and beyond by subscribing to my feed.

All-Time Lows

In order to meet my retirement goal, I need to cut my spending by about $400 a month. When I look at the numbers, it seems like it should be possible. I have very few fixed expenses, yet every month I'm mystified by how I manage to spend so much. I tell myself things like, "I won't spend anything on entertainment this month," or "I'm going to eat out as little as possible," but these vague restrictions don't seem to do anything to make my spending fall.

A few nights ago I was playing around with my Excel spreadsheets and decided to graph how much I'm spending by category. For example (click graph to enlarge):



You'll notice there's a big difference between the highest month, average months, and the lowest month. In every category, there's been at least a month or two when I've spent very little. If I can manage it in those months, why not every month?

So for the next few months, I'm going to try to beat my all-time lows in several categories. When I beat an all-time low, the amount I spend that month will become my new all-time low.

The numbers to beat are:

Food (including groceries and eating out)....$97.41
Should be possible. I used to spend $80 a month on groceries when I lived alone, and I was shopping at a more expensive store back then. My grocery bill now includes my boyfriend R, but doesn't include his lunches out or the frequent gifts of food his dad brings over. With almost a hundred dollars, I may even be able to splurge on a hamburger or two!

Wardrobe....$75
The actual low in this category is $0. Given my recent track record, that's expecting a lot. In addition, I have a sort of urgent need for new pants as I've been losing weight and all my old pants are hanging off me. I'll allow myself $75, to be spent only in thrift stores. I'm anticipating losing more weight, so better to buy a few "disposable" pairs at thrift shop prices until I get to my permanent weight.

Books.....$0, or $17.43
In the previous post, I challenged myself to not buy *any* new books until I've read all the ones I already have. I'm sticking to that. For the record, or in case I unexpectedly plow through all my books, the all-time low to beat is $17.35.

Entertainment...$21.45
This'll be tough. Netflix costs $15.33 per month, and that's not going anywhere, which leaves me with only $6.00 to play with. I've been treating myself to the ballet and the opera lately, obviously not possible on a $6.00 budget. Guess I'll hit free museums, gallery openings, and author readings instead--but not buy the books.

Miscellaneous...$100
In my budget, miscellaneous includes any category that I don't spend in every month, such as recreational travel, office supplies, household, makeup, and gifts. In January 2008, I spent $45.70 on all these things. That was freakishly low--my average is closer to $200. Since just one printer cartridge could make short work of a $40 budget, I'm going to give myself a little leeway for March and budget $100. If that's easy, I'll bring it down to the ATL in April.

March Budget Based on All-Time Lows

Rent $625
Food $ 97.41
Wardrobe $ 75
Books $ 0, or $17.43 if I finish all my to-be-read books
Entertainment $21.45
Spa Treatments $80 (a decided luxury, but for now it's staying)
Prescriptions $40
Miscellaneous $100

Total $1038.86

You'll notice a few important budget categories missing. R. and I split our joint expenses evenly, but we pay different categories, so I don't usually pay for electric, gas, or Internet. We track this and when it ends up uneven, he'll pay something towards the grocery bill or I'll pay for his half of a dinner out. It works well so far.