Thursday, January 17, 2013

Re-budgeting Myself, Part 2

After evaluating all my expenses in my last post, this is what I've come up with for my actual monthly budget (sans rent, utilities, and subscriptions like Netflix, which are the same constant amount every month):

Groceries: $120
This will include food, of course, but also general household supplies and hygiene items. I think I'm actually over-budgeting here- I can't really see spending more than $25 per week, but I'll give it a try this way for a couple months and then possibly reduce.

Transportation: $100
This includes the cost of bus tickets and also my use of Zipcar. I'm curious to see if I'm over-budgeting here too. It depends on my motivation- if I keep up with biking on the days when I have simple commutes, and don't need to use a car at all, costs automatically reduce...

Entertainment/Incidentals: $40
This includes going out to dinner (striving to do this two times a month at most), to movies, going to coffee shops for internet, and any shopping I do that isn't in the grocery category.

Total: $250

I'm not including in my budget any medical expenses, which are relatively unpredictable, or things like textbooks for school, which are necessary but only occur every few months. I'm also not including any out-of-town travel, which is fairly rare anyway and will have to be evaluated on a separate basis. This budget is just for those things that I purchase very regularly.

The majority of my spending on transportation will go on my credit card, to keep my credit rolling, and because that is the only way to pay for Zipcar. I'm going to try to use a cash system for all of the grocery money and entertainment money. I did this before, a few years ago, and it worked really well. Plus research backs me up- you're much less likely to spend cash than you are to put something on a card. I don't know if I'll take all $160 out of the bank at once, or if I'll take $80 out every two weeks- I'll play that by ear and see what works best.

I'm planning to implement this whole deal starting February 1st, and begin tracking the results of each category in a ledger (I have a mostly-unused one floating around anyway). Any money left over at the end of the month I will put into my savings account, or else keep to save up for a particular item (something that pops into my mind is a candy thermometer and kitchen scales to complete my outfitting for soapmaking).

In addition to my regular spending, I have my student loans to think about, and also some personal debts. I took a small loan from a friend to help with moving costs, and I owe Matt some money for utilities, upkeep of the animals ("chicken support") and a few other things. I have been making payments on my unsubsidized loans here and there, to work down the interest, but I would like to be able to pay a constant amount every month. I would like to put a chunk into savings each month too, but on my small income I'm not sure how much will be feasible right now. The main reason I need to think about saving is because after I graduate (and a short grace period), I will have a large required student loan payment every month. Hopefully around that time I will also have a bigger income, but that remains to be seen.

How do you budget? I'm curious to hear more about how other people do it. The just "trying not to spend much" hasn't worked for me, which is why I'm trying to give myself some structure. What works for you?

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