I netted out about ~$14,000.00. I was hoping to net ~$18,000.00, but I’ll take it. I can genuinely say that my Save-O-Meter, FSA and 401K totals that $14K, so I think I’ve accurately hit my personal goals for 2006, despite going over budget.
I drafted up a recap of 2006 with some goals for 2007, but now I see I’ll have to revise my goals for 2007 based on a new budget plan. I have to be realistic about what fits into my budget in terms of savings. (Oh wait. I think I’ve just written my dream goals…)
I suck at sticking to a budget. I really do. I don’t track every nickel and dime accurately especially when it comes to dining out and items paid with cash. But I can definitely see that I benefit from budgeting by being able to do a quick and dirty analysis.
Even if you blow your budget, make one anyway. It’s a navigational guide for your spending and saving, but don’t cry if you miss your turn. Just regroup by revising your budget to be more realistic, and get back on the proper route. Knowing what I might spend or have spent in the past allows for me to make adjustments. Another surprise was that my vacation travel, i.e. all those weddings, was overbudget by ~$300.00, the cross-country airfare of one wedding. If I hadn’t budgeted my whole year, I never would have foreseen that I had to cut my personal vacation to pay for those wedding trips. You regroup. You adjust. Even if you are damned lazy like I am.
How lazy am I? I probably only look at a budget report once a quarter. Quicken lets me see a montly income/expense graph when I log in. However, it’s pretty skewed due to quirks in my graph settings, based on accounts and budget categories to include. It’s messed up and I don’t think about it that much. I literally just count which months I haven’t spent more than I earned. (For the record, on the small graph it’s 8. On the full graph, it’s 9. See what I mean about it being kind of screwy?)
Quick digression: Most PFBloggers probably don’t have formal accounting training or work in accounting. (I should probably figure out how to do a poll. If you want, please comment with a yea or nay.) I would encourage everyone to take a basic college-level financial accounting class for a few reasons. A) You’ll learn how to make an income statement and a balance sheet, which is really all you’re doing for yourself when you prepare your net worth statements or budgets. It’ll make numbers less scary. B) You’d be surprised at how much money executive education programs make by teaching financial analysis to non-finance managers. It’s a marketable skill for your resume. C) You don’t have to major in it or be a CPA, just one single 101 course. I took mine after I graduated from college and found myself doing lots of accounting stuff at work. D) And it’ll help you see the importance of budgeting and why companies do it, even if you don’t do it for yourself.
Budgeting does not exist to set you up for failure. I don’t feel like I failed even though I missed my budget. Not at all. I am proud that even though I overspent, I hit two important savings goals I set for myself.
Please let me know if you don’t have a budget and if you’re going to try one for 2007. It’s a pretty good new year’s resolution if you don’t have one already and semantically, note that I wrote ‘TRY’, not ’stick to’. It’s an evolutionary process, which reminds me to ask Madame X, how long have you been budgeting and how do you get such budgeting perfection?
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{ 7 comments… read them below or add one }
i just started budgeting a month ago and i look it and i’ve come close to blowing the grocery category … too much baking and new recipes that need ingredients i dont have.
and i did take a financial accounting course in college before i dropped the business minor. it was a really fun and eye opening class that taught me to balance my checkbook.
btw, i was reading the Washington Post this morning, the white bean chili recipe and i saw a comment from “mapgirl,” that wouldn’t happen to be you would it?
I need to hire you to audit my 2006 spending, you did a great job on these posts.
I took accounting 201 and 202, plus some business/tort law classes in school. Pretty useful stuff, I would recommend these classes to everyone.
SFMM – Yes, that was me. I hope I didn’t sound too mean. But she totally misunderstands the baseball metaphor. I was completely confused by it because how can she bat 1.000 and still not have her ingredients?!?!
Bro – heh. You said ‘audit’. Professionally, I have done audit and forensic accounting work, but no really, I’m an Oracle programmer!!
I only took a full year of accounting in high school, but I love this type of stuff. I get it from my mother who’s done bookkeeping most of her life.
I wish I had gone for a business degree in college, and I’ve thought about getting a Master’s in Accounting, but it’d run me about $30,000 and I already have school loans of more than that for my undergrad and Master’s degree.
mapgirl-
you didn’t sound too mean. it only makes sense to point out the writer’s blunder.
i got to excited for a moment when I saw your alias on the comments section because i know your blog and identify the alias with the blog. or something like that. just a small world net connection for a second.
Hi unni,
Um… so I am having a bit of a dilemma and you were the first blogger who came to mind… my situation is posted here
http://fiscalresponsibility.blogspot.com/2006/12/when-to-pick-up-check.html
it is an etiquette related question. I guess you have done many posts on presents for the hostess, etc. that I thought maybe you’d have a good suggestion for me.
I can’t believe your year overview! You are so detailed! I envy you (I am more of the ideas and operational strategies person)!!!!!!!
I don’t budget. I compute my spending each month based on the difference between income received and increase in net worth. In 2006 I spent around $25k in total. Net worth increased by almost four times that so just don’t see the need to budget as I am managing not to spend too much anyway. I did record expenditures when I was an undergrad student and had to keep a very tight lid on spending. I think it can be a useful tool to start to build net worth but after a point the discipline maybe gets inbuilt in ones behavior.