Budgetary Constraints
I consider myself financially responsible. I actually have a budget and try to stick to it. I have various investments, that as of late have been doing well, and I contribute to my 401(k) and maximize my company's match. I rarely ever have any kind of debt and pay off my credit card every month. However, the last few months seem to have been a different story.
Last night, I looked back on my spending for the last 6 months and came to a startling conclusion. I am spending way over my budget...almost $500 over budget! How did this happen? To figure that out, I had to do a line by line comparison of my spending.
I'm a pretty religious user of Quicken, so tracking my spending by categories and comparing to to my budget isn't too hard. I think some of that simplicity has actually made me a little complacent in terms of being more watchful of my spending. Also, up until the last few months, I had been spending below my budget and had been building a comfortable buffer. Adding to that, I've had some expenses over the last 6 months that aren't normal expenses for me (i.e. traveling for interviews, a major computer repair, tuition and books for NYU) which made me expenses look skewed.
My breakdown of my spending revealed some very interesting things. To preface, I break out my expenses into two main categories: mandatory and discretionary. Mandatory expenses include rent, utilities, my monthly subway pass, groceries, gym membership, and household items; everything else falls in the discretionary bucket. Also, to get a better idea of my spending, I excluded a bunch of atypical expenses, like the ones I mentioned above, as well as monies spent on concerts. The latter may seem strange since I go to a lot of concerts and thus should really be including them in my analysis, but for the most part, I subsidize my concert expenses with other revenues so that, if all goes well, the expenses zero out at the end of the day.
Looking at my expenses, I was happy to see that my mandatory expenses were in line with my budget. However, this shouldn't come as too much of a shock to me as most of those do not vary much month to month. The only thing that varies really is my groceries, but for the most part, those were in line with the budget. My discretionary expenses are where I'm getting killed.
My discretionary expenses are comprised mostly of expenses for: dining out, bar/alcohol money, entertainment (movies, books, music, etc.), clothing, and Netflix. The first four are the real killers. For clothing, I've been pretty good lately on not spending too much. I really don't need more clothes, but sadly a lot my clothes are too big for me now which has required me to update the closet. The bigger problems is shoes. I got a bunch of pairs of really crazy shoes in the last 6 months and that's what has made the biggest dent in my budget.
For bar/alcohol money, I was kind of surprised. I'm actually not spending too much on that anymore and am almost in line with my budget. The thing that surprised me the most, actually, was my dining out expenses; I've just been going crazy there spending, on average, almost 300% more than I had budgeted. One of the reasons for the high number is that I haven't been as diligent lately in terms of bringing my lunch to work with me. The other thing is that I've really been trying to take advantage of the great restaurants in the city, but obviously this is getting out of hand.
The other item in my discretionary expenses that surprised me is something I had never considered in my budget and that is gifts. Being in the city, I have the opportunity to be around so many of my friends which usually leads to me giving the gifts, like taking them out to dinner or drinks, either for their birthday or to celebrate something else. I have no problem with giving gifts and like being able to provide whenever possible, but I now realize that it's something that I need to budget for and also reign in a little.
So where does this all leave me? I don't know. I have to revisit my budget in the next week to tweak it and see where I can really save some money. I think I also need to look for more income sources as my current employment really isn't meeting my current needs.
Last night, I looked back on my spending for the last 6 months and came to a startling conclusion. I am spending way over my budget...almost $500 over budget! How did this happen? To figure that out, I had to do a line by line comparison of my spending.
I'm a pretty religious user of Quicken, so tracking my spending by categories and comparing to to my budget isn't too hard. I think some of that simplicity has actually made me a little complacent in terms of being more watchful of my spending. Also, up until the last few months, I had been spending below my budget and had been building a comfortable buffer. Adding to that, I've had some expenses over the last 6 months that aren't normal expenses for me (i.e. traveling for interviews, a major computer repair, tuition and books for NYU) which made me expenses look skewed.
My breakdown of my spending revealed some very interesting things. To preface, I break out my expenses into two main categories: mandatory and discretionary. Mandatory expenses include rent, utilities, my monthly subway pass, groceries, gym membership, and household items; everything else falls in the discretionary bucket. Also, to get a better idea of my spending, I excluded a bunch of atypical expenses, like the ones I mentioned above, as well as monies spent on concerts. The latter may seem strange since I go to a lot of concerts and thus should really be including them in my analysis, but for the most part, I subsidize my concert expenses with other revenues so that, if all goes well, the expenses zero out at the end of the day.
Looking at my expenses, I was happy to see that my mandatory expenses were in line with my budget. However, this shouldn't come as too much of a shock to me as most of those do not vary much month to month. The only thing that varies really is my groceries, but for the most part, those were in line with the budget. My discretionary expenses are where I'm getting killed.
My discretionary expenses are comprised mostly of expenses for: dining out, bar/alcohol money, entertainment (movies, books, music, etc.), clothing, and Netflix. The first four are the real killers. For clothing, I've been pretty good lately on not spending too much. I really don't need more clothes, but sadly a lot my clothes are too big for me now which has required me to update the closet. The bigger problems is shoes. I got a bunch of pairs of really crazy shoes in the last 6 months and that's what has made the biggest dent in my budget.
For bar/alcohol money, I was kind of surprised. I'm actually not spending too much on that anymore and am almost in line with my budget. The thing that surprised me the most, actually, was my dining out expenses; I've just been going crazy there spending, on average, almost 300% more than I had budgeted. One of the reasons for the high number is that I haven't been as diligent lately in terms of bringing my lunch to work with me. The other thing is that I've really been trying to take advantage of the great restaurants in the city, but obviously this is getting out of hand.
The other item in my discretionary expenses that surprised me is something I had never considered in my budget and that is gifts. Being in the city, I have the opportunity to be around so many of my friends which usually leads to me giving the gifts, like taking them out to dinner or drinks, either for their birthday or to celebrate something else. I have no problem with giving gifts and like being able to provide whenever possible, but I now realize that it's something that I need to budget for and also reign in a little.
So where does this all leave me? I don't know. I have to revisit my budget in the next week to tweak it and see where I can really save some money. I think I also need to look for more income sources as my current employment really isn't meeting my current needs.
posted by E at 12:00 PM
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