I had always thought that making a budget was not a required activity for us, rather it was one of those "nice to have" things. I'm saying this because both me and hubby are very careful with our money. We spend money after careful consideration, we keep track of almost every dollar we spend by writing it into a worksheet, and at the end of the month we get a nice graph of what our monthly expenditure is looking like. So I thought making a budget was just like doing the opposite, making that graph at the start of the month rather than at the end. Last month we realized our big financial goal. Since we were saving everything towards it till now, accomplishing it left a huge gap in our savings plan. So this month we thought it would be a great idea to think about our next financial goals and how much we'll be setting aside for them each month. This required having an estimate of how we were going to spend in the coming months and that automatically led us to making a budget. Boy! Both of us were in for a big surprise.
When we came to the final figure of our monthly spending, we were really disappointed to see that it was a bit above 1 person's monthly income. BEB reacted to this by saying that there was something wrong with the budget and that we had allocated too much in the categories that don't need that much spending. My response was "Show me how!" So we prepared another budget with tighter bounds in many categories, since both of us thought that we could live with that kind of budget, we decided to keep both versions of the budget for a while. We named the second version "target budget." But this is not where it ended, when BEB saw how much we have been spending on categories like Phone, Insurance etc, he decided that he could do something about it. First of all he canceled a subscription of calling cards to India which was charging us 10$ per month just in the subscription fees. Then he helped setup skype both at my home and his home in India so that most of our communication costs to India come down. Next he took care of the auto insurance, that one is down by 30$ a month. He's also watching all the other expenses carefully for the fat that can be trimmed down.
Now, we knew that we are paying that stupid subscription fees for the India calls. We also knew that we could haggle our way to lesser insurance fees. We just never bothered enough to actually sit down and do something about them. Thats the power of budget, it shows you those low hanging fruits which can be picked with just a phone call. Whats more, hubby is super excited about all these changes we have made. After all $80 every month is something, right?
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