Fabulous Financials

Many personal finance gurus say your basic budget should look like this:

Savings - 20%
Bills/Needs - 50%
Fun - 30%

That breakdown is so simple.  It should be pretty easy to follow, right? Wrong!

Lately, my expenditures have been looking like this:

Savings - 10%
Bills/Needs - 40%
Fun - 50%

I blame it on the Goose! LOL

In the past few weeks, my spending has increased significantly.  Why?  *shrug*  I always track my spending so I knew where my money was going, but I wasn’t paying attention to my money.  The difference?  I dutifully kept my receipts and updated my spreadsheet at least once per week.  But tracking my money doesn’t mean a thing if I don’t use the information to prompt action when I notice that I am overspending.

Instead, I watched the fun category triple what it should have been.  As long as I wasn’t incurring debt, I justified the expense in my head and convinced myself that it was acceptable.   Now don’t get me wrong - staying out of debt is great - and so is having fun!  Oh boy, fun can not begin to describe my life over the past few weeks. Whew!  But I needed to remind myself that all good things are acceptable in moderation.  If I continued down that slippery slope, I may have found myself in a ton of trouble.

So what did I do?

I had to redistribute my cash flow and give myself a reality check.  Now, my budget spend plan looks more like this:

Savings - 30%
Bills & Needs (long/short term) - 60%
Fun - 10%

Savings: I was getting lax with my savings.  I’d already reached my goals and I had nothing else to keep me motivated, so I began to spend the surplus. Wait!  *pump the breaks*  There’s always a reason to save!  I mean, how long have I been dreaming about going to Paris?  Yea, umm…let’s just say I am recommitted to saving/investing 30% of my net income, in addition to maxing out retirement accounts.  No more ’save some through payroll’ then ’save a little more’ at the end of the month. Nope!  I don’t trust myself, so I’m putting ALL of it on automatic allotment!

Fun: This is where all the overflow went.   Whenever one of my friends would say “Hey, let’s go ____!” I’d be the first person responding to the email.  Dining out became a natural occurrence.  Taking weekend trips with unplanned expenses was the second runner up.  And the biggest problem - being punked by BabyGirl when she did something exceptional at school.  What can I say?  I’m a sucker for a couple of As and a few awards.

In an attempt to pull in the reins, I consolidated and reduced my ‘fun’ elements from 8 to 4: personal pampering, dining out, entertainment, and shopping.  Fewer categories to track make it easier to manage.  And beginning July 1st, I am giving myself a monthly allowance to spend guilt free.  Shoot, I may even try a cash only system! We’ll see about that part…

Do you follow the basic budget formula (or some variation)?

Have you ever noticed your spending get out of hand before it hurt you financially?  What did you do?