Since May, when I set some new career-life goals, I realized I needed to whip our budget into shape. I wanted to focus on saving more, spending less, and attacking our debt more aggressively. So, I started a budget, again, for probably the 100th time in my adult life. However, this time around, for the most part, it has stuck and I have been consistently budgeting and tracking away. I say I, instead of we, as money management is typically my responsibility, however we do make most financial decisions together. Right, Matt?!
Our Budget Method
I use a modified version of the Zero Sum method. The main modification being that instead of budgeting monthly, I budget pay period to pay period (every two weeks) as I’ve found, for me personally, working in smaller chunks is less overwhelming and easier to stick with. At the start of a pay period I allocate money (bills, savings, etc.) and I leave a little buffer amount in for unexpected expenses. Once the next pay period rolls around I take whatever is left over and transfer it directly to a debt. It’s usually not much, but I take pleasure in chipping away any extra that I can.
More Money, More Problems
A few days ago I noticed my buffer amount was higher than usual. After double checking my math and making sure everything was paid or accounted for, my heart did a little dance. I celebrated the fact that budgeting was finally paying off with some excess funds! It works!
At this point there were about five days until the next pay period (when I would transfer the excess to a debt and start fresh) so I just let the money sit in our account. Then guess what happened? Can you guess? I started to get loose. I bought lunch at work a few times. I started browsing online for shoes and running watches and things that I want, but definitely don’t need. I found myself headed down a slippery slope of spending.
Semi-panicked at the thought of spending away the buffer amount that made me so happy to begin with, I acted fast. I logged into our bank account and transferred the money a few days early. Moving the money provided instant relief as I no longer had the option to spend it.
Has this ever happened to you? Have you let excess funds lead to excess spending?