Expense after crazy expense keeps pouring in. I’m having a heck of a time staying on budget, not good during the summer when power and water costs run very high. My microbudgeting scheme, whereby I break a month’s budget into four roughly week-long periods, is feeling the strain. The ticket for blowing through a photo-speed trap at 45 mph on a seven-lane highway threatened to break the camel’s back. Faced with a week without enough cash left to buy groceries, I came up with a little strategy that may represent a real, permanent refinement on the microbudget.
Each month-long budget represents an American Express cycle, since I charge almost all my expenses and then pay off the bill at the end of the month. Dedicating $1,200 to cover all costs except regularly recurring monthly bills such as utilities, I allocate $300 to each of four “weeks” within each monthly cycle. If I can stay in the black for all four of these microbudgets, bully for me. If not, I can see at a glance when I’m slipping into the red and put the brakes on before it’s too late. Thus if I overspend in one week and underspend by the same amount or more the following week, I stay on budget without having to pinch pennies for the entire remainder of the month.
Last month I ran up a series of expenses, some of them unexpected: the chair from Pier One, the gutter installation, a forgotten air-conditioning bill, the surprise Costco membership renewal, the pool repair bill, the cost of three locksmith visits after the painter couldn’t figure out how to get the lock off the door he was refinishing, the speed trap ticket, and, more recently, the cost of the bargain landscaping bricks. Last month I ran $253 dollars over budget, and that was without the speed trap ticket, which got charged against this month’s AMEX bill. It was also after The Copyeditor’s Desk reimbursed me over $800 for costs related to the business.
Charging the $188 speed trap gotcha against the first week of this week’s $300 microbudget wouldn’t leave enough to buy gasoline and groceries. Even riding the train to campus, I can’t do without gas: I have to drive to the train stop. And by the end of last month, I needed to replenish the larder.
It occurred to me that if I divided the speed trap ticket by four and spread the cost over the month’s four microbudgets, it might leave enough in each week to buy necessities. The effect is to cut each microbudget by a relatively small amount but leave plenty to live on in each week.
In theory, it should work. In practice, the cost of the bricks (which included $18.68 worth of sales tax) overran the first week’s microbudget by $206.16. However, when that amount is subtracted from this week’s cycle, I’m still left $46.84 in the black.
Forty-six bucks will be enough to buy my lunch and my exiting RA’s (at our office, the boss traditionally buys lunch for an employee who’s leaving…and the university doesn’t reimburse any expenses related to food). Since I restocked food and filled the gas tank last week, I shouldn’t have to buy anything else this week. That will leave $253 to diddle away next week.
What happens if you spread all extraordinary costs over the month, instead of just a single unexpected large bill?
If I divided the $243.68 bill for the bricks in four, to get $60.92, and subtracted that amount from each week’s microbudget, the result would look like this:
The result is much more positive psychologically: now I’m only $23 in the red at the end of the first week, and instead of barely enough to get by in the second week, I’m left with a relatively generous $168 budget.
Is this a more realistic way of looking at monthly spending? It may be. It’s telling us that there’s plenty left for this month in spite of two extraordinary expenses. On the other hand, knowing that might lead the budgeter to relax her spending habits, which really could run the overall budget into the red.