Funny about Money

The only thing necessary for the triumph of evil is for good men to do nothing. ―Edmund Burke

Budget Micro-smugness

Yes. Feeling somewhat smug (!) about the new cash-card “envelope” method, which for reasons not altogether clear is working like a proverbial charm. There’s so much psychology involved in the budgeting game that one sometimes feels like one is pulling one over on oneself.

As you may recall, the cash-card envelope scheme entails not using a credit or debit card at Costco, the Empire of Impulse Buys. A substantial part of the stuff that stocks my household and feeds me and the dawgs comes from that budget-gobbling place, so I’m not staying away. But if this business of having to take the annual RMD (required minimum drawdown) from savings a month or two earlier than the prior year is to stop, then a grip must be gotten on the spending!

Since most of the spending happens at Impulse Buy Hell, that’s where the grip must start. So the idea was to figure how much could sanely be spent at Costco in a given month — and also budget a set amount for gasoline, which also comes from Costco because it’s the cheapest supplier in my part of the Valley.

We have monthly allotments of $60 for gasoline and $300 (or less, if possible) for general purchases.

And amazingly: so far this budget is working just about right. Come the end of last month, I had $30 left on the gas card and $4.67 on the general purchases card. That was after spending $90 on a giant bucket of pool chlorine tabs.

We’re now more than halfway through August. I don’t expect to need any Costco items between now and the 31st — all the meat and dog food makings are in hand, all the household products stocked up. Awesome. As of August 15, the gas tank was full and $30 remained on the gasoline card.

Since there’s no way I’ll drive enough to run the car out of gas between now and September 1, that means the gas card may very well have enough cash to buy next month’s allotment of gasoline. All of it. If that’s the case, then the amount slated to be moved out of checking to the gas card for September gasoline can instead be moved to emergency savings. Yes!

Meanwhile, as of  August 15, $17.16 remained on the “general purposes” Costco cash card. On August 17, its balance was $29.44. Later the same day it held $20.66. Yes: three bucks more than it contained two days before. 😀

How, you ask did this sleight of hand occur?

Through the magic of returned merchandise, that’s how!

I’d bought a box of LED lighbulbs that promised “vivid” wonderful glorious light and 15,000 hours of burning time. Well…they were vivid, all right: vivid BLUE! Ugh!!!!!

So I dragged the things back — $12 back on the card.

Meanwhile, running low a few days earlier on the cheddar cheese I normally buy at CC, I’d bought a couple chunks of fancy stuff at a Whole Foods, hoping to avoid another trip to the Queen of Impulse Buys. It was expensive stuff — not as expensive as it would’ve been before Amazon engrossed WF, but pricey. But it looked good, aged and fancy and all that. Next morning when I sliced off a piece to go with breakfast, I found it absolutely flavorless!

Jeez. If I’d wanted flavorless cheese, guys, I’d have bought Kraft. So I schlepped back to Whole Foods and got ten bucks back for that return. Then during the same trip to Costco that clawed back the 12 bucks for the neon blue lightbulbs, I picked up a chunk of their excellent cheddar cheese (which will easily last till the end of the month and then some), plus the blueberries and the tomatoes I’d forgotten during the previous week’s actual shopping trip. Spent less on the cheese and produce than the bulbs had cost, so I ended up with a net increase in the budget’s bottom line.

{Cackle!}

It’s highly unlikely that I’ll need to buy anything more at Costco for the rest of this month . But if I do, it surely will not run more than twenty bucks. Money is budgeted for regular grocery-store purchases, so if I need any other food or household items, that’s where they’ll come from. But in fact nothing like that is needed just now, so I expect precious little buying in those precincts.

An amazing $297.50 remains in the month’s budget — and that’s after all the regular bills (power, water, Medigap and on and on and on) are accounted for. In other words, we have almost $300 to cover the next 13 days, during which no incidental purchases should be needed! That’s assuming no emergencies occur.

With any luck, then, if nothing happens between now and the end of the month, I should have almost three hundred buckolas to transfer over to emergency savings on August 31. And that’s in one of the highest-cost months of the year.

Since over the past year or so I’ve been consistently overspending available funds — and running out a month or two before the RMD was scheduled, forcing an early drawdown — that suggests that the “envelope method” works.

It may, indeed, work Big Time…

Author: funny

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2 Comments

  1. Budgeting is all about tricking yourself – so whatever works!

    When we were in college, my friend was working full time in the summer – for the first time, she had money coming in. The purpose of working was to be saving up for the next year of school – but after a few weeks she confided that she found herself spending FAR more than she should be – she would go to the ATM to pull out $20 – and she would see ALL THAT MONEY in her account – and feel ok with pulling out $40 or $60 instead.

    I suggested that she open another bank account – one NOT connected to the ATM – and put her paycheques into that account – so that she didn’t SEE the money.

    Her response? “You can have more than one bank account?”

    The very next day she not only opened another account – she opened it at another bank – a credit union. From that point, her paycheques were deposited into that account, and she would withdraw ONLY what she meant to spend and put it into the account linked to her bank card.

    I do the same thing now, 25 years later – an online bank has automatic transactions set up to whisk money OUT of my checking account the day after my paycheck hits, and secretes it away into various accounts for property taxes, etc.

    • It really is weird how the perception that a chunk of dough is just sitting there in the bank alters your sense of how much is OK to spend. When you see a $1200 paycheck in the online list of deposits and withdrawals, you think “ohhh I can afford THAT!” for whatever whim strikes your fancy. Trouble is, if you put $50 on a charge card, you don’t see it as a debit for several weeks (until the statement arrives) and you forget that now you don’t really have $1200, you REALLY have $1150.

      The fact that charge-card debits don’t show up as debits in your checking account helps you to push those to the back of your mind. So when you see that $1200 figure, it feels like you have more than you do. And there’s also the fact that $40 here and $30 there and even $60 somewhere else may seem so incidental you forget about them or discount them as not very significant.

      Possibly that’s why it helps to set things up so you “see” less money as “available” than is really sitting there in the account. That smaller figure may be more realistic — a more accurate representation of what you can reasonably spend on x, y, or z.

      Great idea to get that incoming cash OUT of the account you use to pay the bills from. Any way you look at it, these strategies amount to variations on the “envelope” theme.