Back on track, today, after several personal delays, we are back to the Weekly Budget Ronin Financial Showdown. Setting the calendar reminder was a big help, too. Today's episode is...
Showdown!
Budget Ronin vs. the Spectre of Spending!
"Don't be distracted, Ronin! Let your aim be true!"
I put the last sum of credit card money into the debt repayment system today. I authorized CCCS to make the final disbursement on my behalf and I just need to follow up to make sure the credit card company gets it in a few days. I can't even begin to tell you what a relief that is. But with the big refunds in the mail, I do feel like we can breathe a bit easier. It doesn't feel so bad.
There, my friends, is the challenge. It does not _FEEL_ bad, but it is not necessarily good. It is not as if Budget Naginata and I have a great deal of money saved. Should we run into an unexpected car expense, we still do not have the means to fix it yet. While planning to pay off the car and starting some significant savings sounds like a great idea, I think the sudden rush of money feels very intoxicating. I'm looking at things and thinking to myself: "Wow. In a couple of months I could buy that no problem."
It occurred to me today that this is exactly the kind of thinking that got us in trouble in the first place. I don't think we'll rush into getting credit cards so quickly this time, we have plenty of credit building power from our house, a large school loan and paying off some miscellaneous collections. I may consider getting a single gas credit card to put our gas expenditures on that we can pay off in full each month, but right now I'm more concerned with paying off the car and fixing up our broken things.
But no single monthly paycheck is going to cover all of this, so we need to look at our newfound income and split it up into discrete sums that we can use to further our goals. I've done some reading online (original authors forgive me, I've forgotten exactly where), but most budget blogs/financial specialists I've studied break it up into percentages of your total income. Here's a couple I remember:
Plan A: 60% living expenses, 20% investing, 20% savings.
Plan B: 60% living expenses, 10% investing, 10% long term savings, 10% short-term/fun money. (I know I'm missing 10% here, but that's what I honestly recall).
I think you get my intentions here. I'm looking at what we spend against what we should save for (retirement and investments) and would still like to factor in some fun. So the question I ask you faithful readers is this... what percentages would/do you chose for your budget? I've got some ideas, but I need to talk it over with Naginata.
Ideally, I'd love to get our living expenses down to 50% of my income, but I'm assuming 60% is more realistic. With the remaining 40%, I wonder what I would feel comfortable allocating to Savings, Investment, Charity, and Fun? Do I make it an even split? Do I weight one over the other?
This is my big conundrum for the day.
[Note: Now it's Monday, the 15th.]
Still my conundrum, a few days later. Dang, I almost had it all done on time, too. I probably just should have posted as is/was. I have more to talk about, but I'm totally not with it right now. Sorry for the late Showdown posting.
More debt-free than ever before!
B.R.
[10.16.07 edit: There's a line above that got spell-checked into nonsense, so I substituted something that sort of made sense to me now.]
4 comments:
I would go with plan B just cuz you'd have some $ to do fun things or splurge a little bit, ya know? That's just how I roll up in this piece.
I'm inclined to do something that has a built-in fund for fun. I am just not sure on the final percentages.
In plan B, you're missing 10% short term savings. I don't remember exactly why you are supposed to separate long and short term savings though.
One of the problems I have with all these systems when I read about them is defining "fun" vs "living" expenses. Would you call cable tv, for example, fun because you don't really need tv? Or a living expense because it's something you've chosen to make part of your lifestyle? Do the first 2 pairs of shoes go under living expenses and any more go under fun? And so on...and I guess if you're separating out fun you can't use savings for vacations, etc?
I think "fun" is necessary to living so...maybe I would lump fun and living in together and make that section bigger.
Not like I'll manage to budget anytime soon ANYWAY.
Good points, B.Sakura. I think "living" expenses are pretty much anything that you consider part of your monthly/yearly budget. It's true you don't NEED cable/satellite television to survive, but we opt to have it, so it's part of our normal expendatures. At some point we may opt to change that, but for now, it's just like the cell phones and the gas bill. I think a similar rule applies for shoes, clothes, etc. I think as long as the need is justified (a pair of shoes for work, another for leisure), it should be considered a living expense and perhaps we make sure to add in a certain slush amount to make sure those expenses are met in the bulk of our living cost. "Fun" stuff would be movies or Guitar Hero 3 or a cute jacket that just happens to go with a cute skirt. That's my take.
Thanks for the input!
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