Budget is No Longer a Four-Letter Word

Budgeting used to be one of those things I thought were for other people, not for me. I thought a budget was a good idea for someone who couldn't manage their money, and I was managing mine just fine on my own. Never mind the fact that I was racking up debt and overdrawing my bank account every few weeks!

When I finally realized I was out of control, I broke down and made a budget. And failed miserably at staying within it. Why? It wasn't realistic. I had no trouble organizing my fixed expenses, but I severely underestimated how much I spent on variable expenses because I was in denial. I never budgeted for my pack-a-day smoking habit, for example, because I told myself I was going to quit soon. Yet I kept buying cigarettes and wondering why my perfect (on paper) budget wasn't working.

Now that I have a bank account that helps me track expenses, it's easier to see where my money goes and budget accordingly. If I exceed my limit in a particular category, I have to decide - was the amount I set insufficient, or did I overspend? Usually I find I spent too much.

I only bring home $1075 every two weeks, or $2150 a month, after taxes, health insurance, dental, life insurance, long/short term disability, etc. My agency does not offer a match on their pathetic 403(b), so I don't contribute. My salary sucks! Still, that's what I've got until I start my second job next month.

Here's the breakdown of where my money goes:

• Car payment: $360 (accelerated to pay off sooner)
• Groceries/household stuff: $250
• Gas: $200 (I commute 500 miles a week for work)
• Roth IRA: $200
• Savings: $200
• Utilities: $150
• Restaurants: $150
• Credit card payments: $130 (debt snowball)
• AT&T: $110
• Cigarettes: $100
• Car insurance: $90
• Cable/internet: $60
• Misc./clothing/other: $150
• TOTAL: $2150/month 

You'll notice there are lots of places where I could cut expenses. The sad part is, this is my budget after making a ton of cuts already. After I've learned to maintain this budget for awhile, I'll make further changes. I really do need to quit smoking - it pains me to see that $100 being thrown away each month.

So that's what I'm working with for now, and I'll post updates every month to see how I'm doing.