Disclaimer: I am not a professional. I am the average consumer who has gone through the process of becoming debt free. This was our method, and I hope it is useful to anyone looking for “real-life” budgeting advice.
Wow – can you believe that we’re almost done? We’ve covered a lot of information in the past couple weeks and if you’ve been working alongside me, you probably have some questions. Please don’t hesitate to leave me a comment with your questions or ideas – chances are someone else has the same question too!
After Mr. Crumbs and I reviewed a month of bills and looked ahead on our calendar to see what was coming up, we realized that some purchases had no category (the one cup of coffee that we shared while window shopping at the mall) and there wasn’t much room for unplanned expenses. We were eager to see our debt numbers go down and certainly didn’t WANT to spend anything other than what we budgeted for, but we live in the real world. Inevitably, his whole office would want to go out to lunch (and saying “no” to the boss one more time wouldn’t be an option) or an out-of-town friend would need help getting to and from the airport when our gas tank was running on fumes.
Step 7 – The Unexpected
We ended up creating a category that we still use, called our “buffer,” which covers anything weird, unplanned or out of the ordinary. Doing this allowed us to cover an expense without stealing back from our savings account or skimming from a credit card payment.
This category has been wonderful for us. Sometimes we use it all, sometimes we don’t use any of it, but it allows us both freedom and fun while keeping tabs on our budget. Wait a sec – have you ever read freedom, fun and budget in the same sentence before?!
Who says you can’t have your cake and eat it too?
We’ve used this for swimming lessons, Saturday morning donuts, supporting our local coffee shop once a week, “Chipotle Fridays,” a new shirt, doctor’s visit co-pay, prescriptions… just about anything and everything! Because it can be used for anything, everything that doesn’t have its own line-item in our budget falls into this.
If your budget allows, give yourself a little wiggle room. I would start off with $20 a paycheck and see how far you can stretch it. This could be a couple rentals from RedBox, a couple gallons of gas, that “new baby” gift card for your boss’s wife, ice cream on a warm day… the possibilities are endless. This category is whatever it needs to be for you, but remember to budget this in and to limit your “wiggle” purchases to only what you budgeted for. If you spend your buffer on dinner the first night, you’re out of luck until pay day. Spend wisely (or save it wisely if you’re extra motivated!).
If you had an extra $20, what would you do with it?
Disclaimer, Part 2: I know that there are families who have made poor financial decisions, or have found themselves in a difficult financial situation – many times through no fault of their own. My posts are never intended to hurt anyone, nor will they apply to everyone. I sincerely hope that sharing my experiences will help someone. Please only take what you find helpful (if any) to aid your particular situation.
All Posts in This Series:
Step 1 – Commit to the Idea
Step 2 – Determine What’s Coming In
Step 3 – Determine What’s Going Out
Step 4 – Determine Needs vs. Wants
Step 5 – Reducing the Needs
Step 6 – Planning Ahead
Step 7 – The Unexpected
Step 8 – Doing the Bills
If I were to write a book on debt, no joke, From Debtor to Better would be it. It’s like reading my own thoughts, but with even more detail (which is kinda scary!). It covers everything debt related: discipline, budgeting, cars, mortgages, insurance just to name a few, and it is SO funny! You will literally be laughing out loud as you read the inside secrets as to how Barry Myers paid off $20,000 worth of debt in less than one year. A must read for anyone trying to get their finances under control.