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| These roses have nothing to do with this topic, but I wanted to show them to you, anyway. I cut both of these in early December, just before the cold weather began. |
I do this, without fail, every year, in the first week of January. Sometimes, it brings good news. Sometimes, it illuminates areas where I need to work harder. And sometimes it shows me that life can be full of storms.
One afternoon last week, I sat down with our budgets. Evaluating the budget requires a couple of hours. I look at each category, and check to see if we put aside enough money every month to cover each of the bills for their category. Then I make adjustments to the dollar amount in the various categories, according to their need.
I value this activity for a couple of reasons. After a month of holiday splurges, inspecting the budget refocuses my thoughts on sensible spending. And it serves as a reminder for those areas that I had planned on seeking to reduce spending. It's also a motivational tool. It shows me where we are doing this whole budget thing very right. I like to give myself a pat on the back, an "atta girl", for working so hard, year round, to squeeze a little more buying power out of every dollar. And then, of course, it serves as a tool for determining how much we need to adjust our tax withholding for the new year.
At the end of the afternoon, I have reset our new budget for the year, made changes to tax withholding and established new savings and preparedness goals for our budget.
So, how'd we do this year?
Most of the categories in our budget will remain unchanged, as we are on target with our setting aside funds for those areas.
In electricity, we have been slightly over-saving. Yay! I was able to cut that area down, by a few dollars per month, in 2017.
Our emergency savings, which would be used in the case of job loss, continues to grow, monthly. I never let a month lapse without putting something into that fund, even if it's only $3. $3 each month, for one year, results in $36. In 10 years, that $3 per month results in $360. While I try to put more into that fund, I don't consider $3 to be trivial. We began this particular savings fund in 2008. You all remember how unstable everything felt in 2008 and 2009, right? That was the impetus for this savings fund.
Heating -- we're doing well, as winter unfolds. We are spending a little into the surplus, set aside the previous year. We will hopefully end this heating season with another surplus.
For 2017, I have a new goal for our heating budget. We will attempt to set aside enough in savings to cover a complete winter's heating, in advance of the coming winter. In normal years, we have some surplus, monies put aside in the warmer months, combined with our monthly allocation in every month of the year. What I am working towards is a surplus that is large enough going into the heating season, with or without monthly allocations during the heating season, to feasibly pay all of our heating for one season.
This surplus heating budget will function much like our stockpile of groceries. It will cover us, in the event of a job loss or severe financial circumstances. Heat and food are the two recurring expenses which are vital to survival. (Our home is paid for. Otherwise, housing would be the third recurring expense, vital to survival.) So, we will set aside a small amount extra, each month, from now until November, and see how we do. Much will depend on how cold of a winter this one proves to be.
The main area in which I have been wanting to reduce some of our spending is the non-food grocery and household expenses, things like hygiene items, cleaning supplies, lightbulbs, batteries, postage stamps, kitchen items like plastic wrap and aluminum foil. You know that I don't buy a whole lot of those items, anyway. But I have been meaning to work at finding less expensive alternatives to the products that I already purchase. This goal pops up every single January. I hate that we spend so much on this category. Item by item, I am slowly (very slowly) finding new ways to buy the same or similar products.
A year ago, I discovered Cash & Carry's store brand of freezer bags. They're a better quality than Dollar Tree's freezer bags, so they can be reused a few times, each. And they're cheaper. Automatic dish detergent is another product on my list. I was close to being out of the Dollar Tree stuff, and our local DT store and their online store were out of stock of what I had been using from them. So, last month, I bought a box of Kroger dish detergent powder, using my Senior Discount. I paid less per ounce for the Kroger stuff (compared to Sun brand at DT). I'll see how it performs later this month.
I have significantly reduced my use of postage stamps, by using online, phone and auto-payment plans for everything from tuition payments to the garbage pickup service. It's only a little bit of savings. But several little bits add up to one large bit, over time.
So, the non-food grocery and household expenses category is one of my areas of focus, for this coming year. If I can just shave $5 off per month, that will be a savings of $60 per year, and I'll feel like I'm making strides in this area.
We have a few shuffles in the budget, as well, like moving monthly allocations out of savings for travel, and into savings for education expenses. And removing a savings for a new water heater entirely from the budget, and putting that money into savings for a new furnace.
That's about the short of my budget evaluations last week. Do you take time each year to go over your budget from the past year and reset the new year's budget? Does doing so help motivate you to stay the course? What areas of your budget have you been doing well in, and in which areas do you want to make some improvements?
