Friday, December 21, 2012

World Ending Budgeting

Well, we made it through another world ending prediction and since we are still here it is time to start thinking about the 2013 budget.  Miss MoneyPenny thinks that a budget is a beautiful thing.  Weird, huh??  A budget can set you free to realize your financial dreams and help you to get a good night's sleep in the bargain.
I've been retired since June and living on Social Security, state pension (28+ years at the library) and a small income from bookkeeping for my son, the plumber.  Since I won't be 65 until November 2013 I've been forking over $600 a month for health insurance.  I had this all figured out to the penny before I retired but now that I'm living it, there needs to be some changes.  After all, a budget would not be useful if we couldn't keep tweaking it to get what we need from it.
The first thing that I need to address is a new ledger as mine is falling apart.  I use a simple three column ledger divided into three parts.  The first part is my monthly living expenses and it is divided into several tabbed pages, such as mortgage, utilities, gas, food, etc.
The second part is also divided into several tabbed pages and I call this "Living the dream" because this is where some exciting things can happen like cruises, for instance.  I also have tabs for car expenses, vet bills, medical bills, home maintenance, Christmas, etc.  Every month I allocate a certain amount to each of these funds so that I am prepared for car insurance or repairs, doctor bills or a new dish washer.
The third part of my budget is just a page but it is a record of my savings.  I believe in continuing to save through retirement.  Why not??
Deciding on what your categories are takes some thinking and planning.  I walked around with a notebook for a while and entered every cent.  This is irritating but very helpful for setting up a budget.  This is really the only way to figure out what you spend and how you spend it every month.  Those lattes really add up.  Who knew??
I'm learning now that I'm retired that some tweaking is in order.  Mostly what I need to do is put less money in the grocery fund and move the extra over to utilities because I don't spend as much on food as I did when I worked but I'm using more water.  I'm getting a $25 raise at the beginning of the year, so it is going right into my recreation fund as I never have enough.  The other funds in this part of the budget are working well so will leave them alone.
If you are a reader of this blog, you know that the big problem in my budget is my aging dogs.  The $100 that I put into this fund is not working.  What to do.  I can't keep taking money out of savings for this.  There is only one solution and that is to put more money aside every month.  I'm thinking that I will put $10 less in my other funds and add it to the vet fund and see how that works.  It is always a work in progress.
It took me a long time to learn it but if you don't take care of your finances, they won't take care of you, either.  Time spent thinking and planning about how to use our money wisely, is not time wasted.  It is really exhilarating when it all comes together and you feel like a genius.  Trust me on this.

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