I know…it is only September…but I already have half of my Christmas shopping DONE! The motive for starting so early? I’m tired of stressing out during the holidays!
The reason I’m starting so early has to do with money. If I began now, I could spread the cost of gifts over the course of several months, instead of spending a large sum of cash in November and December. Since we do a monthly budget, I didn’t want to go WAY over in December (and throw the budget out the window), all because of Christmas. I figure if I SpReAd OuT my spending, I could easily pay $50-$150 in Christmas gifts and it wouldn’t make much of an impact each month.
The last couple of weeks I started searching for a few gifts. To my surprise, I was able to purchase several of my items half-off, just by shopping on eBay and Amazon! If I would have purchased those same items in a couple months from now, I’d be bidding against NuMeRouS (stressed) Christmas shoppers, which would make the bidding prices go uP Up UP!!! I have already saved significant cash on gifts, which allowed me to start working on the items I was planning to purchase next month. Can’t beat that!
The other obvious advantage is avoiding to shop (and panic) at the last minute. I feel less rushed doing it this way and can also make sure I get what I really want (since items are IN STOCK in September! ha!)
Christmas can be the last thing on your mind since we haven’t even hit Halloween, but if your past experiences left you in financial ruins and stress, it might be worth considering!
A few years ago I did something that iMpRoVed our financial stress. In addition to tracking our monthly expenses, I made a simple spreadsheet that estimates what our bank account will look like in six months.
Whenever I log our monthly expenses, I also update this 6-month sheet (to see an example, click 6-Month Spreadsheet). At the top, I enter our most current bank account total. Below, I have the pRojEcTed expenses and income for each month. You should have a pretty good idea on how much you spend if you already keep track of your monthly expenses. If not, now would be a good time to start! If your income varies due to sales or farming, etc. you need to enter in a realistic number to ensure your 6-month projection is as accurate as possible and doesn’t give you false hope.
One reason this concept comes in handy is because it anticipates yearly bills. Propane refills are already estimated in the months of October and January, so when the time comes there is no big SuRpriSeS. By taking into account all of your known expenses you won’t have to worry (and stress!) about moving money around to accommodate.
I especially like the 6-month forecast when I want to make larger purchases. If you’re itching to buy new carpet, you enter in the total and instantly have a good I D E A how much it will affect your finances in the long term. For example, you may get a bonus at work and see an immediate increase in your bank account. You go out and spend it all (and maybe a little more), and then two months later you are panicked because you forgot your vehicle tags and taxes were due. See how this could have been avoided?
As far as financial surprises, like if our car breaks down, I don’t estimate for that. You will find that if you do the 6-month spreadsheet you won’t be likely to spread your bank account too thin. Pick a number that will give you a nice CusHioN for emergencies. As long as you stay above your goal you can avoid roller coaster financial stress and feel more confident in the purchases that you make!
Filed under Finances, Life
Let me tell ya, the word “budget” was not in our vocabulary when Doug and I got married 5 years ago. Like many newly married couples we graduated from college, moved to a new city, got good jobs and spent money on the weekends rewarding ourselves for all of our HaRd WorK. BUT about 3 months after living like that we couldn’t seem to figure out why our checking account wasn’t increasing?! We knew our paychecks were coming in every 2 weeks, but where were they going? The only way to find out was to write down everything we spent for the entire next month. Which we did…and oh was that a wake-up call!
After seeing that in 1 MONTH we spent over $275 eating out and over $400 in gas (not to mention the large amount we spent on household items, clothes, entertainment, etc) we knew something had to change. We didn’t want to live paycheck to paycheck and knew it was time to come up with a plan.
From that point forward we were committed to tracking every dollar we spent. To eliminate the chance of failing we did the following:
1)Create a monthly budget in an Excel spreadsheet (For example, click: Sample Finance Spreadsheet)
2) Hang the new spreadsheet on the FRIDGE w/ a mini-accordion file. Label each section of the accordion file w/ a different category.
3) Every evening write the total amount spent for the day (in their categories) and then put the receipt in the appropriate section of the mini-accordion file. If we didn’t have time to write on the sheet, attach the receipts on the cork-board. Only put the receipts in the accordion file AFTER they are written on the sheet.
4) In the middle or end of each month transfer the numbers from the sheet to the excel file on your computer. This will give you automatic calculations of how much you spent in each category—if your goals were met—how much you saved, etc.
5) At the end of each month transfer all of the receipts and the written spreadsheet into a large accordion file that has a section for each month. This accordion file will contain all of the receipts and expenses info for the year and come in handy during tax season :)
Filed under Finances, Life