The Benefits of Obsessively Budgeting For a Year

Do you ever get the feeling that you’re the only one skipping dessert or passing on that extra cocktail to save a few bucks? How about opting for a night in rather than splurging on a pair of tickets to a hot show? Or starting a new season without any new clothes?

Does it feel worthwhile when you run the numbers at the end of the week, month, or quarter? Does your progress help keep you motivated?

As painstakingly arduous as it may feel to relentlessly stay on top of a your budget for any significant length of time, there are some important pieces of information that can be gathered in the process.

Over the past ten months I’ve been able answer some questions about my finances that may have been nearly impossible without that data I’ve collected.

Here are some of the reasons that I chose to obsessively budget for an entire year:

Determine Your Average Monthly Budget

First and foremost, many of us want to know exactly how much money we need to survive. The answer to this question gives us the ability to make decisions about our career, lifestyle, and future retirement.

Can we afford to take a lower paying job? Is there room in the budget for a real vacation? How much will we need to retire?

For the first ten months of 2014, my average monthly budget was $2,295.19* or the equivalent of approximately $27,500.00.

This is significantly less than my earnings for the past several years and revealed that I could afford a pay cut or a break from the workforce. It’s part of what gave me the confidence to drop down to part-time for a few months.

*Note: This takes into account the outliners of the past two months – $1,952.90 and $2,714.27. In a normal month, I won’t be working off my bare bones budget, nor will I be splurge on three major expenses while simultaneously blowing my food & drink budget, as seen in my October budget review.

Build Larger Expenses Into Your Budget Throughout The Year

I would prefer to never be hit with an unexpected expense over $50, however, larger expenses occur and are difficult to avoid.

Within the first few months of detailed budgeting, I was able to find several recurring expenses that could be proactively dealt with.

Instead of dropping $663 + $100 for my annual car insurance premium and registration, I’ve built these expenses into my budget in monthly manageable chunks ($55 + $10).

I’ve done the same thing with my annual expenses for the dentist ($328), Christmas ($500), haircuts ($200), hosting ($123.36), and my alarm system ($239.40).

I’ve noticed that gifts have eaten a solid chunk of my budget every month. With three known weddings next year, it wouldn’t hurt to start saving monthly for gifts ($300) and travel (estimated at $500-$1,000).

Look For Additional Ways To Save

What monthly expenses could be reduced or eliminated completely? Are there creative workarounds that could be applied?

Every expense is worth a second look and even small changes can add up over the course of the year.

Here are a few expenses that I’m in the process of examining:

– Adobe Photoshop subscription ($21.84)
Are there free or lower cost options for creating blog images?

– Health insurance ($195.02)
Can an employer cover this expense? It will free up an additional $2,340.24 per year.

– Dentist fund ($27.33)
Can an employer cover this expense? It will free up an additional $327.96 per year.

– Hosting ($10.28)
Can I generate at least $123.36 from Google Adsense to cover this expense?

A monthly budget a constantly evolving tool that will continue to shift and change through different phases of your life. Budgeting closely for a year will give you a solid foundation to work from and navigate with confidence going forward.

Readers: Have you obsessively budgeted for at least a year? How have your finances benefitted?

Are you enjoying what you’ve read? Do me a favor by following Cashville Skyline on Facebook, twitter, Google+, and Pinterest!

Related Post

Share:

Discussions — 16 Responses

  • Debt Hater November 7, 2014 on 9:48 am

    I think it’s worthwhile to keep track of all your budget items, though sometimes when I’m out and enjoying myself I let things slide. The important part is probably just limiting how many times you go out and do that!

    I have wanted to start to building my expenses into my budget as well like contacts, dentist, and oil changes, etc but I don’t think I have enough detailed information. Maybe I can start doing that next year after looking at this years budget.

    Reply
  • Kurt @ Money Counselor November 7, 2014 on 10:17 am

    We’ve obsessively budgeted for about 30 years! As a result, my wife and I live in a home with a beautiful ocean and mountain view on Vancouver Island and, while we still have part time paid employment, we mostly enjoy a spectacular Pacific Northwest, coastal lifestyle. I never dreamed I could get this lucky!

    Reply
  • Melanie @ My Alternate Life November 7, 2014 on 7:11 pm

    I live on a pretty bare bones budget as is. I have tracked my expenses for a year, and it’s been eye opening. I definitely spend too much on food and drink. I’m getting better though. For you, I’d recommend going to a beauty school for haircuts and checking Groupon for the dentist. I’ve done both of those things and had no regrets!

    Reply
  • Tonya@Budget and the Beach November 8, 2014 on 8:19 am

    A year plus! It’s absolutely necessary being on such a tight budget. I think there HAS to be other programs to do some free image editing…I can’t think of anything at the moment though. I did use photoshop express before and I do know that is cheaper that the full version but I didn’t feel like I was missing having the full version, so you might want to check that out.

    Reply
    • Leslie Beslie Tonya@Budget and the Beach November 10, 2014 on 12:20 pm

      I use paint.net on my laptop at home for minor image editing: http://www.getpaint.net It’s barebones but definitely does everything I need it to. The open source alternative to Photoshop is GIMP but don’t even bother with that, it is crazy confusing.

      Reply
  • John November 8, 2014 on 7:20 pm

    Budgeting for known large expenses alleviates a lot of stress. Not only is the money readily available when the bill is due, but by closely watching what exactly your regular major expenditures require from your net pay, you can avoid over-spending accidentally, thereby avoiding the need to tap into money saved for other future important needs.

    Reply
  • Melissa @ Sunburnt Saver November 8, 2014 on 7:51 pm

    I -was- obsessively budgeting for about 6 months before I just decided to estimate in my head again and go with that. That works out fine for me, because I (generally) don’t go over my budget every month, but it would be great to see -exactly- what I pay for the dentist, doctor, haircuts, etc. Having a concrete number is more reassuring than a nebulous number!

    Reply
  • The DQYDJ Weekender, 11/8/2014 - Don't Quit Your Day Job... November 8, 2014 on 8:15 pm

    […] Kate at Cashville Skyline shares her experience with budgeting for a whole year. […]

    Reply
  • Mrs. Frugalwoods November 9, 2014 on 8:59 pm

    I obsessively track our spending. We analyze every purchase at the end of each month, which really helps us to hone and refine our spending habits. It’s the best way for me to remind myself that drips and drabs of dollars here and there really do add up!

    Reply
  • Travis @Debtchronicles November 10, 2014 on 7:34 am

    My wife and I are in an intense budget period right now…..I read something recently that I really took to heart, “You can’t change what you don’t track.”

    Reply
  • Alexis November 11, 2014 on 9:28 pm

    I don’t think I’m obsessive as I should be. I don’t keep track daily of what I spend, and that could be a good or bad thing.

    Reply
  • Donny @Personalincome November 12, 2014 on 11:56 pm

    Budgeting is definitely something that I need to start doing because I find myself spending too much on things like eating out and travel. Having a proper budget would probably remove these bad spending habits.

    Reply
  • Katie November 14, 2014 on 4:34 pm

    Hi! This isn’t a response to your question, but have you considered doing something different for wedding gifts? For instance, finding a microwinery that lets you ‘make’ your own wine (basically pick the type and design the label…I’ve seen it for $300/30 bottles)–sounds like a pretty great gift to me. Or maybe a combination of registry/$$ and something small and homemade. I’m totally obsessing over DIY Christmas gifts right now! But I agree that it’s an important thing to budget, though it’s hard since the amount fluctuates so much.

    Love your blog 🙂

    Reply
  • Asset-Grinder November 14, 2014 on 5:22 pm

    Would be tough to budget for an entire year but quarter to quarter I can see doing. Too much up in the air especially when u got kids!!!!

    Reply
  • Myles Money November 17, 2014 on 9:41 am

    Just the act of having a budget means that you’re more responsible than the next guy, but the peace of mind it gives you to know that you are in control (rather than panicking when you see brown envelopes hit the doormat) is priceless.

    Reply
  • Alicia November 20, 2014 on 7:03 pm

    its so great when you’re out in front of the issues (having identified some of the larger planned pending categories). Much easier to deal with things proactively rather than scrambling 🙂

    As for blog images, I would definitely say you do not need to pay $20+ for them. There are free options every one raves about like pic monkey (disclaimer, the raving might be due to affiliate income). I don’t use that personally, but I’ve not paid to make any graphics – to varying degrees of success.

    Reply