So I’ve never done quarter updates before, but I notice a few other PF bloggers do it so I’m interested in following suit! This entry is a little late, but I didn’t want to hit you guys with my March Spending Recap AND my First Quarter Update all in one post or back to back so I’ve spaced them out this way. I’ve made some progress in April which isn’t counted below (obvs, because it’s part of Quarter II) but all in all I’m VERY happy with how 2012 is going to far and really looking forward to the rest of the year!
So far in the first three months of 2012 I have…
paid off $3,000 of student loan debt
increased my net worth by $9,850
earned 22% of my gross income goal for the year
Not bad! While I’m behind my own schedule for gross income, I’m way ahead for net worth. I’m really proud of how much of my student loans I’ve paid off. I’m thinking of maybe possibly clearing this debt before November 2013 as planned, but I don’t want to get over-zealous and burn myself out, so we’ll see how the next few months go.
The other side of the equation is I’ve been diligently tracking my spending since January 1, 2012. I know exactly where every penny has gone, and now you can too:
Gail vaz Oxlade advocates tracking your spending for at least 3 months in order to get an idea of where your money is going. Looking at that pie chart, we see the bulk of my income goes to my debt — even more than my household bills! I like to think this would make Gail happy.
The problem I feel like I’m going to run into is I spend money differently at different times of the year, so is a 3-month record really an accurate estimate of my spending habits? In the next three months I foresee increased spending in the following categories:
Clothing. I started my nice office job last September, so all my work clothes are basically winter clothes. Summer work clothes are on my to-buy list in the coming months.
Transportation. Last week I joined a car-share program, that lets me rent a vehicle as needed for anywhere from a few hours to a few days. Since my previous transportation costs were strictly cab and transit fare, the new expense of regularly renting a car will significantly inflate this category.
Travel. In the past 3 months, I only made one out-of-town trip to Canmore, AB for a weekend. In the next 3 months, I’m planning a 2-3 week jaunt to Europe. The price tag is VERY different!
Nevertheless, I’m determined to create a workable budget I can stick to, so I’m going to try to account for those expected increased spending areas in my plan. Here’s what I’ve got so far:
Bills (rent, electricity, cellphone, internet, netflix): 31%
Clothing (clothes, shoes, dry-cleaning, mending, shoe repair): 8%
Debt (student loans): 32%
Food (groceries, dining out, alcohol, coffee): 10%
Personal care (spa services, make-up, hair products): 6%
Other (everything else – leisure, transportation, electronics, household, gifts, travel): 13%
What do you think, is this reasonable? How do you set your budgets and plan for variable spending at different times of the year? How was Q1 of 2012 for you?
I think you did awesome in the first quarter. Congratulations on the big increase and the huge blow to your debt.
Based on your first three months, you workable budget for the next three months seems realistic and possible and you’ve made predicted adjustments which is good. It may vary a bit but then you will know how to do the next three months, it will never be perfect especially when trying to predict over a three month period but it can always be great and it will be a nice guideline. Good luck and I wish you the best.
thanks!! Yah I’m really proud of killing my debt in the start of 2012.
I do hope I can stick to the plan… I hope it’s reasonable but I’m not sure yet. We’ll see what the next 3 months bring!
It sounds like you’re off to a great start to the year. Awesome progress on the debt payoff.
I’m sure the car sharing program adds a nice amount of freedom making that extra price well worth it. You’d really end up restricting yourself if you tried to get everywhere by transit or taxi.
And good luck saving for your Europe trip. It will be very pricey, but it will create memories that will last a lifetime. You might as well go on an amazing trip like that while you’re young.
Looks like you’re doing well so far in 2012!
As for the budget…everyone is different. Just keep trying and adjusting and try to not get too frustrated if it doesn’t work right away. You’ll find things that pop up as you go and just decide what to do about them: cut it? add it to your budget? cut something from your budget? or cut savings?
I plan for variable spending like food by setting a “ceiling” budget. For example:
* I took the highest non-winter electricity bill I’ve seen and use that.
* Or use the cost of renewing a driver’s license in the highest cost state I’ve lived in, so that I’m not surprised by how much it costs when it happens.
* With my cell phone, I budget for going over a little bit each month, so I budget for $85 even though the bill actually should be $83.33.
* For groceries, I use the average of the highest amount I’ve spent in the last few years and the average amount I’ve spent per month.
Then when I do spend money in such a category, whatever is leftover from the budget gets snowballed to savings.
* For a lot of other categories, I budget for the average and then let the balance (or negative) roll over, assuming that in some other month, I will make up for it.
* I struggled for a long time with how much to budget for fuel. I had it set to one fuel up per month (at $4/gallon) and not rolling over, which drove me nuts because some months, I will fill up THREE times, sometimes two, sometimes one, and sometimes zero.
* For clothing, I try to think at the beginning of the year or early on in the previous year of all the things that I want to buy/replace this year and add it all up. That helps to make the clothing budget less crazy.
I try to treat every category differently. They all have their own needs.
Good luck!!!
Q1 was a bit crazy in terms of spending for me what with moving and booking some trips, but I think I’m back on track now and I’m feeling positive about Q2! (Seeing $40+ in interest each month in my down payment savings account doesn’t hurt either!)
This comment is full of so many good ideas it’s almost worth a post of its own!
Rounding up is a great idea for regular bills. I could definitely set me $27.72 internet to $30 and that will build up gradually.. heck I should just pay $30/mo then maybe by December I’ll have a “free” month and can use the extra money to buy presents lol.
Clothing is hard to estimate for me. I buy so sporadically but I grab really expensive items. I’d probably have to set aside $3000 for clothing in a year but accumulating that much for that purpose just hurts.
Well done on your Q1 =) it’s kind of nice to look forward to Q2 because it’s like getting a second New Years lol
Or better yet…just set aside some money for presents each month! I calculated how much I wanted to spend on each person for birthday and Christmas, assuming a significant other to buy for, and then set aside that /12 each paycheck. When Christmas came last year, it was already paid for! And I even had some money leftover since I had no significant other!
I thought clothing was sporadic, but it was because it didn’t follow any patterns I could think of. It did follow a “this has worn out, so I should replace it” with a somewhat buffer pattern of “oooooh that looks cute” though. This may be too detailed for you, but here’s a look into my clothing spending plan for this 2012: http://leightpf.wordpress.com/tag/clothing/
ALSO, if you really want to spend $3,000 on clothing, then accumulate money for that. You’ll feel way less guilty about buying stuff or maybe the number will turn out lower than you expected! I originally budgeted for about $1,700 for this year, which includes two new pairs of designer jeans.
Using a car costs money, but it definitely has major perks when it comes to grocery shopping. You can shop out of the flyers better and stock up more on the best deals. I find that I’m much more energetic after using a car to shop, so I get much more done on the same day to boot.
If you track your variable expenses for 3 months you will get a pretty good record of just how much life costs. Things like your grocery shopping will vary quite a bit on a weekly basis, but 3 months worth of tracking will show you how much it costs for you to eat.
Looking at it weekly will alert you to some possible habit changes, but I’m not ready to change my $100 per month blueberry muffin habit just yet.
Awesome net worth increase! That’s incredible.
thanks!! it is turning out pretty good =) but it will go down as soon as I buy my plane tickets to Germany lol
Having a monthly budget laid out doesn’t really work for me either, since my expenses vary wildly from month to month. I love, love love your pie chart though, and think I need to invest the money in having Numbers and Pages on my iPad so I can do the same (I’m the laziest type A person ever).
Congratulations on increasing your net worth AND paying down your debt – that’s amazing!