My spending this month offers an occasion to talk about an important budgeting topic: what happens when we don't stick to a budget. Because that definitely happened this month.
A budget should reflect your goals, like saving for a house or paying off debt, and values, like donating to charity or investing in health through gym memberships. We construct our budget to reflect real life but to also give us some stretch goals.
For example, we're working to save $100,000 in our Vanguard investment account. We might use it to pay off our house early or maintain it to allow interest to grow. Either way, having this savings goal means we work to keep our grocery bill down and our personal allowance spending reasonable.
We maintain our joint checking account for all budgeted spending like groceries and personal allowance. But we budget to the dollar and don't keep much padding in our checking - it has a tendency to be spent. This means we have to monitor the account closely and/or use credit cards strategically if we are spending over a budget.
This month I knew I would go over my allowed $100 personal allowance budget because of traveling to San Francisco. So while I traveled I put purchases on my credit card (I use a Southwest Visa to accumulate points for free Southwest flights and Chris has Chase Sapphire). The extra spending is paid off with money from either our joint savings or from my personal savings account, although we consider it all "our" money.
Even though I overspent this month as I look down the expenses I see spending on quality time with friends and local arts and culture. And overall this year my spending has been within or under budget. Because we've been so great with our budget a month here and there that blows the budget is ok.
What I spent in August:
$5.40 - nail polish top coat
$20.85 - drink at book club plus a drink for a friend who bought my drink last time
$25 - Heard Museum admission to see the Frida and Diego exhibit
$6.25 - Tsoynami treat after the Heard Museum
$63.41 - dinner in San Francisco with Kelly, my treat
$15 - Exploratorium after dark with Kelly in San Francisco
$58.07 - dinner at Calavera in Oakland with a grad school girl friend, my treat
$10.50 - The Glass Castle movie with my book club. The Glass Castle is one of my favorite books and the movie was a faithful adaptation.
Total spent in August: $204.48 out of $100 budgeted.