Ever since I started my first ‘real’ job I have always had a detailed household budget listing income and expenses, ensuring that expenses do not exceed income, and yet this seems to only work on paper. I update it every time my bills increase, but somehow, despite what the budget says, it doesn’t seem to work; every month there’s a little bit that was unbudgeted that has to go on the credit card…. is this ‘budget creep’?
So since last pay day I have been keeping a list of what I spend money on, and a cursory review after two weeks shows two things. WOW food is expensive! I have a lot of money budgeted for food, but I haven’t actually tested the amount for a few years, and I think I may be substantially under-budgeting here.
Secondly, there seem to be a lot of ‘smaller’ expenses that my budget doesn’t properly accommodate, including: refilling the gas cylinder for the stove; pool chemicals (green pools are not very attractive); and new school shoes – all of which individually are only a few hundred rand, but it adds up. My child’s birthday party and presents next week – hmm that’s not in the budget either. OK I see the problem – even my very detailed budget does not actually include everything, so of course there is not enough money! This has been a shock as I thought I had a realistic budget! Does this happen to many of us? I would feel better if I wasn’t alone in this!
What can I do about it? Put us all on an intense diet and ban birthdays?! Probably not sustainable! So my first step is to revise my budget based on actual expenditure over a few months, to accurately budget for food and other regular, additional expenses. At least I’ll know where my money goes, and then I’ll have to make adjustments to keep within income. I also need to re-establish the line item ‘shock fund’ to be used for those ‘shock events’ that can be anticipated but occur infrequently e.g. birthday parties, car services, washing machine repairs, unexpected medical bills… and the list goes on.
So I am horrified to realise that although I have meticulously run a household budget for over 20 years, it’s not perfect; and it’s not gremlins hiding my money, it’s me not keeping up with inflation in my budget. Today’s lesson – the budget only works if it is 100% accurate and up to date!