Confession time, fam. I keep busting our budget. The whole thing doesn’t go up in flames, but category after category, month after month, I keep going over budget. So as I scrolled through the spreadsheet last month, I found myself wondering if this is lifestyle inflation at its undiagnosed finest…or do I need to adjust my budget?
$5 here, $20 here. It seems trivial, which is the bulk of the problem. Because the overage amount is something we can cover, it also seems like something we should be able to eliminate. So if you dream of playing Budget Doctor, here’s your chance. Do we need to be better about trimming costs or is it really time for a budget makeover?
Your Budget Should Fit Your Life
For the short term, budgets can be restricting. They might actually have to be, or they might be restricting by design. If you’re trying to move a huge mountain, you can’t fritter away money.
I lived in Budget Jail for a long time. I never froze my credit cards (in ice a la Confessions of a Shopaholic or digitally with the help of credit companies), but I spent a long time not using them. We tried to buy as little as possible.
Not only was I trying to correct for an out-of-control spending habit, but I had just bought a house and my husband and I were both paying off car loans. We had to tighten our budgeting belts then. Initially, our budget did restrict our spending simply because it had to. That was its job, its purpose.
This is not uncommon or unusual.
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But after I got my mindless spending under control and after we paid off our cars, we found some budget wiggle room. We took the money we normally put toward our car payments and made sure to max out our Roth IRAs. When we found additional income, we saved some, we paid some, we gave some, and we spent some.
Our budget fit our lives comfortably. In fact, our budget was so comfortable that for the past four years, I’ve been mostly just copying and pasting our budget from month to month.
Let Your Budget Change with You
The problem is that our lives are not copy-and-paste identical from month to month. The biggest hiccup I’ve never bothered to address (until now…that’s where you come in!) is the fact that our family grew and our budget never did.
When I was pregnant, I was like a squirrel stockpiling for winter. No, I’m not actually talking about eating. I was too busy enjoying morning-noon-and-night sickness for 30 weeks straight to do much of that. But I squirreled away as much money as I could since I knew I was taking an unpaid leave.
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As much as it would have been nice to relax our budget on our leave, the simple fact was that my husband’s income alone didn’t cover all of our expenses. Sure, we save 50% of our money each month, but I’m the breadwinner, not him. Back then, that meant there wasn’t enough bread to go around while I wasn’t working.
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And as for the two years since I’ve gone back to work, I can’t explain except to say I really thought we could make our existing budget work. I was so busy trying to not inflate our lifestyle that I forgot to make room for the additional life that needs thrive within our budget.
Do I Need to Adjust My Budget?
Rather than give us a blanket answer of yes or no to the budget adjustment, I thought it might be helpful to explore the areas that we specifically go over in on a fairly regular basis.
Our Water Bill
We’ve done quite a bit of work to address water use in our house. Low-flow shower heads, new toilets, a rain barrel, and generally being
too stingy very eco-friendly by not watering the grass ever. In general, our water bill has always been high because of where we live and how we get our water, not necessarily because of how much water we use.
I’ve noticed over the past year, though, that our water bill is generally $10 to $15 more than what it used to be. Sometimes, it’s only $5 over. And once, we hit the budgeted amount on the nose. But it’s been kind of a bummer.
Part of me thinks we should work harder to curb our water use. But perhaps the more rational part of me now realizes there’s a toddler living in our home. Not only is he generally a mess-maker (how do their hands find Unidentifiable Sticky Mess wherever they go?!), but he’s also just taken a toe dip into potty training. There are extra showers, and there are extra loads of laundry. Should I adjust my budget or battle the water bill?
Our Grocery Budget
We never spent gobs on our grocery bill. But I battled it down from around $350 to $200 for two people.
And I was so proud of me. Rightly so! A $200 grocery budget for two adults is no small task. Especially considering that allowed for some organic options (thanks, Aldi!) and neither of us walked around hungry ever.
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To give ourselves a little bit of wiggle room, our grocery budget is set at $235 for the month. This allows for little splurges and also takes into account times when we don’t have our garden to rely on. Consistently, we busting through at $250 or even $275 (although I got a little lazy and counted the pumpkins and mums I bought at Aldi as groceries). Now that we have a third mouth to feed, do I adjust my budget? Perhaps comparing our spending the the USDA food plan charts for the past few months would help. OK, fine, I include it simply because it’s fascinating to me.
Our Spending Money
If I ever create a course, it’s going to be called The Lazy Budget for People Who are Kind of Meh on Spreadsheets and Tracking. (I know. Who do I think I am just giving away brilliant ideas like this?!) I like the idea of spreadsheets and tracking. But I also don’t really care to know how much I spent on dental floss each year. We don’t need to be that granular.
So we aren’t.
And here’s the category where that’s reflected most.
My husband and I used to split $300 a month for spending. What does that mean? Good question. The $300 meant that if we wanted to eat out or buy a new pair of shoes, it came out of this category. We also used it to cover prescription co-pays and postage stamps. Little odds and ends that didn’t really fit anywhere ended up here.
When our son was first born, it seemed logical enough to split the money in thirds. But now that HP is old enough to actually want to do certain activities and even–gasp!–buy toys and treats, I don’t know if it would make more sense to beef this up a bit. Or maybe this is just lifestyle inflation in disguise.
The One Budget Category I Keep Growing
There is one category of our budget that I’m happy to keep growing. No, I’m not talking about investing (though we do try to increase that as well). We’ve actually made a dedicated effort to boost our giving fund. We still aren’t going to break any records or win any awards for the amount of giving that we do, but it does make me really happy to make this a point of consideration when we look at our budget.
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Do I Have The Money to Adjust My Budget?
Now, I’ve given you a peek at the budget categories that might be suffering from a case of lifestyle inflation or might actually need to be increased, you probably need one additional piece of information to help you diagnose our budget dilemma. The money has to come from somewhere, right?
We’re fortunate enough to be in a situation where we could increase our budget categories by $50 or $100 collectively and not really feel it at all. Basically, our regular income can absorb it because we round down with what we expect to earn each month. That means that we built our original budget with some wiggle room. Right now, that wiggle room eventually makes its way to savings or investing after sitting as a buffer in our checking account.
(Don’t panic! We have a dedicated portion of our budget for short-term savings, extra mortgage payoffs, 529 investing, and Roths. It’s not all loosey goosey up in these spreadsheets.)
So we have the money to cover the adjusted budget. The question remains if we should do it, though. Once it’s set in spreadsheet stone, will this lead to a state of financial zen or are we going to face small lifestyle creep for the rest of our lives? Because I can see it from both sides, it seems wise to ask someone else. Is this a case of lifestyle inflation or do I need to adjust my budget for real?
So Tell Me…What would should I do? Do you think making budget adjustments post-kid is a good idea?