Since working out my budget and reviewing my expenses a little more carefully and writing about it here, I’ve had some more insights and thoughts on this whole business of creating and sticking to a sound budget.
For one thing, I’ve realized there’s a real danger to budgeting if it’s not done properly.
“What is this danger?” you ask, “Tell me, for I would love for an excuse not to build a budget”.
Well not so fast. The only real danger in building a budget is in building it improperly, dusting off your hands and walking away feeling accomplished. Since posting the other day about my monthly average costs and budget plan, etc. I realized that although I reviewed a few months’ expenses and found where my automatic costs were, I neglected to review the entire year and forgot about some things that are billed annually.
The biggest of these costs is my Car Insurance. I live in Mexico and buy a policy from a company in San Diego that provides me with coverage for $420 per year. I also pay a registration fee in Canada each year to keep my plates valid. This is about $80. That’s $41.67 per month on average that wasn’t accounted for in my original budget.
Also, I have this habit of starting websites. I guess you could say I’m in that phase of trying a lot of things and seeing what sticks. I have spent close to $200 this year on domain and website fees. This is a pretty big expense, but I’m OK with that. I want to write regularly and by continuing to follow my nose of curiosity it keeps that spark alive for me, which means I get to practice a lot. In the grand scheme of things I could do with my time instead, I am OK with these costs at this time in my life. Between writing and photography, which is what these sites all contain, I aim to spend 20 hours per week being creative. If I reach this goal, and spend exactly $200 per year on domain fees, etc., I’ll really only be spending about $0.19 per hour, which will likely reduce even more in the future as I narrow in on less and less projects. None the less, these ARE costs, and they need to be added to my budget so that they do not get neglected from my larger financial plan any longer.
Also, in continuing to review my budget, I could no longer avoid the obvious idiocy staring me straight in the face. I decided to also hack my $19.55/month ($14.95 USD I believe) subscription to Audible.com for now, as I have plenty of Audio and written books to get through still and if I really want a new one, and it fits in my well-managed budget moving forward, I can still purchase books as a one-off. So I saved $20/month there just by reviewing my budget again and perhaps to offset the pain of discovering some hidden costs. In any case, that’s going to serve me well in retirement. By the time I am 55 and a few decades in, that savings could represent $13,329 in potential holdings.
The danger is that once you think you’ve got it, you walk away and think you’ve got it. For me I’ve realized I’m going to have to make this a daily practice. I’m even going to add this to my Journaling routine, to write down every morning how much money I spent in the last 24 hours. In these ways, I will probably continue to find hidden, regular, and likely avoidable costs rather than continuing to prod along with my head buried in the sand while stacks of money sit right in front of me.
It’s important to set goals we can reach, which means both being strict and realistic and having the right information, such as a complete and accurate budget. We don’t want things we simply failed to account for to catch us by surprise and give us that sense of failure to meet our goals. On the other hand, it’s been said that a good plan implemented today is better than the perfect plan implemented next week (or never). So get started, but begin revisiting your budget and your plan as much as you can, as the longer you meditate on it the more of it you will understand and keep aware of in your day-to-day, and the more information you will be able to add to it, refining your plan as you go.