Crunching the numbers

I have noticed that I spend a lot of time crunching numbers and talking about our “budget” but doing very little to actually stick to it.

I looked at our overall picture of our checking account last year and discovered that from our main checking account we spent $215 more than we deposited in 2009. Granted there was likely a positive balance going into 2009 but I am still disappointed that it was in the negative.

I’ve taken a closer look as to what our overall budget should actually look like on a monthly basis based on our income last year (hopefully, it goes up this year). Here’s what I’ve come up with:

$4,369 base expenses

$1,588 remaining monthly for gas, groceries, clothing, etc.

To many people our base expenses probably seem like a lot but we have a) a mortgage payment, b) two car payments, 3) three children in daycare or after-school care and 4) a housekeeper that comes every other week because there is no way it would get done with the schedules we have. Under no circumstances would I give up the housekeeper, so long as I am working outside of the house and maybe not even if I was at home.

Also, the $1,588 remaining may seem like enough but we have to take into account that we 1) each drive 40+ miles to/from work each day, 2) 2 children are still in Pull-ups, and 3) I have Celiac (gluten intolerance) which means we do a lot of fresh cooking because most pre-packaged items have wheat in them (rye and barley also contain gluten). Cooking fresh can get very expensive but frozen vegetables are my friends!

According to Dave Ramsey (although we do not follow his plan) you should spend 5%-15% of your income on food, including eating out and any indulgences you might have (ahem, Starbucks) and 5%-10% of your income on personal items (toiletries, pet supplies, hair care, school supplies, life insurance, gifts, etc.). He says that child care should be included in the personal items category but because of the ages of our kids, this is not possible.

So going with that (again based off of our income last year):

5% $297          10% $595        15% $893

Ideally, I would like to do 10% on food ($595) and 5% on toiletries ($297) for a total of 15% = $893.

Thinking about this logically, when I make our budget I don’t break up the groceries and toiletries into separate categories since I get it all in one trip; but this year I would like to change that.

When we get to a point of spending what we made last month (the YNAB way) I think it would be easiest to make one trip to Sam’s (aka Costco to some of you) at the beginning of the month to purchase our personal care items and another trip to the grocery store to get all the shelf-stable/frozen items for the month. Doing these major shopping trips once a month would also require me to make a monthly menu that we actually stick to.

Hopefully we will get our tax return soon and can get 1 month ahead on our expenses and start working this plan instead of just talking about it.