Financial reflections after five months of budget-keeping

Now that May's over, this is the fifth month that I've been tracking my spending and attempting to keep a budget.

I have a pretty detailed and (if I may say so) awesome budget spreadsheet that I made back in the beginning of December, when I had no idea where all of my money was going, and my mom said I could go to Italy with her and Mark next spring break, if I could pay for it. So I decided to make a budget that would reel in my spending and help me save up for Italy.

In December my plan was to give myself a spending cap, and then record all of my spending on a spreadsheet. By the end of December I learned it wasn't enough just to have a number in mind that I couldn't exceed; I would think, "well, I should still have enough money to eat out/buy that for my apartment/get a couple shirts," and by the end of the month I'd spent much more than I'd meant to.

So in January I created the itemized awesomeness that I've been using ever since. First, there are sections for each source of income: what I'm projected to bring in, and then, next to it, what I actually bring in (this fluctuates because some months I miss work, others I pick up extra cover, etc). Below that are my fixed expenses, the things that I always have to pay: rent, parking, utilities, internet, groceries, gas, and also my monthly savings. I've been putting away $200 a month for Italy since December, and I'm on track to go to Italy. I'm glad I have these saving habits ingrained now, because after the trip I can just keep saving and have a nice chunk for emergencies or future trips or whatever.

My fixed expenses plus all of my savings amount to 80% of my monthly income (52% fixed expenses, 26% savings). I read this article on MSN about keeping your basic living expenses below 60% of your total income - and I'm glad I'm able to do that.

Next come the variable expenses. School-related expenses take up about 10% of the remaining income, though they're only incurred once every three months. The last 10% is for the fun stuff. I realized that by allowing myself to budget in fun stuff (like two movies out a month, and $50 on eating out - roughly eating out once a week), I generally don't spend more on those things than I would have before.

Of course, all that is very nice in theory. What I've learned over the last five months is that in some areas, I fight my budget tooth and nail. Each month the eating out tab has been higher than I want it to be, and every couple months I decide to make some bigger purchase that puts strain on other areas. There is built-in flexibility, but I really wish I was more in control of impulse spending (which usually happens in the middle of the month when I say, "hey, look, I have a lot of money left over!"). But I'm going to try and not beat myself up about it too hard. The first step is to figure out where the money is going - and I've got that down. Now the goal is to really try and reel in spending.

The most obvious place to cut is eating out. Despite my best intentions, I eat out a lot. Usually for lunch, because I figure, "it's only five or six dollars." But that adds up alarmingly fast. Keeping my kitchen better stocked with lunch foods and making lunch the night before will help. Most days I'm out of the house from 7:30 AM - 4:30 PM at work and school, so if I don't pack lunch, I'm starving. During June my goal is to only eat out for lunch once a week, if that. After summer's over I hope to reduce that number to zero, except for the rare case. But little steps.

Eating out less for dinner is also a goal - or rather, the goal is to stick with the original goal, which is once a week.

I guess also, looking at the itemized lists of everything I've purchased over the last five months, most of it is stuff I don't really need, or it's stuff I could have gotten cheaper if I'd looked harder. Especially stuff for my new apartment. So in the future, I really want to ask myself, "do I need that," not just want it, before I make a purchase. And if I really decide that I do need it, I should shop around online and look at thrift stores (or make it myself) before buying it. I really do have all the necessities already - all of the other things on my list are just things that would be nice.

So, I've got a way to go before I'm confident and comfortable with my spending habits. But at least I'm getting there.