If you only look at my after-tax expenses, December appears to have been a pretty good month. We only went over budget by $31. But (and it’s a big but), when you look at our budgeted income, you realize December wasn’t so great after all. We brought in less income than we planned, and it had a big impact on our December budgeted savings. Focusing on expenses without taking a hard look at your income is a huge pitfall that I don’t think gets enough attention.
It doesn’t matter whether it’s due to overspending or under-earning, the fact is that we saved $1,200 less than we planned for. Most of that variance was driven by bringing in less income than we projected.
Day job – No changes here. Just pluggin along.
CPA work – I didn’t make any money in December, but I did have to buy my tax software and pay some IRS fees. I knew they were coming, I just failed to write it down. I’ll see income from this in January.
Violin – Amanda bills her violin students quarterly and only collected about half this month. The good news is that it’s just a timing issue, and we should see that income next month.
Federal withholding – Most people do not really pay attention to their withholdings, but I am not one of those people. I have no idea why more income was withheld this month. I imagine its HR trying to do some sort of year-end true up. As much as I’d love to find out, it’s not really worth my time since the money will be refunded soon anyway.
Giving – It hurts just a little every month. I’ve given at least 10% since I was a kid, and I’ll continue to do so for the rest of my life. We’re I to invest this money, in 30 years I’d have well over $2 million dollars in addition to my regular savings. But I think the benefit of giving far outweighs whatever I’d be doing with that money when I’m in my 60s.
Property tax – I have about $250 automatically deposited each month to a Capital One account that I use specifically for property tax. Automation is one of the best tools you can use in order to meet financial goals.
Groceries – A Costco recently opened up about 45 minutes from us. We went to stock up and bought a new membership, which took us over on food. I also have not been good about breaking out nongrocery items, which inflates our grocery spending.
Clothing – I never buy clothes. Ever. I sometimes forget to budget for this necessity, as I did this month. Darn kids keep outgrowing what they have.
Internet – This looks high because I paid the next month’s bill early, but it will even out.
Fast food – We had a couple of quick trips out of town, and kids are ALWAYS hungry. Thank you Taco Bell.
This question is probably more for those with a variable income: Do you put as much weight on hitting your monthly income as you do your expenses?
Also for you budgeters, do any of you take the time to split out your nongrocery items from your grocery bill?