This past weekend I good-naturedly ribbed my friend Craig, from Money Help for Christians, for admitting that he “kissed budgeting goodbye” after more than a decade of faithfully doing it. I mean, this is the same guy who published a successful e-book regarding everything you wanted to know about budgeting (but were afraid to ask).
However, upon further reflection, perhaps I was just a wee bit too hard on Craig. Especially after considering the fact that, this year, the discipline with regard to one of my household budgets has been, shall I say, less than stellar.
Yes, me. The guy who continually stresses the importance of following the household budget.
By the way, I know exactly what most of you are thinking right now: “ONE of your budgets”? How many household budgets do you keep anyway?
Well, the truth is, for years I’ve kept two:
- a short-term spending budget for basic living monthly expenses
- a longer-term savings budget for bigger-ticket items.
The former is what most people think of when they’re talking about budgets; a monthly spending plan for things like the rent, utilities, groceries, entertainment, and other monthly non-discretionary and discretionary expenses.
The latter, however, is less a budget per se than it is a financial road map I rely on — a crystal ball glimpse into the future — that anticipates significant upcoming purchases like houses, cars, and/or family vacations. It may also include other things that folks typically need to set aside extra funds for including:
- paying off large credit card and other debts
- building up a rainy day fund and/or a retirement nest egg
- putting the kids through college
- home renovations
- the kids’ weddings
- elder care for parents
In other words, any spending that requires larger outlays of cash in the future.
One of the very first topics I ever covered for this blog explained how to build your own strategic spending plan. Although I won’t rehash that for this article, here is a very simple example of what one might look like:
Now despite the fact that the Honeybee and I are beginning to slowly move away from following a rigid monthly spending budget, we will never stop maintaining, updating, and following our strategic financial road map. Why? Because the need for us to constantly plan and replan our financial future will never stop.
So why have we been slacking this year with respect to our monthly, short term spending budget? Frankly, because we are now in the enviable position where our income is finally high enough that we have plenty of wiggle room to handle modest budgetary overruns resulting from the occasional desire to splurge — or any other unexpected expenditures, whether they’re discretionary or not.
That’s not to say the Honeybee and I have thrown fiscal responsibility out the window; nothing could be further from the truth. We are still vigilant about maintaining our financial discipline; it’s not as if we have stopped tracking how we spend or save every penny we earn. That will never change.
It’s just that we’re reaping more and more of the many benefits that we’ve sown over the past two decades by: 1) faithfully living well below our means; and 2) keeping our income steadily growing.
And like my friend, Craig, the ability to finally get by without having to faithfully follow a spending budget down to the last dollar is certainly one perk I’m more than happy to enjoy.
Photo Credit: Wei Hsin Li