I'm working to tighten the budget so we can stick to it, and use irregular income (stock option vests, bonuses, stock awards, etc) for our planned goals for the year: boys college accounts, paying down our mortgages, and saving $5,000 or so to have an architect come up with extensive remodel plan for our house.
Here are the upcoming changes for 2012:
- We just refinanced our vacation home from a 30 year to a 15 year mortgage. This fits with our longer term plan of paying that house off within the next five or so years, but it means a bigger monthly payment. Estimated payment increase of $615/month.
- In September, my oldest son will be going to first grade, which means we will no longer be reimbursing the state $330/month for full day Kindergarten. We will still be paying $395/month in after care, as school gets out at 2:30, and I work until 4. Estimated savings = $330/month.
- In September, my younger son will be off to Kindergarten. *tear* Although we have to pay the $330/month + the cost of after care ($395/month), it's still a bit of a savings over preschool. Estimated savings = $250/month
- I have an opportunity at work to invest 15% of my net monthly salary in our company stock options. We get an immediate 15% discount & can exercise quarterly, so I'm bumping up my stock investment from 10-15%. The money will be coming back (with the 15% return) quarterly, but it impacts my monthly cash flow & I need to budget for it. Reduction in cash flow = $400/month. (This is estimated, as I don't have a firm number for my net pay in 2012.)
Categories I'm looking at for cuts:
- Liquor. We spend too much on this category. We frequently bring mixed drinks to parties, & this is typically $40+. We'll be drinking wine only on weekends/special events, which will also help to cut back. Savings = $50/month
- Clothing/shoes for me and the kids. I have a line item budget of $1000 for the year. I'm hoping to trim this down even more, but if we stick to the plan, savings = $20/month.
- Gifts. We've cut back in the category substantially, but could still afford to trim a bit. For example, I'll be using my Toys R Us Reward (accumulated over the holidays & from various shower gifts I purchased) to buy both kids their birthday gifts. Savings = $25/month.
- Personal. This is used to cover hair cuts, the occasional pedicure for me, etc. M bought be a large gift card for Christmas, so I should be able to use that for my pedicures. Savings = $25/month.
- House. We really don't need anything for the house at the moment, so I'm cutting this category back a bit. Savings = $25/month.
- Dining out. M & I primarily use this money for the once/month date night, as well as a once/month lunch date. However, we have a few gift cards we can use over the next couple of months, so trimming this back a bit. Savings = $50/month.
- Gas. Based on my tracking, we're spending less than expected on gas, & I can cut this back. Savings = $50/month.
Are you adjusting your budget for 2012? What's changing & how are you making cuts to fit the budget? And, a tracking question for you. For those of you who do no spend days, do you count paying bills as "spending"? If your power bill comes in, do you just wait to pay it until you've had another "spend" day (e.g. went to the grocery store)? It seems artificial to shuffle the bill paying. Or, are you considering a no spend day when you don't spend on variable expenses: gas, food, dining out, entertainment, etc?