Wednesday, August 15, 2012

Confession time

I love personal finances, but I hate budgets. Let me rephrase that - I love making budgets, playing with budgets and crunching the numbers, but I hate following budgets. For someone who claims to be a PF lover, it's appalling that I can't stick to a budget. But I think I've found something that works for us... We have automated EVERYTHING. I'm not sure if this is exactly like the "pay yourself first" mentality, but here's the way we do it: each week we get paid, certain amounts are automatically withdrawn and go into different accounts for various goals. As well, almost all of our bills are automated, so we get paid and the money comes out that day or the next and we never miss it.

 Here's the basic breakdown of where our money goes automatically each month (other than bills):

  • RRSPs (me): $100 (twice a month)
  • RRSPs (Husband): $75 (twice a month)
  • Vacation fund: $100 (twice a month)
  • Emergency fund: $100
  • House repairs fund: $50 (twice a month) 
  • Planned spending: $100 (for things like new furniture, computers, etc.)

Then, we live on the rest. Whatever we are left with is used as needed, whether it's for groceries, hair cuts, new clothes or gifts. We do have amounts set aside in our so-called budget for allowances, clothing, gifts, etc., but honestly I rarely follow that. If we have a birthday coming up, we buy the gift and then that means we probably won't go out for dinner on date night. Lately, we have been spending a lot on the house lately, so we haven't been going out to eat as much.

It all works out in the end, or at least it has so far! And this way, we have savings for almost anything you can think of, the bills are paid and we are still able to have fun.

Do you see any flaws in my system? I'm interested in hearing what other people do budget-wise. Does anyone actually stick to a budget cent for cent?

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