During the collapse of the global economy, a European head of state was heard to explain, “it was a global bank, it had testicles everywhere.”
Anyway, that’s how I feel about my assignment this week — except that the issue has been tentacles … tentacles everywhere.
As soon as I explored one aspect of creating and sticking with a budget, I was over taken by a swarm of others. As foreseen by my most trusty blog follower and Facebook commenter, this week’s assignment has indeed proved “the governing thought”. That is, if only I could fix this, I could shut down Zeros. Without budgetary concerns, I have no financial concerns.
Absolutely everything ties back to the budget. How much income I have. How reliable that income may be. What my fixed outgoings are on things like rent and utilities. What steps I might take to lower these. How to get a handle on all my discretionary spend … what sacrifices to make. What savings goals to set. Whether to move country, fly to the moon, start working the night shift somewhere.
What doesn’t link back to budgeting? Taxes. Maybe taxes don’t really have much to do with budgets. Personal ones anyway. Let’s not get started on national budgets, not today.
However daunting taking on my budget, the aim wasn’t to nail the whole thing but to calmly examine what it is that makes budgeting such a seemingly futile task (when it comes to controlling my spending) and to come to a decision whether to just abandon the whole idea of it or forge ahead, possibly with a few tweaks.
Much as I’d love it, the budget cannot be burnt at the stake. It must live on. As a discipline and a statement of information. But if there’s any chance that my budget can establish a harmonious relationship with my spending, my budget needs to involve a different sort of discipline and a clearer statement of information than it’s been for me in the past.
Here are just two examples of things that became obvious to me as I removed one clamped tentacle after another to wade my way through the messy swamp of my personal finances this week:
1) As a discipline, I tend to budget backwards. Which is to say I use budgets to work out what the hell just happened rather than to plan my future spend
2) As a statement, my budgets are too complicated and yet still incomplete.
I guess I’ve believed that if I’m going to go to all the trouble of writing down every last thing I spend (one of the rules of Zeros), then I want a detailed breakdown of my costs. Wouldn’t it be more helpful if “travel” broke down into sub categories such as “airfare” and “hotels” — yes, it certainly would, because then I’d have a better sense of how to reduce my travel costs. But in creating a monster of budget with sub categories swinging off of every part of it, my budget is just way too much of a pain in the ass to maintain on a regular basis.
Hence, I only get around to it everyone once in a while to work out what the hell just happened.
After my week’s homework, I’ve begrudgingly simplified my spreadsheet. I’ve also come to the conclusion that it’s perfectly ok if my budget helps me to reconcile the past. As long as I reconcile things often enough to spot errors and fix them (e.g., filing my medical expenses before I lose the paperwork, querying a wrong charge).
As for using a budget to plan forward … well, this idea tentacles all over the posts I’ve made throughout the year. Ones concerned with establishing savings goals (I don’t really have specific ones) and changing some of my spending habits without triggering counter productive levels of deprivation and sorrow.
I can’t fix all these things in a single assignment, clearly. But, I have managed to do what I set out to do this week.
Until tomorrow, over and out.