Author Topic: Mini Fire Drill! Accurate Averages Are Awesome!  (Read 2964 times)

KulshanGirl

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Mini Fire Drill! Accurate Averages Are Awesome!
« on: February 07, 2013, 12:17:32 PM »
Did you miss me, darlings?  Hehe.  I am in the middle of some challenging events these days and I apologize for the abrupt departure.  I will be back in full force soon, and will update on my challenges.  In the meanwhile I just had to pop in and pull the alarm.

My expenses will be increasing soon, and my income decreasing.  *dramatic swoon!*  I wanted to see if there was a way to squeeze enough out of my already tight and mustachian budget to help with some of these changes.  There really wasn't.  But wait... 

On most of my bills that are variable, I use an average in my budget.  Good for me!  However, I have always been a little generous in my averages to make sure that I always have enough.  I do. I also was rounding up on monthly savings for things like car insurance and property taxes.  I decided to really, really dig into those and calculate the REAL, actual averages/amounts I need for those, and to cover three new necessary expenses that I am about to incur monthly. The goal?  $67 per month.  I was overgenerous in my averages (monthly) on five bills by $35 (what the...!), $11, $11, $12, and $15.  Grand total ... $84.  I haven't exactly pissed away ALL of that, some of it is in a Utilities subsavings account to help pay for winter heating and also represents small leftovers in my Taxes and Insurance subsavings account.   But I do piss away some of it from checking each month, and now I have a more accurate picture.  I can afford to aim properly at these bills, if they are a little higher, I can cover it.  But they are always, always lower than I budget for.  And I need those dollars now. 

YOUR challenge is to do the same thing if you have numbers in your budget to placehold for variable bills.  How many little dollars can you find not doing what you meant for them to?  Where are they?  How accurate are your averages?  Go look through the last two years of those utilities and other bills and see what the average REALLY is.  Update your budget, and report your number here. 

Eighty flippin' four dollars a month.  I just got a raise.  :)

HumanAfterAll

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Re: Mini Fire Drill! Accurate Averages Are Awesome!
« Reply #1 on: February 07, 2013, 01:57:35 PM »
Nice work!

I use a two-month look-ahead spreadsheet for my checking account.  I put all of my planned transactions in there, which is only 11 per month.  I pay for almost everything on credit cards, so I just deal with the payoff amount, which I have 1 month to plan for.  If something big comes up like car insurance (every 6 months) or something out of the average, I can put it in the forecast and adjust my spending or savings to make sure my balance stays above my threshhold.  Numbers turn orange when projected balance is below $500, and red below $250.    I aim for $500 to make sure I'm saving as much as I can.

It takes a few minutes every month but it gives me great peace of mind.  If I was just using averages I wouldn't catch the holiday boom, vacations, etc.  I'm sure you are accounting for them some other way :)

KulshanGirl

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Re: Mini Fire Drill! Accurate Averages Are Awesome!
« Reply #2 on: February 07, 2013, 02:25:50 PM »
I do account, for everything.  I thought I was doing an awesome job and I was, mostly.  I have saved that $200 per month for property taxes, insurance, and car insurance for so long, I just kept doing it.  I have one years worth of those bigger expenses in subsavings as part of my emergency fund, and the bills are spread out over the year, so I never really noticed that it was creeping up by a little bit each month.  $200 seemed close enough when I made the budget 7 years ago or so, and I've been on autopilot.  But in reality, and thanks to my premiums lowering due to no claims, I am now wrong on those things to the tune of $27 per month.  Whoops!  But, there's two of my new bills covered. 

Heck to the yeah!  And, now that I think of it, I am going to transfer the excess OUT of that subsavings and IN to my soon-to-be Vanguard account.  I will post my full budget in all of it's glory somewhere on here soon.  I am quite pleased.  The cool thing is that with what I've learned here, my situation is not a stresser.  It will slow things down a bit, but it gives me a lot of freedom to make choices in tough times. 


mustachecat

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Re: Mini Fire Drill! Accurate Averages Are Awesome!
« Reply #3 on: February 08, 2013, 08:57:36 AM »
KulshanGirl, let me be real: I MISSED YOU. Your posts always make me smile.

I'll through my variable bills and report back.

swick

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Re: Mini Fire Drill! Accurate Averages Are Awesome!
« Reply #4 on: April 29, 2013, 01:30:58 PM »
KulshanGirl, let me be real: I MISSED YOU. Your posts always make me smile.

+1 :D

But.... I like my little extra cushion in each category and as we are in the process of closing on our first home and have no idea what are actual expenses are going to be. It'll have to remain for a little longer, but I fully realize we do this because we are unsure of exactly where to put all those extra little dollar workers and I like feeling safe.

We are pretty good about not spending the money and if it accumulates more then we anticipate needing it gets transferred to a savings account (for now, as we learn about all the different investing options)

However, I am looking forward to being able to see the actual numbers once we move and will be able to adjust budget accordingly :)

smalllife

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Re: Mini Fire Drill! Accurate Averages Are Awesome!
« Reply #5 on: April 29, 2013, 01:34:21 PM »
This is one of the reasons I love YNAB - it helps me with the forecasting and forces me to account for exactly what I'm spending where.  I always over-budget for utilities and carry over a bit each month during the middle of winter and summer, but I manage to have about $20 to send to savings at the end of the month.