2011 Budget

When C started tutoring earlier this year he had two students and was working eleven hours a week. That's not even half the twenty five hours per week that he had been working before he was laid off. And the pay at his new job was roughly two-thirds of what his old pay was. We were (are) very grateful he was able to find a job quickly our budget took about a $1000/month hit. And while we still routinely check job websites and classified ads, there just isn't anything else out there right now! Anyway, before the change in our income we were sending $800 - $1500 away to debt and savings each month. When unexpected or yearly expenses came up, we just cash flowed them and sent a bit less to debt repayment or savings for that month. It was like having a built in $1000 emergency fund each month right into our budget. We adjusted our budget and lifestyle when we took the income hit but now we no longer have that built in cushion for the extras.

I think that is what is happening to us in August and September and even a little in October. Our budgets are in the red because we no longer have that extra $1000 to get us through. Some of the expenses we're facing right now are things that are going to come up every year - back to school, car and truck registration, birthdays. But some of them have been "emergencies" or one-time expenses like the emergency room visit, car repairs, etc.

I've been working on a 2011 budget, broken down by month, to see how a "normal" year would break down for us. Where are these yearly expenses coming up, where are our three-paycheck months, and how is it all going to shake out? Here is my first cut:


As you can see there are still a couple yellow highlighted items. Those are items that need (taxes) or want (races) to be planned in. I just don't know yet how much we'll owe in taxes, although I am assuming we'll owe something. And race entrance fees are definitely a want but C and I really enjoy doing races and we'd like to budget them in if we can.

One thing you'll notice though is about half the year our budget is in the red. Yuck. However, if you look closely, we have over $800 going to savings each month and none of the numbers in red are over $800. That means, should no emergencies arise, we should be able to cash flow all the extra expenses.

Of course, there are emergencies. And to get those numbers out of the red, we either need to cut out the wants a little more or we need to generate additional income. More on those two in the coming two posts!