Saturday, July 15, 2006

Death by budget

Or, how to frustrate your plans with over-planning them. I was thinking about how badly I budget today when I was mentally complaining about paying for the magazine subscriptions for this year. Since we got new subscriptions when we moved in last July, all of them are due at the same time. I get most of my magazines from ValueMags (which through Stockback or eBates gives me a 30% rebate) as they always have good prices, and the fat rebate doesn't hurt either. This time however I got a couple subscriptions through NetMagazines (I did the 3-cents-an-issue-or-whatever subscription to Kiplinger's using the awesome code at Free Money Finance), and then used a $5 off code on a couple other magazines. Unfortunately NetMagazines didn't actually sell subscriptions to everything, so I just got Wired and Jane through them.

Kiplinger's - $4.91
Wired - $11.99 - $5 = $6.99
Jane - $10 - 5 = $5

Then I bought the others through ValueMags:

Cook's Illustrated x 2 (one for us, one for my dad) - $24.95 - 30% = $34.93
Popular Science - $15.94 - 30% = $11.16

I got a subscription last year to Cosmopolitan, because I used to buy it at the supermarket now and again, and thought it would be cheaper just to get the subscription. Unfortunately I am just not vapid enough to read an entire year and still like it, so I didn't renew. I love Jane however, and recommend it to all intelligent women. Cook's Illustrated is rather expensive (it's only six issues a year) but they've got really great recipes, as well as a lot of tips and tricks and reviews that you can only get when people spend all damn day figuring out the molecular structure of pizza dough. So it's worth it to me as part of this whole teaching myself to not be a terrible cook thing.

Ttotal cost of subscriptions for the year is $63, which for me is a big chunk of money to pay all at once. (Actually I had to pay about $83 up front since I won't get the rebate for a while.) And these were all the best prices I could find, too. I won't even think about how much they would have cost without shopping around. I probably could have gotten some cheaper on eBay but that seems like a hassle.

So I started thinking, how could I have budgeted for this ahead of time? What if I set up a separate ING account and put in $5 a month all year and used that to pay for it? That seems like a good idea... What about all of the other irregular expenses, like birthday gifts? I already save up some money for Christmas, but maybe I should add up the cost of everybody that I expect to get a small gift (I usually give presents less than $10 for birthdays) and anybody I think might get married (most of my friends are not of the age yet) and what about Mother's and Father's Day? Should I put $3 a month away all year for the inevitable new fan purchase at the beginning of each summer? What about $2 a month for my virus program subscription?

You see how I can get carried away.

I know that logically these things are what the "other" category of your budget is supposed to be for, but I'm such an over-planner that I would try to put all of these things in. Which is basically why I don't really budget. I have some idea of how much money is too much to spend on groceries in a month, but since I don't really have many expenses, I generally just try to think if there's anything that I need to pay for that month that's unusual, and subtract it from the general spending pool left over after all the bills have been paid. Because if I tried to plan ahead how all the money would be spent, I would end up with a hundred little envelopes each with $3.47 in them. The non-budget budget seems to be working OK so far, since if I don't have money, I stop spending it. I try to resist the siren call of over-organization and stay loose with my planning in general.

3 comments:

Daniel said...

Oh Boy, what a good post! I've actually tried the cheap magazines. A few months back I read a clip at www.Mymoneyblog.com about magazines. http://www.mymoneyblog.com/archives/2006/04/some_cheap_fina.html

I ordered Kiplinger's based on that for $4.91. It took friggin forever to come, but I just finally started getting issues recently. Now that I know it works, I'm going back for more!

I don't budget at all for every expense. I know how much I have to spend after my known expenses and savings and that is what I try to spend.

However, I do have a lot of ING accounts for insignificant items. If there is any type of once a year expense,I try to account for it with an ING account. Now, I don't get out of hand, for example, I have 1 ING account for "Gifts" and that is for gifts for everybody.

I agree that non-budgeting is easier and life seems to work without a down to the penny budget. Good luck!

NinjaPigeon said...

Yah, I ordered Kiplinger's, too. But it has yet to come. I'm so disappointed. I hope you guys have better luck with the cheap subscriptions.

I don't budget for any expense that isn't regular. I suppose that makes me lucky, since I can "absorb" several hundred dollars of random stuff every month.

Budgeting to the dollar would drive me insane! Even when I lived much closer to my means, I never could bear to track it that closely. It made me feel almost claustrophobic.

Lisa said...

I have been exactly where you have on analysis-paralysis of how to deal with those non-monthly expenses. I decided that the big ticket expenses needed to be saved for on a monthly basis. The little ones I expect myself to be able to absorb. I guess I drew the line at anything that is more than a couple hundred dollars per year, since I don't like "couple hundred dollar surprises". For example, I have the following items I save monthly for: Christmas, car insurance, life insurance, car maintenance (since when it happens, it's usually bigger than can be absorbed), our propane bill, property taxes, homeowners insurance, and clothing. To do this, I figure out how much per month all these would cost and stuff that amount in to a savings account. I use a spreadsheet to manage how much money is available for each expense.

Good luck!