This morning I spent a few minutes looking back on our so-called budgets from 2007-2011. They’re actually pretty comical. Each one is a spreadsheet document with several tables working in symphony to define the perfect month. Of course there was also a fancy chart showing our projected rising (or some years falling) bank balance. I created all of these old budgets sometime in the first few months of the year, and they all turned out to be pipe dreams that never came true!
Like me, you’ve probably tried “budgeting” before. With good intentions and with the vigor of a new year, I would set out to mathematically define the financial composition of a month. I knew I wanted the fancy chart output to have some sort of dramatically increasing scale that would show how wealthy we’d be by the end of the year if we could just “stick to the budget!” But by June (and often far sooner) we’d be back to spending our money ignorant of the budget, and our bank balance never matched the fancy chart’s projections. :(
When it comes to money, I don’t really know what a perfect month is though. Is that like when someone asks you what your “perfect date” is? Don’t get me wrong, I like long walks on the beach, but I wouldn’t want to do that for every single date. It’s like that for my money and my months, I don’t want the same things over and over.
Every month is different, in March it’s my wife’s birthday, in August it’s our anniversary, in December it’s Christmas, and in between, it’s time for a new pair of jeans, or time to pay for the annual life insurance renewal, or time to fix the car, or time for a roadtrip to see family. My life is often unpredictable! I can’t sit down in January and predict how I’ll spend my money in October. In fact, I find it difficult to even predict February when it’s still January.
The average month
So maybe you’ve already gotten wise on the illusion of the perfect month. I thought I had when I signed up for Mint.com, and a bunch of other budgeting tools. But it turns out I was just trading the illusion of a perfect month for the mediocrity of the average month. Most budgeting tools get stuck here. They focus on spreading out all of your year’s expenses evenly across the 12 months of the year. They drive us towards average.
But I’m not really interested in perfection, repetition, or just being average. No, I’m interested in getting real with my money!
Throwing out the idea of a perfect or average month
When Katie and I finally got sick of the disappointments of average and perfect, we decided to trying something novel. Instead of talking about the perfect month, or talking about the average of all the months, we just talked about this month.
That’s it. That’s our secret. We just deal with one month at a time. Before the month begins we talk about what we need to spend money on that month. Not what we need to buy in 2 months, 5 months, or 12 months. Just. That. Month.
Don’t worry though, we’re not neglecting saving for the future, and we still have goals and dreams that go beyond a month. We’ve just found that the best way to realize our future dreams is to make good choices one month at a time. So each month we decide how much we’re going to put towards our future and our dreams that month.
The good news is we’re only 6 days into this month. If you haven’t already, take some time tonight or tomorrow to talk about what you’re going to spend your money on for the rest of this month. Here’s how you can do it:
- Put the total dollar amount you have to spend at the top of a sheet of paper
- Write down the things you want to buy (each with a dollar amount)
- Subtract all those things from the big number at the top as you go
- Keep going until every dollar you put at the top of the page has a job listed, telling it what it’s going to do
- Don’t spend your money on anything you didn’t put on the paper
- Don’t worry about trying to figure out last month, next month, or any other month but this one
- Don’t have enough money for everything you want this month? That’s okay, draw a line. There’s always going to be another month where you can talk about it again.
Have a happy Saturday!