I was a dufus in July. I’m not a dufus in August.

Yesterday I confessed to being a dufus.  Busy Mommy of 3 kindly offered up her perspective.  She was sweet enough to suggest it wasn’t me, it was an affect of using Gail Vaz Oxlade’s jar system. She said “It would be too much work to take the cash out every week and figure out how much to leave in the bank for automatic withdrawals and cheque writing. ”

First of all, big hugs to Busy Mommy of 3. I love that you came to protect my honour! How cool is that!

Truthfully, I’d happily lay the blame on the jars, or in my case, the envelopes, but I can’t. I totally get what BMo3 is saying, but the problem was a lack of attention to detail on my part. Full stop.

I use the jars (envelopes) for only a few expense categories: groceries, entertainment and dining out. These are the primary expense areas where I’ve found I over spend if I just use my debit card.  Having tracked my budget for many years prior to 2010, I only tracked my over spending. The jars create a huge shift for me, particularly with groceries.

Like BMo3, I keep a very detailed spreadsheet, with three tabs (home, business, rental property), that forecasts a year ahead. I even have my 2011 spreadsheet largely completed in draft form. Like most spreadsheets, when I change an expense or revenue amount, I get an updated variance. For each month, I have two columns: one for budget, one for actuals. I can see where I go off the rails very easily.You can see that for me, it isn’t actually too much work to figure out how much needs to be left in the bank for automatic withdraws, cheques, etc. I do it all the time. I just didn’t do it properly in July.

I’m am so organized that I try not to go on about it too much because it either makes people think (a) I’m just too weird, or (b) I don’t have a life, or (c) money is all that matters to me. None of the above is true. Well, it doesn’t matter too much if folks think I’m weird, but I do have a life, and money isn’t my number one value. However, I am solely responsible for myself and my two daughters, and I know how quickly things can go sour. I’m not wealthy, so I don’t have a big fiscal safety net. I want to act responsibly.

As I continued to think of my stupidity yesterday, I had an aha moment. I realized that I’m not actually over budget in August at all, I was over budget in July. Just as I suspected. I’m really only picking that up now.

Let me explain how I got myself into this: I get paid monthly. Because I’m self employed, I collect payments with HST. I don’t pay income tax on a regular basis, only annually. This means when I file my income tax, I know I’ll always owe. It’s because I haven’t yet paid for that tax year. In order to keep myself in a position where I can pay my tax bill on time, I always deduct a portion of my invoices and put it in a high interest savings account outside of my regular day-to-day banking at the CIBC. This I consider to be my fiscal parking lot. I put away money that’s for my provincial tax, for my federal tax, for my CPP and for my HST payments. The money that I live on month to month is my gross income, less the amount I ‘park’ for taxes, CPP and HST.

As the year goes on, my fiscal parking lot starts to look pretty attractive. I don’t even think about it. I don’t even consider it my money, because it’s really not. It’s only mine to responsibly care for until I have to pay the taxman.

What does any of this have to do with my recent budget issue? When August began, I started the month with my regular amount in my chequing account. Anything left over I just put in my financial parking lot. I didn’t review my bank statement to just ensure that some end of month obligations had cleared. SO, the money I had allocated for my mortgage payment, and that $85 cheque I actually put in my fiscal parking lot. All I need to do in August is unpark it back to my chequing account.

It means that my suspicion that I’d overspent in July was bang on. I was a dufus in July. I haven’t been a dufus in August. In fact, in August I’m golden. I should take back my grade in July and make that one a fail. I shouldn’t be penalizing myself in August for stupidity a month prior. I’ve been doing great in August. September, however, will be pretty challenging. I already see that.  I’ve completely accepted that the journey isn’t a straight line.

Thanks to BM03 for coming to my defence. Your comment made me reflect again on the situation, and see it for what it really is. Meanwhile, onward and upward!

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2 responses to this post.

  1. Posted by Busy Mommy of 3 on August 25, 2010 at 10:12 am

    I’m glad that my comment triggered a more detailed analysis of what really went on in July/Aug! Good luck!

    ~Anita

    Reply

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