So this is kind of interesting and something of a surprise to me. As you know, I’ve been using Google Analytics since July to keep track of blog stats. Usually I’m just curious about the basics…how many visitors, what countries, that sort of thing. But, you can get much more in depth if you want to…one of the things I was curious about was what were the pages/posts that got the most viewing. This actually surprised me. The post that was read most, of everything on the website, was this post: A month of living on a zero-based budget. This post was the #1 viewed post for August. In fact it was read over twice as much as the next most popular post. Musta struck a chord with folks. So, let’s do a followup.
When we last left our intrepid heroes, they had spent a month living on a zero-based budget. Every purchase for the month, when added up, had to equal total income for month..not more, not less. In short, every dollar was spoken for. Succinctly…”x” dollars came inot the household, and “x” dollars went out. So, first month had a few hiccups but worked out well. How did the second month go?
Well, the second month worked out better than the first. In fact, because such a large amount of money was able to be put away into savings right off the top (“Pay yourself first”) we were able to pick up a few expensive things in August that normally cause folks grief when it comes time to purchase them. Like what? Well, new tires for the truck, for example. Budgeted for it, shopped around, bought ‘em. No muss, no fuss, and no “Dammit, now I gotta eat dog food and popcorn till the end of the month”.
Another tremendous boon was that we were in a position to take advantage of some things. For example, a coworker of my wife’s was unable to pick up a quarter of beef she had arranged to buy. Would we be interested in getting it? Hmmm…well, we were planning on buying a big buncha beef anyway and, more importantly, we had the resources available to say ‘sure!’. When we went to pick it up, cash in hand, it turned out to be a half, not a quarter, of a beef. Double the beef, double the money. Fortunately, we had the resources to say “Well, we may as well get it and cross beef off the shopping list for the next six months”. And that’s what we did. We had the money in savings to take advantage of the opportunity. So we got a whole bunch quality locally-grown beef at a good price in a tremendous quantity. And we’d have been unable to do that if we hadn’t been tracking our spending and (somewhat) rigidly sticking to the budget.
The other nice thing is that by sticking to our budget, we’re making tremendous progress in having an emergency fund put together of several months expenses. I’m the first to admit that there are going to be times when cash is worthless, but until that point comes…the plumber still wants greenbacks and most auto mechanics don’t take Silver Eagles. (Yes, yes..I know your guy takes them but I’m talking about in general.)
Dave Ramsey says that if you make a budget, and stick to it, you’ll feel like you got a raise. This is absolutely true. A big part of that is because you’re thinking about money in a way that you may not be used to thinking of it – as a resource to be used carefully and strategically, making the most of it. And, indeed, when we have all the groceries for the month purchased, money allocated into savings, and all of that taken care of…we can look at the budget and say “Hey, you know we still have ‘x’ dollars in the entertainment budget. Wanna get a pizza and a movie?”
To tie this into preparedness, one of the nice things about this way of doing things is that it’s allowing a more consistent approach to preparing. Food is a good example. Right now, we’re tracking every item purchased for our grocery budget. We spent ‘x’ on groceries last month and I can pull up a spreadsheet showing every item that was purchased, where from, and how much. After a couple months it becomes easy to see that some items are purchased inthe same (or similar) quantity every month. Like, right now it’s a given we’re gonna go through a couple cases of coke, about 10# of chicken, Italian sausage, etc, etc. So these things become staples and are automatically added to the grocery list every month. (By the way, for groceries we use Grocery IQ on our iPhones. It updates live, so if I’m at WalMart and she’s at CostCo and one of us gets, say, four cans of soup off the grocery list it immediately updates that list on both our phones so the other person doesn’t wind up buying the same thing. It also keeps price information so we can compare prices from previous trips and other locations…which makes shopping around much easier.) Since we’re tracking the groceries so closely, and keeping track of where the best prices are, we’re able to meet our monthly need for groceries and buy extra to sock away.
So, there you go…month #2 of living on the zero based budget. No sense of deprivation, no annoying moments of self-denial…I hate to use the word ‘empowering’ but there it is. When we shop we feel very in control of what we’re doing because we know exactly what sort of conditions we’re going to operate under – we’ll spend this amount and no more. And we’re confident enough in what we’re doing that delaying a purchase until the following month (or later) in order to make it fit within the budget doesn’t seem like a hardship.
So, all in all…so far so good. If you think you’ve got the self-discipline for this sort of thing, I highly recommend it.
Note: the original post has more links to related materials if youre interested.