Friday, July 8, 2011

Excited about budgets

Coming to terms with Budgets, Math and being a nerd.

The story.

I recently posted on my status on Facebook:
So, in case there was any doubt as to whether or not I'm a nerd, I'm really excited about our fiscal month budget for July 15-August 15."
My brother responded with "porque" and the answer became something much longer than should really be on a Facebook status. So, it is now a blog.

Reason #1: it's Math and I Can Do It.

There is probably just something about my nerd nature that makes me love budgets. I've always been a nerd, more comfortable with my imaginary friends than with real ones, but I couldn't always accept it. First of all, I really wanted to be cool. Secondly, I wasn't really good in math in grade school and high school. How could I be a nerd if I didn't like math?

I didn't like math because I wasn't good at it. I wasn't good at it because I had trouble keeping things in neat rows. That meant that it was hard. My teachers were always frustrated because they could tell I understood the concepts, I just got the answers wrong. Not being good at math continued into college. It wasn't until I was in graduate school and had to take statistics that I learned my way out: spreadsheets. Spreadsheets keep everything in nice neat rows anyway. Furthermore, when you use spreadsheets, the concepts and the data are all you need. They make it neat for you. So, I like it. I feel like I can do math because I can make the computer do math. It is like a blind man suddenly seeing.

I like it when all the numbers add up and it all just works. Really, since I use a zero-sum budget, ultimately, I am excited that 1-1=0. I have no money at the end of each fiscal month, exactly as it should be. I enjoy watching it all come together as I enter the data. Each bill paid with money that hasn't come in yet feels like a foe vanquished. I enjoy a filled out zero-sum budget because it lets me imagine a future and causes that future to come into being.

Since this blog is primarily a response to my brother's question, and since we are both table-top role players, I think he will understand this: It is like filling out a character sheet for a role playing game. You put in your abilities, their modifiers, relate them to weapons and can imagine how such acts will work out in "real life." It is the same with budgets.

Reason #2: we're winning and we know it.

My wife and I fell off budgeting when we were between academic jobs and having enough money to buy groceries was all we could hope to accomplish. Since we have come into a better position, we went back to the zero-sum budget. Every month as we work out our budget, we can see real progress. We use goals advocated in Dave Ramsey's Seven Baby Steps to gauge our progress. It seems like every month we move closer to our goals. As we do so, life becomes easier.

In the next fiscal month, we will be completely free from consumer debt and we have already been able to vastly increase our payments on student loan debt as a result. We've also been able to start saving seriously for a second car, a trip home for Christmas and other necessities. All of this will be happening while simultaneously increasing our individual discretionary spending: that means money we can play with. That is something that can really excite a person. It isn't just that we are paying our bills and can feel okay, the budget puts it all there in black and white. We are improving our lives. I didn't get a raise, I just have more money all the time because when I get money I know how it will be used.

Reason #3: Because I am a nerd.

I like budgets because I like budget-type things. I set goals for each week and each work day and put them in little charts and cross them out when they are done. Each week on Wednesday I draw up a menu for the entire week, go through the cupboards to see what I don't have to cover that menu. Then I make a shopping list in which I buy everything I need to make everything I need that week. The shopping list is a function of the budget and the menu.

It is fun. My motto is that you can always change your plans if you have plans. I like plans. They give me comfort. Today is July 8th. Do you know how much you are spending on groceries the week of August 8th? I do: $45. I may go as low as $40, but $45 is my max.

Now, things happen that are unplanned. A good budget has contingencies built into it. If I get a speeding ticket or the car breaks down, we can make it all work. If a person gets the attitude that since there are contingencies there can't be a plan, it all breaks down.

So there.

That, my brother, is why I am excited about the budget we just created for 7/15-8/15.

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