It's Sunday morning and I have spent the last few hours staring blankly at my March and April budget and trying to figure things out. I have come a long way in this journey of budgetting. My journey started several years ago with simply recording what creadit card and loan bills I had to pay, how I would use my salary to pay which ones first, and then transfer from those to other bills to make sure that at least the minimum payments were made. And most of the time, I was able to do the juggling act but things did not get better because each month, I had no cash left and I ended up signing up for more credit cards and balance transfers.
There were 'breather' months where I would get extra cash in the form of bonuses and I could pay off one credit card totally and feel really good about it. But a few months later, that credit card would join my other maxed out credit cards and I was back to square one. This took place several times and basically I had nothing to show for any additional income that I had.
Later on, I learnt about taking loans from the co-ops which offered loans at attractive rates and that was suppose to be used to pay off several of my credit cards. But because I wasn't managing my money well, the loans didn't help much and just added on to my list of creditors that I owed.
Then my budgetting process changed because I knew I was getting nowhere with simply moving my money around various creditors. I needed to know how much I was spending and what exactly was I spending on. This took place for about six months and it was an eye-opening finding out where my money went. In the meantime, I was also much wiser and started putting aside extra money that came in to pay off more of my debts.
With this information (where my money was going), I moved on to decide how much I would need for the main areas, for example, food, transportation, insurance etc. For the next few months, it meant having to keep reviewing the amounts to find the right amount so that I will able to balance my income with my expenses.
And right now, I am still at that position of trying to sort out the right amount. I am happy with my current portioning of my income. My main bills have also been paid off so now it's just what I sign each month on my card that I have to pay off the next month. I am just not thrilled by how things still do not tally at the end of the month because I have no control over (1) my planned spending (because I am not able to anticipate some of the things that crop up unplanned) and (2) overspending on stuff which I end up signing on my credit cards.
I also made a mistake when a month ago, confident that I managed to pay off my main debts/loans, I took up an insurance policy that covered me for critical illness cum life insurance and it meant paying about $454 each month. I thought I would be able to manage the payments but what I didn't anticipate was taking over the car payments fully, so that was another additional couple of hundreds. If it had only been one - insurance or car payments, it would have been manageable, but with two, I was hit hard and I was back in a situation where I had very little extra cash at hand for unexpected expenses or treats. And, I was turning to my credit cards again and I am more aware of it now so I am looking at the situation now before I go back to the financially disastrous state I was before.
So here I am staring at my budget plan for March and April, scratching my head as to what I need to do. For starters, I would need to identify which components of my budget is adjustable. And then, think of how I can stick to the adjusted budget *sighs* Tricky ....
I have not given my budget leeway to manage unexpected expenses that came up later. But I am also stuck because my salary is fixed and I have portioned