As we head into December, I am beginning my year end budget review. While I won’t finalize the results until January, this is the time when I take an “at a glance” view of our finances and see how we did sticking to our budget this year. It is also helpful to do this prior to the big year end shopping push. It’s easier to resist those year-end deals when I know what the cold, hard numbers for the year look like.
As is common for us, medical expenses was where we spent more than expected. We don’t have a flexible spending account associated with our insurance, so we set aside a certain amount per mouth based on estimates of yearly needs. I account for each family member’s well-care in addition to a certain number of sick visits. This year we were the closest to being on budget that we have been in a long time. Because we have chosen to opt for a less expense insurance plan for next year, we will be able to set aside more per month, though we will also be paying higher co-pays. Aside, from the co-pays associated with the birth of our son in March, (which we are saving for in a separate fund) we should do all right. But we will still end this year with a deficit.
The surprising thing about this year’s budget is how far over budget we managed to get on food. Usually we struggle to stay on budget for food, but the combination of increased costs and increased appetite of our two-year-old has definitely tipped the scales. I had two pregnancies this year which resulted in atypical food choices. We also lost some food during a power outage which needed to be replaced.
So in deciding how to allocate money for next year I have to look at how we spent our money this year, if we are pleased with our choices, and whether there are any expected increases for next year. For the most part, I think we made wise choices with our money. There is very little discretionary spending in our budget. We were fortunate to have a small supplementary income since I began working from home on a part-time basis. This allowed us to do a few things we otherwise wouldn’t have been able to afford including the occasional dinners out and a new mattress for our daughter’s room.
As far as expected increases, we already know that our mortgage payment will be going up due to increases in property taxes. (Don’t get me started on the ludicrous logic of increasing property taxes when the value of homes in our area is falling by the day). I’ve also been informed that we should expect an increase in per gallon water usage rates. Of course the big question as always is: where will the money come from? Like most Americans, we are hoping that my husband will receive at least a small raise next year, given the significant jump in cost of living our area has had. But I have to figure out how we will survive if he doesn’t get it. Our utility bills have been fairly consistent and we will probably end the year with a surplus. But we will have to be careful about our usage next year since I’ve had to siphon small amounts off of gas and electric to pay the increase in property taxes. I am also concerned about buying clothing for two children on our very limited budget. I will have to stick to essentials only and thrift store very carefully. I’m not sure how we will keep making do on our current grocery budget given how far off we were this year and the ever rising cost of food. Either we will need to see a serious increase in income or find much less expensive ways to eat.
As of now, we are going to make it next year but I have a long list of priorities if we do have an increase in income including raising our rate of debt repayment, increasing retirement savings, increasing the grocery budget (due to rising cost of food), and making sure we have more money available for home maintenance.
What budget areas have been your struggle this year? How are you hoping to change things for next year?