Budget Resolutions: Automatic Savings Transfers

Confession: We’ve been really lax about the budget since Nell was born. We gave ourselves the 6 weeks that I was on maternity leave off from the cash budget knowing that we make enough to cover any extra expenditures that came up, and we never got back “on”.  And the reason? We’ve gotten lazy. We can afford for me to stay home and still put money into savings every month {though, at this time, I still work part-time from home}, which was always our goal. And now that we’ve achieved that goal – mostly through spending cuts – we’re lazy about the budget.

So, we resolve to pay ourselves first in 2013.  We have always made the savings transfers at the end of the month with what’s leftover in the budget, even though my meticulous spreadsheet clearly spells out what we should be saving out of each of Mr. B’s paychecks. And in a way, we’ve done this with my paychecks, because we pretend like they don’t exist: I’m an independent contractor, so I immediately take out what I owe in taxes which I file quarterly, then I divvy the remainder up between my Roth IRA, the kids’ college funds, and if there’s leftover after that, our general savings. But our spreadsheet tells us that we can live on just B’s income and commit a good portion of it to savings every month, and I can guarantee that we never transfer the full amount we should be saving on our budget to savings.

Of course, that’s what savings are for to an extent, to buffer the expensive months – ones with things like car upkeep – and grow in the less expensive months, but our hope is that by making automatic transfers on B’s paydays, we will think more carefully about what we spend. At the least, we hope that having to transfer money back out of savings to cover extra, non-budgeted expenses, will make us prioritize our spending better than we have lately.

And speaking of prioritizing, we have some big expenses to plan for this year. Here are the current top five:

1) New tires for B’s car in January
2) Golf trip for B in January
3) New tires for my car in May
4) One of my best friend’s weddings in July
5) A 5 year Anniversary trip this summer

By planning for the bigger expenses on the horizon, we’re hoping that we’ll be able to reel in our superfluous spending. Anyone else re-framing their mindsets on their budgets with 2013 approaching? Trying any new approaches to your budget? You know I live for budget talk {I joke that my ideal date night with B is drinking a bottle glass of wine and working on our budget spreadsheet trying to eek the most savings out of our budget as we can}, so I’d love to hear what you’re thinking for 2013!

PS: Here’s a look at what we allot for our cash budget every month, it hasn’t changed much at all since this post last year. Afew things (like life insurance premiums), cost more this year because we’ve added Nell to the mix, but that’s about it.

Comments

  1. We do it pretty much the same as your family does. The spreadsheet says one thing, but since we usually do savings transfers at the end of the month – surprise!- there isn’t as much to transfer as there “should be”. Gotta change that to the date of check deposit. We’ve talked about it for months now, but we get lazy too. This month, the culprit was the holidays and all the extras that come with it (fortunately, I cash budget for presents all year, so this money was spent on fun extras). I didn’t transfer the savings portion out of my paycheck on the 20th and when I went to check my balances, we’d basically spent that whole amount. No regrets as we could technically afford it, but really, I’d rather that would’ve gone to our savings accounts.

    Goals for January. Reign in the eating and tighten up on the spending. Diets all around!

    Our big things to save/finish saving for this year:
    1. 2 week trip to visit my parents in February
    2. Finish saving up for my maternity leave
    3. We’re having a baby in July = $$$
    4. We’re taking our son to Disneyland for his 5th birthday in October

    Busy, fun year ahead. Definitely motivated to do money things right!

    ~Grace

  2. Really great idea to change the date. We are similiar in making the savings deposit at the end of the month, which tends to mean less savings than we want. We still need to cut back on our spending. Specifically my spending. I’m tired of all the stuff we have accumulated so I’m hoping that I can practice a little more restraint in 2013.

  3. We move money over to savings at the end of the month as well, but my budget spreadsheet has a line item for our savings account in addition to having any “leftover” money going to savings. We need to have a chat about our money goals for 2013. We just refinanced and will be paying off my husband’s car the first half of this year but then we’ll have a substantial amount of money to decide where to put each month (new car fund? new house fund? beefed-up emergency fund? so many choices!)

  4. we redid our budget this new year too. we were doing so well pre-baby, but then just let it all go when she got here (ok, not really, we were still really frugal, but we abandoned the cash system and bought too many things on amazon so it felt crazy!) thanks for posting about this – i love to see how others do it and it seems like you have a really good system in place.