When I graduated from school, my wife and I moved to Dallas for our first job. Moves are notoriously more expensive than originally planned. Ours was no exception. Two weeks after settling in, Julie sat staring up at me from the floor: “When are we going to buy a couch?”
I thought about all of the crazy expenses we were experiencing and quickly replied, “As soon as we have a normal month, we’ll be able to get that couch.”
Julie, wise beyond her years, quickly responded, “So we’re never getting a couch.”
After helping thousands of people get on a budget, one universal truth has shown itself time and again: There are no normal months. When you set up your first budget, you’ll be tempted to do it with a normal month in mind. Please don’t do this. You’ll fail miserably.
I’ll demonstrate with a view of our 2011. Try and identify a normal month for what I consider to be a very normal family:
January: Our fifth child was born. Diaper costs skyrocketed. Hospital bills also not immaterial.
February: Anniversary, birthday, Valentine’s day, excessive “going to pick up dinner” charges (see January for the impetus).
March: Taxes (we try not to wait until the drop-dead date).
April: Birthday, family visiting (meaning trips to airport, more groceries, perhaps more entertainment), spring break (vacation?).
June: Birthday, Scouting trip, family vacation.
July: Wife’s birthday, camping, family visiting (meaning way more groceries, some entertainment, more camping).
August: Camping, birthday.
September: School clothes, birthday, work conference.
October: Halloween, birthday.
November: Thanksgiving travel, food, fuel, etc.
December: Christmas, two birthdays.
Did you find a normal month? May’s a contender, and maybe August doesn’t look too bad. So did I just disprove my theory that there’s no normal month? Hardly.
The bulleted list above only includes the known anomalies of our cash flow. I still haven’t taken into consideration the inestimable — but probable — expenses that can take any “normal” month and make it stand out as a let’s-hope-that-never-happens-again month:
Home maintenance and repairs
Life insurance premiums
Unexpected travel (wedding, funeral)
The odds are stacked against my family ever experiencing a normal month in 2012. Are you any different? Are you now giving up hope that a budget that will actually work? I hope not, because there’s a solution.
Break up the abnormalities into manageable amounts. Take an abnormality, such as Christmas, or car repairs (one known, one unknown, both highly probable) and break the total amount into smaller monthly amounts. If you want to spend $1,200 on Christmas, you should be budgeting $100 into your Christmas category each month. When Christmas comes (hint: it’s in December, don’t let it surprise you again), you’ll be ready for it, having set aside a bit of Christmas money each month in preparation for it.
What’s that about car repairs? You don't know how much they will cost, so you can’t budget for them? Another hint: The repairs will cost more than nothing. Start setting aside money for a Car Repairs category. The next time the tire blows, you’ll be ready.
There are no normal months. Embrace that. Examine last year’s large outflows, break them into monthly amounts, and start saving for them today. It is possible to handle abnormalities with ease, and without debt.
We did (eventually) buy a couch.