By: Revanche

Budget Execution: How a DHSI saves

April 26, 2010

This is probably the most important detail in the whole process of budget-making: how do I ensure that I have saved a substantial amount by the end of the year, even on an incredibly tight budget? 

Step One was establishing my bottom-line expenses. I know that they will increase but for now, I need to know the precise minimum I *must* have.
Step Two was establishing my savings wish list.  This is what I want and mean to have.  On a meta-level, I know that I have a priority list and can switch priorities as necessary.
*Investing in a 401(k) will be automatic and basically invisible.
Step Three was re-establishing my time commitments. I rely on alternate income to make up the difference between the regular income and the goals and that requires careful time management so that I don’t drop the ball on either side.
Step Four was setting up tracking spreadsheets for the income generated so I stay abreast of the tax implications of freelance work.
Step Five is pulling it all together: as income is earned after the month of April, a set amount will go towards the expense fund and the rest will go to savings.  All alternate income goes toward the savings goals as well.

My priorities

Providing for my family
Rebuilding my portfolio of savings and investments
Making time to enjoy my new life

The numbers 

Expenses: A very conservative $2,800 per month  

Savings: I aim to average $400-500 per month on freelancing = $4950-5850/this year. That takes care of my debt to self which is the same as 50% of my Emergency Fund rebuild goal.  I would then take the rest and stash it in the insurance and maintenance funds.

It’s a little disappointing to see the numbers are so low, but any other windfall gigs aren’t included in that total. It’s ok, this is a work in progress.

{———-Bonus Round———}

And we now know that I have to budget in extra money for further medical treatment and therapies for my mom (to be determined) as well as to move them. Look forward to Budgeting, Redux!

4 Responses to “Budget Execution: How a DHSI saves”

  1. eemusings says:

    Gosh. $2800 is probably also around our bare minimum for the two of us. Damn that high COL!

  2. Jersey Mom says:

    I hope it all works out as planned w/o any more surprises. =)

  3. Karen says:

    Hmm, I think $2800 is about my barest minimum (yes, excludes Target); includes both housing.

  4. Revanche says:

    @eemusings: $2800 won’t be the real bare minimum, it’s just for these starting months. It’ll go up a bit more soon.

    @Jersey Mom: Already it’s changed 😉

    @Karen: I have a hard time deciding if I should exclude Target runs 🙂

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