When I talk to people about budgeting, it’s interesting to hear all the ways they’re shooting themselves in the foot.
So many folks have no budget at all. They spend freely throughout the month and wonder where all their cash went when the well runs dry. The answer is simple; your money floated right out the window the moment you stopped paying attention to your cash flow. This is why I insist on setting an absolute budget for my household. The point is, there’s only so much money to spend, and that’s it. If you mishandle your cash throughout the month, you’re going to have an uncomfortable couple of days when you get to the end of the period. This is especially brutal when it comes to managing your utility budget, energy expenditure, and HVAC system. In my home, we have to choose which days to use the heating and cooling system. Our furnace and AC don’t run every day of the year because it’s expensive, energetically irresponsible, and costly to rely so heavily on artificial indoor air. We can use the heating system when it’s horrifically cold outside. We can turn to the central air conditioner if it’s honestly boiling hot inside the house. But when we run out of money to pay the energy bill budget each month, we’re SOL. At that point, we have to make due with natural ventilation AKA opening the windows and hoping for the best. I’ve tried to tell my friends and family about budgeting for your energy expenditure each day and making intelligent decisions about using the central thermostat, but most people aren’t interested in the strict HVAC practice. When they talk about budgeting for household expenses and utility bills, it’s really more of an ideal than an absolute.