Posted by The only downside to having a monthly budget is if you reach your spending limit before the end of the month. That is always the case for me during the months that I have car insurance payments due. I have two vehicles that have insurance due every six months. I split the two $158 payments over two months. That means that there are eight months during the year where I don’t have to make a car insurance payment. I could change the payment cycle to every month like I did for my homeowner’s insurance. Combined, my total monthly insurance payment would be $178 for both home and auto. But I like having no auto insurance payment for those eight months. It gives me a little extra money to spend without running into my limit.
The monthly credit card limit that I set for myself is $500. In addition to insurance there are $90 in other monthly expenses on the card. The total with insurance is $268, which leaves $232 for non-recurring monthly expenses. That may sound like a lot, but I usually end up under the $500 limit, so it’s more like $200. That goes fast when you consider that I often have a backlog of home repair projects. Right now, I’m waiting for the end of the month so that I can buy the parts I need to finish a kitchen sink repair. I need at least $100 for parts. Then there is Mother’s Day on May 11th, so I need get a gift. That leaves about $60 which will go toward extra things we need from the grocery store (like cat food). By mid-May, I will have reached my spending limit again.
It makes the last two weeks of the month seem to last forever. I still have a mortgage payment and monthly utility bills which are not on my credit card. That’s another $500 each month. My non-retirement investments generate $1000 each month, and my total expenses are the same. This has been a challenge to maintain because my budget doesn’t account for inflation. Price increases (especially insurance) means that I have less money to spend than I did 4 or 5 years ago. Back then, I would sometimes have a month where I would have to stop using my credit card. But lately, it seems like this is the situation every month and it isn’t going to get any better for people like me when tariff inflation sets in. I can’t even afford to visit a liquor store anymore. When you have to cut beer out in order to make your budget work, you might be in trouble.