I spent imaginary money in an imaginary way today. I really wanted to buy a new bass guitar. The bass guitar I have is broken and I really wanted to replace it. There was a used bass guitar at the music store today that was in excellent working condition, sounded amazing, and was only $149.00. I walked through the purchase process in my mind, I justified the purchase, I had explanations of where the money would come from *cough* economic stimulation *cough* and then realized that I was uber-lusting over that which I had no money for. The problem in all that I wrote in the sentence before was the phrase “would come from.” I would get money later that was wind fall income and instead of being a good little boy and doing what I should with it, I was ready to compromise my family’s income and financial future for a bass guitar that I didn’t need, I just wanted it for my own personal use.

I finished doing our 2007 taxes today. Papers are printed out, two checks need to be written, and on Monday we’ll mail the taxes and checks out to the federal government and the state of Colorado. I was hoping that our checks would be smaller together, but I am proud to say that our federal check is only $100.00. Given that I have had to send thousands in past years, this means that we’ve managed to calculate, pay and balance our tax cycle. Our state check was higher, but next year I think we’ll have it nailed pat. Furthermore, since we are sending in less in taxes we’ll have more money to put down on our debt reduction snowball!

I don’t love taxes, but I sure do love having gotten the numbers closer this year. As weird as it sounds I can’t wait to find out about next year’s taxes because I’m ready to be even closer (or possibly get a very, very small refund check because we maximized deductions and credits). I believe there are a few more things that are certain besides death & taxes, but I’m glad to have 2007 behind me.

Bonus: The number one thing that ended up saving me more than I expected (for some ignorant reason) was donations.  We donated stuff to Goodwill as well as supporting various missionaries, our church, and World Vision.  If you’re looking for ways to make your 2008 count, this may be a good way to do so.

Pardon my American term of soccer those of you who call it football. I blame my parents, they called it that because football was an awkward game with very large men attempting to damage one another while not getting damaged themselves. Its like politics only with more distinguishable words that the common man feels comfortable with. You see, my wife wants to sign up the girls for soccer [read: football/futball]. I want to sign them up, too. Just not for a combined total of $270.00. I’m going to declare that watching them play it is fun (we went to a free day where they could practice with a coach so as to hook us into the program). Its greater fun than watching the politicians for sure.

Our getting out of debt budget simply doesn’t have a $270.00 gap in it. Maybe if we saved up for a few months we’d have enough, but that would be money we’d be taking out of debt deduction instead of money going into the debt reduction process. In short we’d be paying our way out of debt for several months longer (or to put it in my wife’s terms: delaying our cash-only anniversary trip). In my mind its not worth it. I’m more than willing to do it once the debt is gone, but at present putting the debt as a lower priority feels like a violation of all that is mostly good (except for the politicians who are mostly not good).

So we’re going to have to discuss this because while we could eek it out of the zero budget, its not my first choice.  We love our girls, we love to see them get exercise and fun, we love to see them get the opportunity to dominate spheres and cause mild pain and suffering in (non-competitive youth) soccer, but this may just have to wait for one more year to go by.  We think next year we may just have all or most of our debt paid off.  Maybe we can buy a soccer ball and kick it in the backyard.  I know it isn’t the same, but neither is American Soccer and Football.  I blame the politicians.

When my wife and I were merely high school sweethearts looking each other in the eyes and feeling as googly as any two people could feel without being any way related to the search engine I suggested that she go on a budget. This was possibly one of the best worst ideas I’d had to date in the relationship. You see my wife is a math genius, except that she’s not a budget buffer kinda gal, she’s an accountant at heart and she wants all of the columns to add up and if forty-three cents were missing (or extra) then she would spend far too much time looking for the difference so as to balance her budget. Since then we’ve worked out a much more workable system that allows for a little tiny bit of innacuracy, just enough to not hunt for forty-three cents, but not enough to ignore forty three dollars. As she became frustrated with budgeting my wife gave up because the small details threw her for too great a loop.

Now we budget for zero. By zero I mean that we plan to spend until we have zero dollars in the checking account. We save what we need to save, we calculate our bill payments, but our focus is on the following:

1. Don’t spend it if we don’t have to
2. Anything left over goes into savings for potential snow-flaking/snow-balling if its left over after quarterly taxes
3. Next month if things get tight we may grab any previous left-over cash into the budget to buffer the differences
4. Pay with cash whenever possible, or use the debit card, but only spend what we have

As we’ve employed these principles we’ve been able to manage our finances much better than previous attempts at budgeting. With my wife focused on paying off the debt as fast as possible she’s spent a lot less on the extra little things and we’re making progress on our debt reduction like never before. We’re “budgeting” to have zero left over at the end so that we don’t spend it on the frivolous.

How do you budget?