I actually do follow my own advice!!!

Conscientiously following my own advice, I have just completed a year-end review of my monthly, retirement budget numbers.  And you know what, I’m pretty happy with the results.  I am more or less managing to successfully live within my new means.  Cudos to me!

But less you think me Mary Poppins (“practically perfect in every way”), I have had to make adjustments, upwards as it happens, to two items in my budget. 

Gas for the car and groceries.

My original monthly budget for gas was tight.  Too tight, as it turns out, to accommodate the creeping, incremental increases in the price of a litre of gasoline.  Especially during the summer months, the prime time for out-of-town field trips.  I could have solved the problem by simply not driving as much, by taking public transit more often, for example.  But that would only have been a temporary solution.  Eventually, more bus trips would have slowly pushed my monthly “transit” costs higher (I have a budget category for “transit” as well as gas!)  And since I am still planning to continue to take out-of-town field trips during the summer, I am just going to have to pay the going rate for gasoline, whatever the current price per litre is.  With absolutely no chance of 49 cents a gallon gasoline returning (yes people!  I’m old enough to remember when gasoline was sold by the gallon, and only cost 49 cents!) my only option was to increase my monthly gas allowance.

My monthly grocery budget, as it turned out, was a little tight as well.  I had assumed that a third, perhaps even half of my pre-retirement grocery budget was going to brown bag lunches, so I cut my monthly grocery budget accordingly.   (Mad Retiree tip – if you are not already brown bagging your lunch, start tomorrow.  Besides saving money, it will get you used to eating your own cooking, because once you retire, lunches out are one of the first things to go!)  As it turned out, only a small percentage of my regular grocery shopping was going toward work lunches.  It turns out I had cut my grocery budget too drastically.  So number one, I had to rectify that cash shortfall.

And number two - I am a type II diabetic, so my weekly grocery shopping is all about fresh fruit and vegetables.  Whatever the current cost of those fruit and vegetables, that is what I am having to pay.  And the cost of those fresh fruit and vegetables has been going up in leaps and bounds the past eighteen months or so.  In the end, there was no hemming or hawing about increasing my grocery allowance, either.  

The moral of this story - because I had been tracking expenses and working within a monthly budget long before I actually retired, I already knew where every “dime” I earned was going when I set up my original retirement budget.  So making minor adjustments a year later to that budget was just that, minor, and didn’t involve me breathing into a paper bag because I was hyperventilating about how I was possibly going to make ends meet.

I did not make huge, random dollar amount increases to my gas or grocery allowances either.  I was, and still am, monitoring my monthly expenses very closely and carefully, so I knew when, where and by how much I was "overspending" on gas and groceries.

Oh, and by the way, I always pay cash for groceries and gas. 

No exceptions, ever. 

Actually, none of my monthly, variable expenses go on a credit card.  Not lunches, not tea, not Starbucks, not transit tickets.  I don’t even use my debit card.  Only cash.

Why?  Because it’s the only way to watch your hard-earned money literally slipping through your fingers. 

Actually handling your own money, quite literally and viscerally, puts you in touch with your hard earned cash.  And once you develop a personal, hands-on relationship with your money, you think long and hard about handing it over for a four-dollar cup of fluffy Starbucks coffee or for those to-die-for sandals just because they’re on sale.

And I am probably one of the last customers in the Western world that does not pay any of her bills on-line.  Why?  For exactly the same reason I pay cash when I can.  Sitting down and actually reading your monthly statements, then writing, with your own little, lily white hand, a dollar amount on a cheque and then recording that expense is just another way to put you in day-to-day touch with your money.  (You are recording all of your monthly expenses aren’t you?   And by “recording”, I mean writing them down in a ledger.)

Once you get to know your money, understand exactly where it goes – basically get on a first-name basis with your cash, so to speak – you’ll find it doesn’t step out on you nearly as often anymore!!!