This blog contains some simple tips and advice from two regular guys. We're not accountants, financial advisors, or brokers, so follow, ignore, or discuss our ideas as you see fit.

Saturday, September 17, 2011

A Dry Run For The Budget

Hi Everyone,

Sorry that I've been out of touch for so long, other aspects of the summer have kept me so busy that I haven't been able to post.

One new item in my world is that with a small child I've been thinking a lot about how to prepare for the future and possible expenses looming on the horizon.

For example, my kid isn't even school age yet, but I often wonder if private school might be something we'd want to look at sometime during his education (or if it's even something we could afford).

So as an experiment I did a quick estimate of what private school tuition costs per month (which by the way is very difficult since they seem to vary quite a bit) and I took that number and invented a monthly 'bill' for that amount.

So on the first of the month I take that amount and pretend to pay that bill. I actually take the money and just move it into a savings account that I created specifically for this purpose.

My hope is that this experiment will do two things:

1- It will give me an idea of how much adjustment it takes to cover this kind of bill every month.
2 - The money itself goes into a savings account that I can use for whatever (including giving me a head start on any future education costs).

It really is just an experiment to see what my family can reasonably afford and what kind of sacrifices we need to make in order to afford it. This helps me get a handle on large expenses that might be coming in the future and mentally prepare for these choices.

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