Step Two – Financial baseline

When starting a new job simultaneous with moving into a new home in a new state there is a certain amount of chaos wrecked on the home finances. There are unexpected expenses in moving out, unexpected expenses in moving in, and extra start-up costs for all the new services, not to mention replacing all those things you threw out before you moved thinking you wouldn’t need them in your new place.

And there’s always the unexpected house repairs for things that the inspector missed.

It suffices to say that for the first month or two you’ll be doing well just keeping track of whether or not you have money, let alone how much and where it needs to go. Chances are your paycheck will fluctuate for awhile, too, as taxes, shared costs on benefits, and other items kick in.

The sooner you can make sense of¬†the chaos the better, of course. Any and all information you can collect will be helpful. Start up a list of all the recurring bills that have come, along with any you are still waiting to come. At the very least you’ll be able to establish what you don’t yet know.

Then as your bills start arriving, start recording the amounts, noting what expenses are one-time start-up costs and what are more likely to be the ongoing amount. Start using this to put together a baseline of what you think your monthly living expenses will be. Then over the next few months start validating your list, adjusting as needed as you get more data. If you’re lucky you’ll have a fairly solid baselin within a month, but expect it to take at least three months for things to really even out.

Obviously if you see problems popping up (ie. more expenses than income) you need to start making adjustments. You may wish to over time anyway, even if your cash flow is positive. For example, our original plan in moving in was to get cell phones and skip getting a land-line this time. But further research quickly showed that IP phones, cable DSL, and other potential money-savers weren’t such bargains after all. And our cell reception at our home is a bit spotty. So now we have a land-line and cell phones.

Even when we just had the cell phones we didn’t use nearly as many minutes as I had expected. Chances are we’re going to pare back our service. It’ll only save us $10-20 a month, but every bit helps. $20 a month¬†toward food storage goes a long way, for example.

Right now we’re not through our first month, so our baseline is still fairly unstable. But I’ll be tightening it up as quickly as I can. It’s driving me nuts to not yet have a reliable budget. I must have ORDER!!!!

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