Being Nimble – Financially Flexible

The following is a staff writer post from MikeS.  He is a married father of 2.  So, with the cat, he ranks number 5 in the house.  He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.

Over the past several years as I have become better at managing my finances, one trick that has kept me on budget is being nimble or flexible.  I have written in the past how flexibility has helped me to stay within my budget.  The topic has come up again recently.

Our Canceled Trip

My wife and I have taken a small vacation without the kids the past couple of summers.  The trip has consisted of a couple of nights staying at a hotel, a few dinners out and activities during the day.  We always budget for the getaway, usually with money from my annual bonus.

This year was the same; we set aside $1,000 for the trip.  We ended up not going on the getaway.

What this means is that we had $1,000 budgeted for travel expenses that we are not going to use.  Since we already fund retirement sufficiently for us and our emergency fund is at an acceptable level, we needed to decide what we were going to do with the extra money.  As always, here is a peek at what we are planning to do with the money.

How to Use the Extra Cash

Some of the money is being spent on vacation related expenses.  I typically take a week off during the summer.  We travel to my in-laws vacation place.  It is in a community that has a lake and pool, so the kids have a lot of fun.  By doing this, we are able to save money by not having to spend money on lodging.

With some of the unused travel funds, we are taking the kids to an amusement park somewhat near where we are staying.  The expense will be significant, probably $200-$300 with the tickets and food that we will buy while we are at the park.  Since we have the money, I did not have to figure out where the money was coming from.

We also took the kids to see one of the kid movies that are out this summer.  When you factor in the tickets and popcorn, the cost ran up to $75.  That cost would normally have been absorbed by our entertainment bucket, but came out of the travel bucket instead.

The wife and I still went out for dinner and some entertainment, but the cost was only about $100.  All in all, we will only spend about $700 of our vacation budget.  So, what are we going to do with the remaining money?

The remaining money is going to something for the kids.  Recently, we got one of my daughter’s older toys working again.  When my daughter was younger, my sister-in-law bought her a motorized toy car.  The car is suitable for a 2 or 3 year old.  Since my kids are turning 4 and 8 this year, the have out grown the car.  We are thinking about buying them a new car.  The models that we are looking have two seats.  We figure two seats would help to cut down on the fighting between the kids.

Do the kids need the car? Certainly not, but since we have the extra funds from our travel bucket we can use it for something else.

Financial Flexibility

That is where being nimble comes in handy.  Just because you have money labelled for one purpose does not mean you can’t use it for another purpose.

When gas prices declined over the past year, I did not change my budget for my gas expense.  I figured that someday gas would go back up and I did not want my budget to be impacted.  I simply transferred some of the extra money into my general savings bucket every month.  When gas prices go back up, I can just change things back.  An overall plan has been what has kept me growing my net worth.  The individual details seem to change quite frequently.

Being nimble has allowed me to keep following the overall plan while still staying within my budget.

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