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Okay, it's not really a budget update because I have never done a budget in my life. I know this is sacrilege to many here; but I can't get myself to do the necessary forward planning of a formal budget.

I do pay myself first, and I do track actual expenditures. I do look at the historicals and think about what makes line items unusually large or small; I try to take corrective action when necessary.

While I don't have a budget, I do have a customized cash flow report in Quicken. It is unimaginatively titled "Checking, Pocket, and Plastic" because I track the aggregate results of my checking account, my pocket cash, and all my credit cards. The 6 month total cash flow through June 30 is $57.45. That's not the good news.

Down in the transfers section of the report, I see that I made all the regular monthly and semi-monthly transfers to various forms of savings. I had a bonus, and it got transfered into savings net of taxes. But this isn't the good news, either.

The good news is that the only transfers from various forms of savings back into the operating cash flow report were for property taxes (I self-escrow) and Roth IRA contribution (because it washes through checking on its way from a credit union money market account to a brokerage Roth IRA). This may not look big to some of you, but let's compare to last year.

Calendar 2001: $14,250 withdrawn from savings for purposes other than Roth IRA contribution or tax payments

First 6 months of 2002: $0 withdrawn from savings for purposes other than Roth IRA contribution or tax payments

Why/how did this happen? I'm sure that part of it was plain dumb luck; I just didn't happen to have any particularly large emergencies. But I also see that some of the purposes for which I took money out of savings last year happened this year, and money didn't come out of savings to fund them. Why not?

Mostly, it has been from the support and inspiration of reading this board. The big thing has been the repeated message of taking responsibility for my own actions. The techniques advocated to avoid using credit cards also work to limit use of savings for non-emergency purposes.

It's the spending, stupid. I knew that. I just didn't know how much stupid spending I was doing until I made an effort to stop doing it.

The bad news is, this trend is unlikely to continue for another two months. I have had a series of emergency expenditures and want fulfilment expenditures in the past two months that have really stretched the normal paycheck cash flow. If July were to be a frugal, uneventful month, I might not have to tap savings. But I have a vacation planned, and I'm not inclined to give it up. Chances are, I'll have to tap savings to cover the credit card bill that will be due in August. But it will be worth it.

And there is no way I'll have to pull out anywhere close to what went in for the first half of the year. In fact, enough went into that money market account during the first half of 2002 to cover the vacation plus the 2003 Roth IRA contribution.

I guess that might even be worth a small happy dance.

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