2011 Budget and looking forward to 2012

First note, budgets are something that every family has to figure out for themselves but probably the hardest thing to do.  I have always been a frugal person who likes to save but I have never had a budget so I was at a loss on how to figure it out.  Last year I quit my job in January to stay home with my son full time so there was no putting off setting a budget.  I knew that this meant tightening the budget even more then the couponing that I had done for the previous two years. 

I started by doing what all the books say by tracking what I actually spent each month on household goods for three months.  I am not sure if it is like a diet but you certainly do double think everything when you are writing it all down and see the money going out of the pocketbook (figuratively because I don't really use a purse).  February was $223, March was $340, and April was $359 so I knew that I had to do a little better.  I tried in May but it turned out to be a really long month.  I spent $236.11.  I decided that I had to do better in the coming months and then I did really great using everything in the pantry and freezer to spend much less.  June was $147, July was $131, August was $158, September was $158 and October was $168.  I decided that $160 was a good number and I was trying to stick to it as closely as possible.  I was doing a great job until November hit with the holiday, family in town and buying groceries wanted instead of using what was in the house.  I spent $327 less $65 cash that I got for all the groceries that I bought for others (long story) so it was a total of $262 OOP which is $100 over budget.  December also ended up high was $213 which was $53 over budget.  The average for 11 months of 2011 was $223 which as my husband points out is what a family usually spends in a week but it still had me concerned.

I spent a lot of time thinking about what set me off track when I knew that I could do $160 monthly (because I did).  Was it the holidays?  Was it holiday guests and special meals?  Was my pantry and freezer depleted?  Was I doing some more stockpiling then usual? Should I raise the budget?  What should I do to make sure that we stay on track?  I had more questions then answers and read lots of budgeting and frugal books from the library to see if any of them had the answers.  Although it was some interesting reading, no book answered all of my questions.  I think that I am going to try to stay to the $160 budget but I am going to keep an additional cushion to use for great deals to stock up.  The idea is that if you spend a ton one month on things that you are going to use over many months, it still saves money.

I know that we are only in the first week of the month (and year) but I have already spent $116 so I have less than $44 left for the month.  I have found the best deal that I can get on chicken which is $1.66 per pound (I haven't seen that price is almost a year).  I already bought 43 pounds of chicken.  I cut up the first 21 pounds and made it into 26 bags in the freezer for months of upcoming chicken (cost for chicken per meal $1.34).  I have 22 pounds for tomorrow (just so you know, this is my most hated task but do it all at once and I don't have to do it for awhile).  Anyway, I want to go back to Harris Teeter and get more Super Doubles, Giant to get more cereal with free milk and cereal at Safeway for $0.50 a box but that is a lot to expect with only $44 left.  Obviously the chicken is going to be used over many months so I was thinking that I should have a flexible amount of money over the $160 monthly amount to use for big stock ups like this one.  I just don't know how to work that into the plan.  Any ideas??  When I figured out $160 for 12 months it was $1920.  Maybe $80 should be the "extra" money to make it an even $2,000.  I guess I will have my work cut out for me tonight to figure out what I am going to do tomorrow!