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I Screwed Up Our First Budget. But Don’t Worry, It’s All Permissive Baby!

I wrote a post recently about my budgeting system and why I think it is foolproof. Like I said in that post, our permissive budget is like a treasure map. Follow it and it will lead you to financial success. So why would anyone hate budgeting? Still, there was some resistance to the idea presented in that post.

So, I felt that it would be important to follow up with a story about how I bungled the first budget that me and Selenid did. Well, it wasn’t our first budget ever. But it was our first real budget after knowing what we were doing. And our first real budget after I started making my attending salary.

I share this story for one very specific reason. Most of the people who resist against budgeting see it as overly restrictive. Budgeting is seen at something that you have to do perfectly or else it won’t work at all. Like an all or nothing phenomenon. My experience will show you that is not the case.

I share a personal story of failure to demonstrate exactly how and why a permissive budget actually works as a road map to financial success!

OK, some backstory

As many of you know, I just graduated from plastic surgery training in July 2020 and started my first attending job in Buffalo, NY in July.

The way that plastic surgery works, once you graduate training, you need to do “boards collection” to be eligible to be tested for and become board certified. This process involved highly documenting every single operative case that you do between starting your job and the following March. This includes taking extensive photo records.

Enter the problem

I had an iPhone that somehow had a cracked camera lens. Not the screen, the actual lens. I think it was a victim of me sitting on it while it was in the back pocket of my scrubs. So it took really quite terrible pictures. They were blurry and out of focus at best. I realized I couldn’t continue this way if I needed the phone camera to document cases.

permissive budget
Ah, the root cause of my budgeting blunder (but it was an iPhone). But it did prove to us just how well out system actually works!

The logical next step was obviously to get a new camera or a new phone. I didn’t trust myself to always remember to bring an expensive camera to the operating room. A phone camera would be more reliable. So, I decided that I needed to buy the iPhone 11 with an improved camera and that would serve my professional purposes.

So, I called my service carrier, found out that I was due for an upgrade, and told Selenid that I was going to the store later that afternoon. That’s exactly what I did and I traded my old phone in for the new model. It cost $800.

Can anyone point out what I did wrong?

It’s a bit of a “what am I thinking” question since I omitted some parts.

What happened next was that we went about our lives until the end of the month. Then, we sat down on the evening of August 1 to run our budget according to our system.

As we were going through our bank account to account for all expenses that month, the $800 charge came up.

Selenid was surprised. Why?

Well…I absentmindedly never told her how much the phone upgrade actually cost. It viewed it as a necessary expense in the sense that I needed it to be successful in fulfilling the requirements of my boards collection. Because of this, I believe I didn’t think the price was super relevant.

But, we have an agreement that we left each other know of any out of the ordinary expenses we are making greater than $500. This just keeps us on the same page and on the same financial team. As you know, I think that’s a huge part of our success.

So, I screwed up

I know what you’re all thinking. Why is this such a big deal? Well, this is the point. It’s not!

My biggest mistake was not being a good team player. That’s on me.

But, financially, our budget is built to withstand screw-ups like this! If it didn’t, that would be the real problem.

Can you imagine how upset your partner would be if you overspent without sharing AND it put you in the red for the month so you had to take out of savings or, worse, put it on credit.

Again, this is why our budgeting system is foolproof

While we have a section in our budget for cell phone expenses, it obviously does not account for a phone upgrade every month.

But, we have a “fudge factor” in our budget template, which you can download here.

We also have leeway built in to just about every expense category. So, even though we may budget out $300 for clothes each month, we never actually spend close to that (except when our kids have a growth spurt). The same goes for all categories that are not fixed expenses like our mortgage.

In simple terms, every variable expense category is an overestimate. A worst case scenario. So, when the worst case scenario does happen, we know we are just fine. And, the rest of the time, we have a surplus of money each month to throw towards our debt, investments, and real estate according to our written financial plan.

In fact, every month we have done our budget so far, we have been over in at least one category. But, we have also always had a surplus at the end of the month.

The system works. Don’t believe me? Try it. Prove me wrong.

What do you have to lose? Nothing. And you have everything to gain.

Well, there you have it

I screwed up our first real budget by not quite being on the same page as my partner.

But, it’s all ok! Because our budgeting system works. (in case you missed it before, learn about our permissive budget here). It purposefully creates the leeway needed so that you nearly always have excess and even the worst case scenario is just following the plan.

My budgeting system does not require perfection to work successfully. That’s because it’s not your typical restrictive budget. It is a permissive budget, excuse me, a permissive treasure map to financial freedom.

This is a prime example of a simple habit that is setting us up for financial success!

Create even more such habits by reading here!

What do you think? What holds you back from budgeting? Have you ever screwed up a budget before? Would you consider your budget restrictive or permissive? Let me know in the comments below!

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    Jordan Frey MD, a plastic surgeon in Buffalo, NY, is one of the fastest-growing physician finance bloggers in the world. See how he went from financially clueless to increasing his net worth by $1M in 1 year and how you can do the same! Feel free to send Jordan a message at [email protected].

    1 thought on “I Screwed Up Our First Budget. But Don’t Worry, It’s All Permissive Baby!”

    1. Nice man! I am sort of doing the anti-budget- just put 20% away for retirement automatically, have our fixed as well as many variable expenses automatically taken out of our checking accounts, divert sinking funds to a savings account, and then spend the rest 🙂 I had gone through a formal budget for a few months- super tedious and never could get wifey to do it with me, so just decided to David Bach it and make the budget at automatic as possible.


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