First, let me say, that I’ve always admired people that create budgets and could follow them to the T.  I’ve actually tried to create a budget when I was in college, but it’s never worked out for me. There was always something that would pop up that I didn’t save the receipt for.

Surprisingly, while doing my Breakfast/Lunch experiment, I “out of the blue” realized that my experiment is really a form of budgeting.  I decided to call this type of budgeting “Spot Budgeting“.

Here’s how “Spot Budgeting” works for me:

• First, every monday, I clip 5 sheets of paper I recycled together and use them as a log for things I do at work.
• At the top, I add Breakfast and Lunch cost to these 5 sheets, 1 entry for breakfast and 1 for lunch on each sheet.
• On Friday, I add up the total cost for breakfast and lunch, then I do the following calculation:
  • Is 60 – (weekly breakfasts + weekly lunches), greater than 40?
    • If 60 – (weekly breakfasts + weekly lunches) is greater that 40, then I pay myself the full $40 dollars for an allowance.
    • If 60 – (weekly breakfasts + weekly lunches) is less that 40, then I pay myself the amount that’s less than $40 dollars.
    • The following week I’ll make it up by not eating out for lunch as much.  Then I’ll pay myself the amount over $40 dollars that I didn’t spend.
• Since I’m adjusting and tracking this weekly, I don’t do any monthly or yearly budgeting comparisons (this makes it simple).
• Since it a weekly comparison, and it typically only involves 20 entries (only 2 a day) to log per week, it’s very simple and quick to do.
• If I want to calculate my yearly savings, it’s just (40*52, which is $2080)
• That’s it…  My budget is just for Breakfast/Lunch and during the typical workweek only.

Now my next stage is to take the money I save by budgeting and put it into a dividend yielding stock (etf, bond, mutual fund or whatever).  Then use the dividend paid by that investment to increase the amount of money I have for lunch.  See my attached spreadsheet table below:

So after 3 years of saving, I can afford to buy another cheap lunch per week, while I’m at lunch… so instead of 2 days out for lunch per week, I’ll added another lunch out with the guys after every 3 years of savings.

My view on the “Spot Budget” is that you are no longer paying for the lunch out of your earned money, but instead using the money from your investment dividends.  So after the 1st year of investing the money, this will effectively be my “Lunch Fund”.

To speed up the savings, I also add “Additional Savings” to my “Lunch Fund”.  The “Additional Savings” could come from bonuses, part of my tax refunds, etc.

	Additional	Main	Adult	Total	Yearly	Amount &	Interest	Monthly	Weekly
	Savings	Savings	Allowance	Contributions	Interest	Interest	Rate	Earnings	Earnings
2009	1000	2080	3080	3,080.00	$154	3,234.00	5.0%	$12.83	$2.96
2010		2080	2080	5,160.00	$258	5,418.00	5.0%	$21.50	$4.96
2011		2080	2080	7,240.00	$362	7,602.00	5.0%	$30.17	$6.96
2012		2080	2080	9,320.00	$466	9,786.00	5.0%	$38.83	$8.96
2013		2080	2080	11,400.00	$570	11,970.00	5.0%	$47.50	$10.96
2014		2080	2080	13,480.00	$674	14,154.00	5.0%	$56.17	$12.96
2015		2080	2080	15,560.00	$778	16,338.00	5.0%	$64.83	$14.96
2016		2080	2080	17,640.00	$882	18,522.00	5.0%	$73.50	$16.96
2017		2080	2080	19,720.00	$986	20,706.00	5.0%	$82.17	$18.96
2018		2080	2080	21,800.00	$1,090	22,890.00	5.0%	$90.83	$20.96
2019		2080	2080	23,880.00	$1,194	25,074.00	5.0%	$99.50	$22.96
2020		2080	2080	25,960.00	$1,298	27,258.00	5.0%	$108.17	$24.96
2021		2080	2080	28,040.00	$1,402	29,442.00	5.0%	$116.83	$26.96
	* The idea here is to pack food, which saves money and to pay my allowance out of that money

This is my first “Goal Fund”, eventually I plan on have other “Goal Funds” that will pay dividend for other goals, perhaps vacations, taxes, etc.

Well, this is my evolution of my lunch experiment into a Lunch “Goal Fund”.  I’m kind of excited to see this come to fruition!!

– D