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With 2013 already more than 75 percent gone, it is a good time to look at the budget and see how well I am doing. There is always a mid-year, end-of-June assessment that gives me the chance to make needed adjustments. But, by now, I am getting a clearer picture of what I going to have to do in 2014 to make things work out.

The two biggest changes so far this year have been the start of regular Social Security checks in June and a decision to reduce my yearly IRA withdrawal from 4 percent to 3.5 percent to adjust to the economic reality of today. By bringing the withdrawal rate down I am also keeping our yearly gross below the 85 percent tax rate on my Social Security income. Next year I will be aiming for a 3 percent draw-down since Social Security will then be paid to me for a full year instead of just seven months this year.

I am off pretty significantly in three budget areas: repair and maintenance of our oldest car, expenses for Bailey, our cocker spaniel, and furnishings for the house and yard. Since we had planned to get rid of the 10-year-old Hyundai in 2014 and it is driven less than 5,000 miles a year, I thought I'd be able to limp along with minimal repairs. Not true. Almost $900 worth of fixes have put me in a hole. 

You may be wondering why I didn't dump it before putting that kind of cash into the car. Well, as these things often happen, it was $200 here, $150 there, $300 to keep it rolling, the slow dribble of repairs that are never enough at one time to make me want to pull the plug yet. But Betty and I are now of one mind: except for gas and maybe windshield wipers, we are done. If something else goes we will park it and make do with one car until it is time for a new one.

I can blame the overage in the furnishings and decoration budget on our RV trip to Texas last spring. We found several things that we wanted for our backyard. Betty made good use of them in her Backyard Magic redo. But I had not anticipated that extra $700. 

Because Bailey cost $800 to buy and there are significant "startup" expenses with a puppy, I assumed this year would be much cheaper. But a health care plan, a few infections and medical issues, $47 haircuts every six weeks, and enough dog toys to start our own kennel means I underestimated her cost. Yes, the total is less than in 2012, but the expenses didn't drop as much as I had thought they would.

Another off-budget expense (sounds like the government, doesn't it!) was the cost involved with my prison ministry volunteer work. Clothing, supplies, transportation, food, and other costs for my menteee are not deductible, so I keep track of them but didn't budget for them. Silly, I know. At just about $1,000 that definitely throws things off.

Are we doing better than expected in some areas? Yes. The newer car is holding together nicely, so costs are below what I had thought they might be. Our out-of-pocket medical expenses are also lower than I had allowed for. Prescriptions, tests, and doctor visits are nicely below what they have been in years past.

Most other categories in the budget are either slightly above or below where they should be at this time of year. I am anticipating being about 2 percent over budget at the end of the year. I can live with that.

So, the budgeting process for next year begins for me in early November with several tweaks between then and Jan. 1 when the finalized version goes into the computer.

How about your budgeting? Has 2013 been better or worse than you had anticipated ? What have you done about it?

Bob Lowry

Bob Lowry was a management consultant to hundreds of radio stations before retiring in 2001. 

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