For our 4th of July picnic I thumbed through my trusted recipe box and turned to a dessert I haven’t made in over a year: Key Lime Pie (scroll to the bottom for the recipe). I knew that living in Palm Beach Gardens, Florida in my early twenties was going to be a fleeting experience—when I moved out I jokingly bade farewell to the Sunshine State until my retirement—so one of my goals was to master a recipe for key lime pie because I had fallen in love with it at first bite and wished to recreate that taste wherever I happened to move to next. The acidity of a key lime can be overpowering, beginning with a tart taste that crescendos into the sour pucker of a warhead candy, and ending with a bitter taste of lime rind. But when paired with the creamy and subtle flavor of whipped cream a harmony is reached and the taste of the two flavors together, and as individuals, is heightened.
It’s this balance, or yin and yang, between everything in life that makes us appreciate things without going to extremes. Budgeting is no different; when we set both budget limits for needs and wants, we can appreciate both the discipline as well as our current desires because all of the categories are being met. Because the majority of us are working with limited resources, we have to prioritize our spending in each category and not just splurge in one and neglect the other. If we have our eyes set on too many wants, then our needs can suffer. Or if we are too focused on a savings goal or paying down debt, we may sacrifice our wants so much that we binge spend from lack. It’s almost like yo-yo dieting, only it’s yo-yo budgeting: after months of spending very little, the pent-up demand comes out with a fury and on top of living with that feeling of lack for several months, we tend to overspend when we can’t take it anymore, thus diluting the results from our sacrifices.
I have been under-spending for a long period of time, which is a great strategy when you are doing something like paying down $25,000 in debt, paying for a wedding in cash, and putting a down payment on a home (all in 12 months, no less). But even I know that it is not sustainable. Fortunately, because I live the life of frugal decadence, I’ve still been able to do things like go to the movies (only for free), or buy new clothes with credit card reward points, or eat out at restaurants for 50% of the normal cost. Still, even I have my limits.
That’s why I have been looking into the Balanced Money Formula . As a person who has 25 rows in her excel spreadsheet for our household budget, I love the simplicity of this formula. When you go all gazelle intense on debt repayment and saving for short-term goals, knowing exactly where every penny is going is critical; but now that we are almost non-mortgage debt-free, I think we are ready to track less. For this formula, you basically take my key lime pie, and divide it into thirds: Needs, Wants, and Savings. Then allocate the following percents to each, using your net income: 50% Needs, 30% Wants, and 20% Savings. Keep these percentages, and your budget and life will be balanced.
I do not entirely agree with these percentages, as anyone who lives the frugal decadent lifestyle knows that they do not have to pay full price for anything, meaning that their Needs and Wants category should be lower and their Savings category higher. But I do realize that our monthly budget is a bit out of whack. Here are our current percentages: 49.2% Needs (with all debt payments included, though some people put debt repayment into one of the other two categories), 10.8% Wants and 40% Savings. After we pay off the last of our non-mortgage debt in August, our key lime pie will look like this: 32% Needs, and we will need to figure out how we want to allocate the extra 17.2% of our income. According to this formula, we should allocate that to our Wants category, bringing it up to 28%…but honestly I can’t see us spending that much money! I think we will certainly allocate a few percent extra per month for spending on Wants, but the rest will most likely go into savings for both long-term and short-term goals, especially until we recoup our emergency savings to its fully functional level.
The key lime pie was delightful at our July 4th picnic. Paired together, the acidic filling and the fluffy heavy whipping cream struck a perfect balance. I hope to strike a similar balance in my own personal finances in the near future.
I am curious, what are your own percentages?
Key Lime Pie
Graham Cracker Crust
1 package of graham cracker crumbs
8 tablespoons unsalted butter, melted
1/3 cup sugar
3 egg yolks
1 ½ teaspoons grated zest of 2 limes
1 14-ounce can sweetened condensed milk
2/3 cup freshly squeezed lime juice
1 cup heavy or whipped cream, chilled
1 tablespoon confectioners’ sugar
For crust, preheat oven to 350 degrees. Butter 9-inch pie pan. Make graham cracker crust according to directions on box, which includes adding the melted butter and sugar. Press mixture into bottom and sides of the pie pan. Bake until golden, or 8 minutes. Set aside and leave oven on.
For filling, beat yolks and zest in electric mixer at high speed until very fluffy, about 5 minutes. Add condensed milk and beat until thick, 3-4 minutes or longer. Lower speed and slowly add juice, mixing just until combined.
Pour filling into crust. Bake for 10 minutes or until filling is just set. Cool on rack, then refrigerate. Freeze for 15-20 minutes before serving.
For topping, whip cream and sugar until nearly stiff. Cut pie in wedges and serve very cold, topping each wedge with large dollop of cream.