Budget

I recently received a reader request from Allison (shout out to Allison --- Thanks for reading!). She suggested that I share my budget as she felt readers might be interested. So here it goes…in addition to sharing my budget numbers I thought I’d take it a step further and share my philosophy on budgets which is that is has to be stretchy like a rubber band or it will never work.

My monthly budget is $1800, excluding savings and automatic withdraws from my paycheck*. This increases several months a year when I have irregular expenses like car maintenance, vacation, taxes etc. To account for these irregular expenses I save monthly so in reality I still stay with in my budget. My budget line items are pretty simple – I like to keep it easy as can be. Big Expenses include Rent ($620), Charity ($500), Dinning/Entertainment ($230), Utilities ($150), Gas ($100), Groceries/Sundries ($100), Misc-clothing, memberships, gifts etc ($100). Any left over from the month I roll over to my irregular expenses savings in addition to my normal savings.

* My health insurance, flexible spending account, renters insurance, retirement contributions etc is automatically deducted from my paycheck

While my monthly budget is $1800, I don’t hold strictly to my line item budgets. Each month is slightly different for me – one month I might eat out more often but buy less Groceries, another months I might splurge a little big more on gifts (especially around June when I have three birthdays in a row) but I’m so busy at Birthday parties that I don’t drive as much. I don’t beat myself up over this if I go over my targeted line item budget, I simply adjust for it from another category. If you don’t adjust for it then its like you’re on a really strict diet and I don’t know about you but I can never seem to follow those because eventually you just can’t take it anymore and have to splurge so I allow myself that splurging. It also allows you to do last minutes items that aren’t planned for – if my friends are going out and I don’t have to say no just because I’ve reached the $230 limit, I can just “borrow” a little for another category or if I absolutely need some toilet paper but I’ve used up my $100 groceries/sundries budget I can still get the items I need and “borrow” it from gas etc. The only two that I don’t borrow from are Rent because I prefer not to get evicted and I don’t borrow from Charity because I make that a priority. But all the rest are adjustable.

To help ensure that I’m staying on track with my budget, at least once a week I check on my total expenses for the month (excluding the irregular expenses) and calculate how much remaining money I have – this helps me to adjust my spending and help me remember my goal with my budget. I also check on each of my line items to make sure I’m in the ballpark and if I notice a trend over several months I adjust accordingly as well.

That’s my take on budgets --- how do you manage your budget and what does your budget look like?