How do you Budget?

L and I over at  Coming to Bloom had chatted about how we budget which led to this post.

I’ve shared with you my monthly budget and given weekly updates on my progress but as I’ve mentioned before – I’m curious. It’s all well and good to tell me something but I want you to show me. So it’s only fair that I show you.

Monthly|Broad Categories

My monthly budget document is a guideline that I developed a while ago and update as my needs change. Realistically the budget I’m showing you is only 2 months old as that was the last time I played with my areas.

Monthly Spending Budget
Income $$$$
Budget July August August Proposed September September projected
Fixed Costs
Life Insurance 7.52 7.30 7.30 7.30 7.52
Car Insurance 5.09 4.99 4.99 5.00 4.99 5.09
Mortage 17.70 17.70 17.70 17.70 17.70 17.7
Home Phone 5.31 5.31 4.42 5.31 5.31 5.31
Cell 6.19 15.49 8.50 8.50 8.54 7.65
Netflix 0.66 0.22 0.70 0.66 0.48 0.66
Savings* 7.08 7.96 5.31 7.08 5.31 7.08
Debt Repayment 0.00 2.02 2.59
Total 49.55 58.97 50.94 51.55 44.92 51.01
Variable Costs
Fashion 3.54 2.35 1.77 0.00 3.79 6.86
Bunny 1.77 1.92 2.72 0.88 1.57 1.77
Eating out 4.42 5.83 2.95 3.10 0.00 1.77
Entertainment 6.64 11.69 17.07 14.38 7.38 2.43
Gifts 4.42 4.64 1.41 3.10 0.00 0
Gas 1.77 10.33 1.73 1.77 1.94 3.54
Car** 2.21 13.28 2.21 2.21 2.21 2.21
Groceries 13.27 14.98 7.75 11.06 5.60 11.06
House Insurance** 3.76 0.00 3.76 3.76 3.76 3.76
Misc. 2.21 2.14 1.10 0.00 3.96 0.88
Medical** 0.88 18.46 0.88 0.88 0.88 14.16
Taxes** 3.32 3.32 3.32 3.32 3.32
Total 48.21 85.62 46.67 44.46 34.41 51.77
Total 97.76 144.59 97.61 96.01 79.33 102.78
over/under budget
% over/under budget -0.47 0.02 0.02 0.18 2.78

You’ll notice that there is no debt repayment on my budget. This is because I’ve fibbed to myself, the income I use is the minimum I feel I can live on without feeling financial pressure it’s not my real income. I deposit my entire paycheque into my Line of Credit from there I pay my bills, transfer money to savings and into my chequing accounts weekly.

At the bottom of my budget I have a list of all my accounts, including my line of credit, and I show myself the balances. This helps me see the growth of my savings and depletion of my debt.

Weekly | Details

At the beginning of the month I ascertain the number of weeks in the month and attribute some spending to each week. I base it on the number of Sundays in the month, therefore in September I budgeted for 5 weeks.

While the monthly budget is in broad categories the weekly spending gets into the nitty gritty.

Budget

This exercise helps me be aware of my spending. In September there were a few expenses I had forgotten about but knowing that I had not allocated all my budget money made this less stressful. At the end of every week I would input my spending into my monthly budget document. As I went over the 1st week of September this was my opportunity to readjust the spending for the rest of the weeks. I updated the rest of the month accordingly and didn’t blow my monthly budget.

Why?

It may seem ridiculous to use both these methods. I do because the monthly budget is how I learned to budget and I get  great satisfaction from seeing my spending trends. The problem is that I can still be a bit of a child: “$250 for groceries! I can buy anything I want! Ooh, cheesecake is $20 and ice cream is $5. I can get 10 desserts!” Therefore breaking it down weekly reigns in my inner child. $50 for groceries per week means that I can’t spend half of it on dessert. Transferring the amounts weekly keep me honest, I’m not tempted to spend just a few dollars more as I know that I don’t have just a few dollars more. To get the extra funds I need to go home and transfer the funds. That’s a lot of work for something that’s not going to greatly improve my standard of living and take me further from my goal of paying off debt quickly.

Savings

I’ve always had a problem with how to track my savings. I now just track the total in the savings account at the end of the month. This way when I take out money to fix the car it doesn’t hit my budget line and make me feel as though I have gone over budget.

How do you budget? What systems and tools do you use?

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2 thoughts on “How do you Budget?

  1. Well done. That is a great system you are following. I budgeted as you are doing until we paid off our mortgage. Now my objective is to keep my credit card at zero, use a line of credit for big items and ensure that I pay a certain amount to my line of credit and in my savings monthly. I follow my bank account regularly to ensure everything is okay. I am somewhere between 3 years and 10 years from retirement so most of my most critical lifetime savings are in place. I don’t overspend, so I don’t worry anymore.

    Liked by 1 person

  2. Pingback: Assessing the Month – Saving Without Scrimping

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