More budgeting questions

[Night Elf]

What categories do you budget for each month?

 

How did you decide how much to budget in each category? By percentage of income?

 

For groceries, do you budget different for food and other things like household products, paper products, hygiene, etc?

 

What do you do with leftover money not spent in a category?

 

What do you do when you run out of money in an important category, like car gas or food?

[Zinnia]

It takes a while to get the numbers right. When I shift my numbers, I go on historical averages (how much did we spend on food last month), and then how much we want to go up or down.

 

I do food (all grocery store, paper, toiletries, eating out), car gas, tithe, and mortgage as the non-negotiable off the top.

 

Next category is debt. Extra on debt. Then utilities. I combine gas and electric because they balance each other out depending on winter/summer.

 

Next I do savings. Retirement is taken out off the top, but stuff like saving for a new fridge or car.

 

Next is the stuff that is more variable. I have a household category that is too big and needs to be broken down more. I think it needs to go into repairs, home decorating, gifts, garden, and other. Clothing. If we have enough, I do an eating out for entertainment section. Entertainment (which for us is tivo, netflix, redbox chiefly, but we also do date nights in this). Little league. Homeschool. Vacation. Christmas. I am sure I have more but I can't think of them.

[JustEm]

I decide categories depending on what we need that month. I always set the savings amount first, it is always 10-20% of dh's paycheck. Then I do all the bills(mortgage, electric, HOA dues, internet, water, cellphone) as separate categories. Next is groceries. Everything I buy at the store is groceries unless I'm buying it for a party or potluck type function, then it is entertainment. Gas and car maintenance next. Then whatever is left gets split between family entertainment, individual entertainment, gifts and my miscellaneous category for anything we forgot.

 

If there is left over in anything then that goes into savings or it goes into a separate account specifically for that category. For example, car maintenance goes into an account that we only tap into when the car needs maintenance. But the extra a lower than normal electric bill goes into savings.

 

If we are set to go over in groceries I have to evaluate if it is really a need to going shopping or just a convenience so we can get the foods we want to eat regularly. For example, I never really NEED milk or bread so to go over budget for that wouldn't happen. But if we are out of veggies and all sources of protein then a grocery trip is a need.

 

If we run out of gas money we don't use the car. This works fine because dh works a mile away from home. We never run out of gas money and usually only spend half of what I allocate to that category.

 

I very anal about our budget because we are a big family working with a small income. If we had a bit more money I would be so anal about it.

[HomeAgain]

What categories do you budget for each month?
House (rent/mortgage)

internet

natural gas

electric

water/sewage/trash (all in one)

car

phones

insurance

gasoline

food

allowance

savings

Christmas/gifts

family needs

spending money
 

 

How did you decide how much to budget in each category? By percentage of income?

I looked over our spending for 3 previous months to get a good estimate of how much we were actually spending.  Taking that as a starting figure, I was able to cut down or increase over time depending on changing needs/prices of items.

 

For groceries, do you budget different for food and other things like household products, paper products, hygiene, etc?

No, it all goes in one envelope. 

 

What do you do with leftover money not spent in a category?

For cash envelopes I leave the money there or put it in a slush fund for when I've needed immediate cash (like when a child tells me 5 minutes before he leaves that oh, yeah, he needs that $40 payment now)

For variable expenses like electric, I roll it into savings or the car payment.

 

What do you do when you run out of money in an important category, like car gas or food?

If I do manage to run out, I move money from another envelope: usually cutting our spending money or 'family needs' money.  Then I go back and look through receipts to see where I might have mismanaged, or increase the budget for it next time.  We do a zero-budget, so every dollar is named and given a location.  Anytime we over spend in one category we have to shuffle a bit.  Thankfully after about 10 years of this method we are able to gauge our habits pretty quickly within a month or two of any major changes and have few hiccups.

 

ETA: I also don't create 1 monthly budget.  While I have those numbers available through the budget on my bank website, I keep an excel spreadsheet that breaks down categories into paychecks.  That way I know exactly what is coming out every week, when things are due, and how to adjust for dh's income fluctuation on a smaller scale.

Edited March 28, 2017 by HomeAgain

[Guest]

We don't use percentage of income to set budget, its needs and wants. after needs are budgeted wants are budgeted...we adjust by decreasing wants. Tuna instead of shrimp, delay replacing flooring, things like that. take a hard look at insurance, cable, internet, and garbage removal annually...all of these love to jack their price right before holidays.

[ScoutTN]

We use YNAB. Helps me SO much! 

 

 

[Night Elf]

I'm looking at my past categories and don't remember my reasoning. Another one that I'm wondering about is how to handle dd away at college. I pay for a lot of what she does and I'd like to know exactly what that is exactly. I'm wondering if she should be her own category. I probably don't really want to know how much we spend on her. Ugh!

[xixstar]

I use YNAB and we budget every dollar that comes in. If we overspend in a category it has to be removed from another category because it all has to equal $0 at the end of the month, it we don't do this, we have less money to budget for the next month.

 

We budget what we expect to spend that month - it isn't exactly the same every month because life changes. So this month we have some basic car maintenance that needs done that we didn't need to do last month.

 

We have a few "sinking funds" too. Expenses that are not monthly that but we need to allocate some money for each month to cover the expense - like buying fuel oil to heat our house, we save some each month so we can pay for delivery.

 

If there is money leftover, it will either be allocated to an area we over spent or I will carry it over to the next month. So if I budget $200 for gasoline and only spend $150 - next month I will budget $150 and the unused $50 will still be there to make $200 available again.

 

I budget for the current month using last month's income - so all the Feb paychecks are what we are spending right now. This means on the first of the month I can pay all the bills or buy all the food and not be waiting for a paycheck to see if I can buy something. This was my favorite YNAB principal from years ago, it's far more stressful for me to budget and know what I can spend but only when the right check comes in.

 

And for groceries, it is mostly only food because I don't buy toiletries at the grocery store. But sometimes a case of motor oil gets picked up while doing a Costco run and I don't bother to separate it out.

[xixstar]

I'm looking at my past categories and don't remember my reasoning. Another one that I'm wondering about is how to handle dd away at college. I pay for a lot of what she does and I'd like to know exactly what that is exactly. I'm wondering if she should be her own category. I probably don't really want to know how much we spend on her. Ugh!

I am constantly rethinking my categories. I'll try to list mine later when at my computer. Too much to enter on my phone.

Edited March 28, 2017 by xixstar

[mamashark]

What categories do you budget for each month? food, gas, car insurance, health insurance, life insurance, pets, "other", rent, cell phone and I'm sure I'm forgetting something. (right now we are living on a minimal budget because we don't have full-time income. When we get a new job we'll add things like savings, and in the past we've had categories that we added money to each month like car repair.)

 

How did you decide how much to budget in each category? By percentage of income? Based on the billed amount (insurances) or based on the minimal amount possible to live on. When we have fullitime income again I'll add a little to make it less stressful (so instead of 600 for food I might budget 700 to include a date nights, or something like that)

 

For groceries, do you budget different for food and other things like household products, paper products, hygiene, etc? Right now food is just food. In the past I've combined household items.

 

What do you do with leftover money not spent in a category? Right now any leftover money covers any overages - we had a birthday in the family in March so that was covered by extra gas money. In the future, when we have fulltime income, we will save extra money for special things. So extra gas money will mean a special trip to grandparents and extra food money will mean a treat (maybe hotdogs for lunch or ice cream or something)

 

What do you do when you run out of money in an important category, like car gas or food? I look at how I spent money that month and work to make it better the next month. Right now I'm tracking food prices and carefully menu planning to keep our food to $600 a month even with me eating gluten free. It means careful food selection and meals that stretch. We will choose to not go places if we run out of gas except for necessary trips (like to work or to the store for food). In general we look at lifestyle changes if necessary to reduce our spending in a category if we go over.