How I Budget
I was trying to think of a good blog post about budgeting. Some unique angle I could take to talk about how I manage household expenses. But I came up stumped.
I suppose it’s kind of funny to say that I don’t really have any super insanely awesome recommendations for how to budget your monthly household expenses. This is one of those chores that I don’t necessarily think can really be glamourous.
But it can be fun. And it can be pretty easy.
I do use a combo approach to budgeting, so I can describe that here for all you other basic bitches. I think it’s pretty simple, too. So that’s probably a bonus.
There are only two requirements for the way I budget:
- An excel spreadsheet
Way back in the day when my husband and I first moved in together, I made a household budget in excel. We had to deal with his student loans, my grad school (which we paid for out of pocket) and a rescue dog with a lot of health issues. I figured that mapping out what we spent each month was probably pretty important.
After much googling, I settled on something pretty simple. I really have not changed much of this template in the last 10 years or so. The only thing I’ve added is the break down to our different savings goals.
Here’s a quick screen grab of my blank budget sheet (sorry for the shitty quality, but you can download the actual spreadsheet here.
You should see some savings goals that look familiar to you if you’ve read my Smarty Pig post, but most of this is pretty straight forward.
Let’s chat about the categories I budget for:
Under Income to the right, I include both my husband’s and my monthly income from our primary, full-time jobs. I also have a side-job that is slightly variable in income and most of that money gets booted right to savings when it gets paid out. The exception is that sometimes we use those sporadic pay checks for a large project. For instance, I got LASIK this year and I was able to pay for it completely out of my side-hustle work instead of bankrolling it into our regular monthly income.
I also include our rental property income here. I’ll talk more about this in another post, but like so many folks who bought property right before the housing market blew up in a ball of fiery doom we are underwater on our first property. A starter condo we bought when we were fresh out of college and super impressionable.
Under the “Housing Expense” category I include both our homes (primary residence and rental condo), as well as a set amount each month for “house projects.” Sometimes this is things like calling an electrician to replace our outlets with cool USB ones, but it’s also known as the decorating category. I also bundle our insurance for our home, cars, and hobby riders and pay that monthly. I hate getting that big check twice a year so I just asked nicely if they could bill me monthly and set up an auto pay for that.
Utilities are pretty straight forward. You can read about how I flipped out about our monthly TV bill here – but most of this is as whittled down as it can be when I way our wants vs. our needs.
Once again, I’ve spoken about our cars before – yes, all three of them. As you can see, we currently have two car payments going as well as a Smarty Pig for the next car we hope to buy. Our interest rates are super low on both these loans which is why we’re okay paying monthly and not throwing those extra savings straight at the loans.
FOOD & DINING
Oh man… this one hurts. We are just two people and yet… somehow we spend an incredible amount of money on food each month.
Like an embarrassing amount. Maybe one day I’ll break that down for you here, but right now I just cringe thinking about it.
Anyway, I tend to track our food consumption in two ways: grocery shopping and eating out. We eat out a lot. Mint is always telling me we’ve exceeded our Food & Dining budget.
This includes a few things including food and treats for two dogs, medicine for our heart-dog, and a dog-walker that comes three days a week.
Yes, the dog walker is a luxury. But it’s not an expense we’re willing to cut right now as our dogs are our babies, so they deserve some luxury too.
This is one of those catch all categories that includes things like going to the movies or a play, but also hobby stuff for my husband and me, or a day trip to a fair. Stuff like that. I could probably break this out a little bit better.
Yikes. So… the only way I don’t go over on my personal spending is with a cash envelope system. The problem for me is online shopping. That’s a whole other post of its own, but I am an Amazon junky and that “Buy now with 1-click” button is constantly calling my name.
My husband does great in this area and rarely spends more than his allotment. Me… well…
This is broken out further in the box on the right when I look at overall savings goals and specific Smarty Pig goals.
One things I should note here is that this budget does not contain any notes on our retirement or investment savings. All of that money is taken out of our paychecks before we even see it and is not even included in the “Income” portion of my spreadsheet. I just pretend that money does not exist when it comes to monthly expenses. We put about 30% of our income straight into retirement and investment accounts right away each month.
A couple of other notes about my breakdown of categories – there are a few categories that I don’t usually break out separately. For instance, I include things like haircuts or pedicures in personal spending (though you can definitely argue that they should be their own line item) and I don’t usually break out things like shopping for gifts or other stuff like that. Most of the time, we have plenty of money left over to bankroll those kinds of things that crop up each month.
I also do not include doctor or dentist appointments here. We are lucky to have very good insurance with small to no co-pays and so I usually bankroll that each month. It’s either paid out of excess income or personal spending.
We don’t budget to zero. There is some wiggle room built into this budget for things like unexpected vet appointments (ugh, last month we spent $1,100 at the vet!), tolls for my long commute (that should probably move to Auto, though), those gifts I spoke of above, and other random expenses.
It’s possible, now that I’m writing this, that budgeting to zero would help me on staying in check when it comes to my personal spending category, though. Something to consider going forward.
So, now that I’ve broken out my categories for you, how do I use Mint in conjunction with my spreadsheet?
Truly, the spreadsheet is just a tool for a very quick overview of monthly and recurring expenses.
I use Mint.com to really get into the weeds of each category. For instance, I used Mint to realize that I was spending an exorbitant amount of money on Thai food each month (my favorite!) and that since my husband doesn’t even like Thai food I should be pulling that money from my Personal Spending and not from our joint Food and Dining category.
Towards the end of the month, I’ll see where we are in danger of going over spending (mostly food, mostly personal spending) and pull back the reigns a bit. I’ll suggest we make our lunch for a week or I’ll brew up a pot of iced coffee for my morning jolt and that will help us stay on track.
I can also use Mint to watch for trends in our spending. Why did we spend so much in July, for example? Oh, because both dogs needed their yearly check-ups plus our heart-dog needed a specialty treatment. That helps me plan better for things that might crop up NEXT July (like those yearly check-ups) so that we don’t end up pulling from savings for something that should be factored into our regular old living expenses.
Does this help anyone? Do you have any questions or comments about my budget? Sound off in the comments below!