As someone who has started a budget in the past and failed I can honestly say getting started can be discouraging. Yet think through these questions… If you did start and stick to a budget how much money would you save? How much better and more secure would you feel knowing where your money is going?
How many categories do I have now? I have two basic categories: Fixed (or Re-occuring) Expenses and Variable (or Fluctuating) Expenses.
Fixed (Re-occuring) Expenses
Rent/Mortgage
Utilities - Electric
Utilities - Water/Gas
Insurance - Health
Insurance - Car
Insurance - House/Rental
Insurance - Life
Medical - Dentist
Medical - Doctor
Savings
Giving
Variable (Fluctuating) Expenses
Food - Groceries
Food - Eating Out
Transportation - Gas
Transportation - Maintenance
Fun
Education (surprisingly not applicable to us right now)
Debt Reduction (surprisingly applicable to us right now as we have a mortgage since we bought a house last year and a 0% offer for 60 months on furniture we could pay off today if we wanted.)
Household items
When budgeting ask the following questions:
- Is this category too specific?
- Is this category too general?
- Is this category relevant?
- Does this category reflect my values?
- Will this category help reign in and keep track of my spending?
What do you think of dividing your budget into two groups with fixed and variable expenses? How many categories do you have in your budget? Leave a comment!
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