This month, we are going to add the element of budgeting. As my pastor likes to say, tracking is just accounting for what was spent, budgeting is telling your money where to go.
Budgeting allows you as a couple to decide your spending priorities, and then provides a measure to assess whether you are over/under on your spending targets.
Mortgage: this includes PITI (principal, interest, tax, insurance)
Giving: this is not really an expense but does represent our 2nd largest cash outflow category so I left a place holder here. We consider giving an investment.
Target/MISC: this includes household supplies, hygiene products, etc. We stocked up for several months anticipating going out less when our son was born. This is one category we really need to watch to make sure we are not just buying stuff! Beware Target’s siren call.
Restaurants: we were under budget this month on both restaurants and groceries due to my parents and others helping to provide meals for us after the birth of our son.
Pet: we boarded our dog for 4 days while we were at the hospital delivering Baby Cents!
Overall, November was a good month for us. We were under budget on our grocery and restaurant spending, which gives us leeway for December as we tend to go over budget on groceries in December. Fancy Christmas dinners and desserts. Anyone?
Our miscellaneous budget is a bit nebulous at this point, but we also find it difficult to budget every small category. $500/month is the average of what we spent last year per month after accounting for our regular expenses.
So let me ask you readers, do you budget each month or do you just account for your spending? If you budget, how do you account for the little categories that are not re-occurring expenses?