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I think for us the hardest part of starting a budget was our categorization, and our assigned estimations of needs. We started tracking our expenses in YNAB 5 months ago, but never really adhered to a budget. That made tracking useful, but when it came time to tighten the clamps because of a Job loss we found our categories were too vague and too varied. We'd chalk something up to a grocery run when it was actually personal goods and beer and pet food. For some things such as car maintenance it provided good estimates. In the end we had to start from scratch essentially. We created a long-long list of known expenses and literally took the list to wal-mart and did pricing per unit, estimated units per month, and assigned dollar amounts per item. On our spreadsheet we have a $2.80 entry for spaghetti pasta. This is off to the side and just helps us set our Grocery category budget as a whole. If we don't buy pasta, it frees up cash for other groceries. This pricing adventure took roughly 4 hours, for groceries and personal maintenance alone. So while there is something to over-categorizing, I think line-iteming known expenses (as specifically as possible) to create your top level categories is a big help. It helps me feel comfortable that there will be minimal surprises. Also, if we under budget, we can take a look at what was over-purchased or under-priced and add tangible dollars instead of just tacking on another 20-30 bucks. We can also add things on the fly if we know we want to do a cookout with friends mid-month and add steak and potatoes. People with big buffers surely can just use the general budgeting; we did forever. But when it counts getting down and dirty on the numbers and a big list really lets you prioritize your purchases.
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May 15, 2013 18:08
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| # ¿ Apr 28, 2024 08:01 |
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