Budget categories

[niccig]

I’m setting up YNAB. If you have a budget, what categories do you have?

I have a list of things I want to get for the house Eg couple new beach towels, kitchen items. I’m in no hurry so just waiting until I see something I like. Do you have a line item for these kind of purchases or are you more disciplined and plan out what you’ll buy for the month. I’m more a planner, DH is more a “let’s get that” without planning - Eg he’s wanted some cushions for sofa in his office at work for several months and saw 2 at Target he liked, $40 total. I want to make sure there’s some flexibility, but not too much. Maybe I need a line item for “misc” for these kinds of things. If he can’t get on board, this won’t work


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[abh5e8]

I found a misc category was a black hole. Lol. I have a household category, for things like basic toiletries, paper products, cleaning supplies, etc. If I want something decorative for the house, I usually wait till the end if the month and if there is money left I household category, then I buy it.

Here are my big categories and in parentheses each line under that heading:
Charity (tithe, 1 specific charity we give to, other)
Debt (student loan)
Food (grocery, family dining/restaurant, bulk food)
Housing (mortgage, electric, internet, cell, phone, garbage, propane, home repairs, lawn & garden)
Farm (plants, animals)
Transportation (gas, maintenance/repairs)
personal (life insurance, household, clothing, books/edu, medical, pets, childcare, haircuts, fun money for me and dh)
recreation (kids activities, dates, exercise)
short term savings (christmas, gifts, vacation, car insurance)
long term savings (retirement, college, new car)
taxes

so all together we have about 40 categories, which seems like a lot. one of the hard parts for me starting out, is deciding where to put certain expenses and being consistent. for example, eating out on vacation goes under vacation but eating out at home goes under dining. my make up and expensive shampoo goes in my personal money but kids and dh cheaper shampoo goes in household.

we put money into several things each month, like car and home repairs and christmas, so that when a repair is needed we have money set aside.

I don't think there is a right or wrong way to set it up, but rather just try to find a way that makes it easier for you to track your spending and stick to your budget (I'm assuming that is your goal).

If there is money left over at the end of the month, i usually bump it forward to the next month and then I have to put less into that category for the next month. say I budget $500 for groceries but only spend $450, that $50 moves on and then I just add $450 to the budget. The extra $50 I can put somewhere else. For me, the process of moving the money I save each month into a savings category is very motivating! I often make small savings goal categories and then clear them out after I purchase the item. (ie. new patio furniture).

Feel free to pm me with any specific questions.

[gymnbomb]

We do not do YNAB, but we do a loose version of an envelope system with separate accounts for each category. Our categories are: major vehicle expenses (repairs, downpayments, etc. not just routine gas and oil changes), daycare, vacations, savings toward downpayment for next home, emergency fund, a "fun money" slush fund for each of us, big home projects (building a deck, replacing a dishwasher, etc.), retirement (401k/403b/IRA), and our general household checking account for everyday living expenses. Each time we get paid money is automatically transferred into each of those. I don't worry about specific expenditures as long as there is enough money in the right account to pay for it. Our only debt is our mortgage which we don't want to pay down more quickly since we plan to move in 2-5 years, otherwise we would probably budget some things differently.

[niccig]

Thanks for the replies. I’m just trying to think through how to manage some categories, it doesn’t have to be YNAB specific advice.

I can see how a slush fund is dangerous but I think I need something to cover smaller purchases I didn’t plan for. Personally, I’d plan for everything as I’m type A.


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[Snow mom]

Here are my categories with sub categories:
Food (groceries, out, alcohol)
Personal items (toiletries/cleaning, clothing, shoes, pets, electronics, toys/games, hobbies, memberships)
House (maintenance, furniture/kitchen, yard/garden, utilities)
Transportation (maintenance, car payment [this will switch over to saving for our next car], gasoline)
Large expenses (medical, insurance, taxes, IRA)
Charity
Activities (extracurriculars, vacation, entertainment)

For a lot of these categories I've decided what a reasonable yearly budget is and then divided by 12 to get a monthly budget. So $600/year works out to $50/month for example. I don't worry about spending the exact amount each month--some months I'm under and some I'm over, especially in categories that are spent less frequently and in larger amounts. All my lines add up to our approximate income so that is a guide for how much we can spend/save. My goal is that over the course of the year our categories will average out to the budgeted amounts. If I'm averaging high per month in a category I know I need to cut from somewhere else to add to this line or need to readjust my spending in that category.

[hillview]

Expenses (this is my minimum monthly expenses and are funded first)
- Groceries
- Dining Out
- Stuff I Forgot
- Car Gas
- Household Items (I create wish list items like new shades and once funded i move that money into this category and then delete the shades item)
- Afterschool Babysitter
- Tutoring
- House Cleaner
- Gym
- Giving (charity)
- Subscriptions
- Loan
- Allowances
- Netflix/NYT/Music
- Utilities
- Braces
- Private school
Payments Due Later
- Insurance Home
- Water
- Insurance Car
- Tax Excise Car
- Insurance Life
- Insurance Umbrella
- Tax Property
- Tax State and Federal (DH does consulting)
Monthly Savings
- Paycheck (holding for next month)
- Business Expenses (slush fund to pay out of pocket before work pays me back)
- Retirement Savings
- Medical
- Christmas
- Date Night
- Kids Fees
- EZ Pass (for the car tolls)
- Dog Grooming
- Car Maintenance
- House Maintenance
- Vet
- Personal Care
- Gifts
- Clothing
Wish Farm
- Beaches vacation
- Blinds in office
- House painting
Emergency Fund

[niccig]

Thanks all. This really helps me to figure it out.

I decided DS needs to learn to budget too. I’m going to give him set amount beginning of month to cover drinks/snacks as he walks home from school. He’s also getting a clothing budget.

Maybe he can be better than his mom and dad and learn how to budget before middle age!


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[hillview]

Thanks all. This really helps me to figure it out.

I decided DS needs to learn to budget too. I’m going to give him set amount beginning of month to cover drinks/snacks as he walks home from school. He’s also getting a clothing budget.

Maybe he can be better than his mom and dad and learn how to budget before middle age!


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That is a great idea!