Budgeting money is boring, right? No way!
We do our best to make it fun to budget money by focusing on our goals and what we want to accomplish by way of our budget, rather than focusing on the activity itself.
Truth by told, I actually look forward to budgeting money now because I see the results. Because we budgeted our money, we were able to make the changes necessary to get out of debt.
Let’s dig into how we budget.
Household Budget Tools
We’ve used three different tools for budgeting money over the years.
Last year, we used the Debt Free Guys’ spreadsheet to track spending in each category plus Mint.com, which made it easy to total our spending in each budget category.
Now, we’ve adapted their spreadsheet and made our own household budget spreadsheet. We’ve also left Mint and went to BB&T U. BB&T is the bank we use for checking and they have a suite of tools similar to Mint with the ability to connect to our credit cards. Between the issues that Mint is having with access and the desire to reduce our digital footprint, it makes sense to get rid of Mint.
As a result of the switch, we have an opportunity to set up a more finely-tuned system for tracking our spending. Switching to a new platform is like getting a do-over. In this new system, we’re leveraging a category/sub-category system.
Here’s what’s not represented in our budget…
- Our automated transfers to our savings and investing accounts transfer a portion of our income on the first of every month so that we always “pay ourselves first.” The exact amount each month varies wildly because of annual expenses (like car insurance), Garrett’s bonuses, and business income.
- Charity. We donate and that’s all the more we’re going to share for lots of reasons.
- We continue to mow our grass and shovel snow.
- Since I work from home, our business pays for most of the Internet service and my cell phone (the personal portion is handled when we file taxes).
- We’re debt free, so no mortgage payment, car payment, etc.
Weekly & Monthly Household Budget Procedures
To keep us on track, we have weekly budget meetings on Saturdays. We use this time to recap our spending for the week, discuss upcoming expenses, and to say what we’re grateful for.
Every month, we take our spending totals from BB&T U and put those figures into our household budget spreadsheet so that we keep track of historical spending to see if there are any trends. Then, we use the household budget spreadsheet to estimate our upcoming expenses, which we put into BB&T U to create the monthly budget.
Annual Household Budget Procedures
At the end of the year, we review spending totals in the DFG spreadsheet and then we check that information against BB&T U to make sure that our totals are correct.
To get ready for the next year, we copy/paste the spending totals from the 2018 spreadsheet into the 2019 spreadsheet. Then, we try our best to anticipate upcoming expenses. For example, we expect our property taxes and insurance bills will increase, so we’ll update the 2019 spreadsheet with new estimates.
Here’s our annual budget for 2018.
|Automotive Expenses / Repairs||$2,200||repairs and maintenance, like new tires|
|Automotive Expenses / PennDOT||$72.50||vehicle renewal and one driver's license|
|Automotive Expenses / EZ Pass||$210||tolls|
|Automotive Expenses / Fuel||$2,400||gas|
|Personal/Family / Clothing||$500||new socks and whatnot|
|Personal Family / Supplies||$1,200||varies sundries, like soap, toothpaste|
|Personal Family / Personal Care||$180||(4) haircuts|
|Utilities / Electricity||$1,153||small house is 100% electric|
|Utilities / Water||$727||small house water and sewer bills|
|Utilities / Garbage||$180||small house curb-side service|
|Utilities / Phone||$475||Garrett's phone bill|
|Insurance / Home||$426||small house|
|Insurance / Automotive||$1,094||Volvo insurance, which includes necessary commercial coverage|
|Health / Medical||$1,000||copays, coinsurance|
|Health / Fitness||$1,095||climbing gym where we go bouldering|
|Rent / Storage Unit||$2,101||where we keep the teardrop camper|
|Pets / Supplies||$1,200||cat food, litter|
|Pets / Vet||$500||vaccines, flea & tick prevention|
|Taxes / School Property||$3,000||property taxes|
|Taxes / Federal||$1,000||estimated federal tax due for 2017 (additional to withholding)|
|Taxes / State||$400||estimated state tax due for 2018|
|Taxes / Local||$70||estimated local tax due for 2018|
|Entertainment / Restaurants||$300||we're going for a major cut here|
|Entertainment / Entertainment||$375||movie rentals and whatnot|
|Entertainment / Travel||$2,800||(5) trips planned|