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March 16, 2018

Back to Budget Basics - Our Revised 2018 Monthly Budget

In our last post about our February spending, I mentioned some issues with our budgeting system and suggested I would update the budget to fix them. It was bothering me quite a bit, so I went ahead and tweaked the budget. Read on to see what it looks like.

There was no change to our overall budget for the year. What changed is how the spending was allocated for each month. I previously just divided the annual budget by 12 to get the budget for each month. The problem with that is many expenses aren't perfectly distributed throughout the year, but are lump sums. When those expenses occur, they make it look like we are over budget for the month when we really aren't, which annoyed me.

The solution to the problem was taking a little time to create a budget for each month and adding known large expenses to the appropriate months. I probably should have done this from the beginning, but I was being lazy. It also wasn't an issue before because I wasn't doing monthly budget reports, so I didn't really see the issue. Anyway, our new budget is more accurate and less aggravating to me on a monthly basis. Here's what it looks like:

Item
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Tot.
Groceries
458
458
458
458
458
458
458
458
458
458
460
460
5,500
Property Tax
-
2,700
-
-
-
-
-
-
-
-
2,700
-
5,400
Car
369
569
169
169
555
169
369
569
169
169
555
169
4,000
Travel
290
290
292
292
292
292
292
292
292
292
292
292
3,500
Bills/Utilities
290
290
292
292
292
292
292
292
292
292
292
292
3,500
Household
250
250
250
250
250
250
250
250
250
250
250
250
3,000
Dining Out
183
183
183
183
183
183
183
183
183
183
183
183
2,200
Home Imp.
125
125
125
125
125
125
125
125
125
125
125
125
1,500
Gifts
125
125
125
125
125
125
125
125
125
125
125
125
1,500
Entertain
90
90
90
90
90
90
90
90
90
90
90
310
1,300
Clothing
92
92
92
92
92
92
92
92
92
92
92
92
1,100
Cash
83
83
83
83
83
83
83
83
83
83
83
83
1,000
Home Ins.
700
-
-
-
-
-
-
-
-
-
-
-
700
Personal Care
38
38
38
38
38
38
38
38
38
38
38
38
450
Healthcare
33
33
33
33
33
33
33
33
33
33
33
33
400
Charity
17
17
17
17
17
17
17
17
17
17
17
17
200
Fees
13
13
13
13
13
13
13
13
13
13
13
13
150
Total
3,155
5,355
2,259
2,259
2,645
2,259
2,459
2,659
2,259
2,259
5,347
2,481
35,400
Big Expense
Miata Ins., Home Ins.
Sonata Ins., Prop. Tax
Truck Ins.
Miata Ins.
Sonata Ins.
Truck Ins.,
Prop. Tax
Water Park

Now that we have a more accurate budget, let's take a moment to see what our January and February expenses look like with this new budget compared to the old one.

Category
Uniform Monthly Budget
January Budget
February Budget
Original Jan-Feb Cum. Budget
New Jan-Feb Cum. Budget
Jan-Feb Cum. Spending
Groceries
 $       458
 $        458
 $       458
 $     917
 $     916
 $     1,257
Property Tax
 $       450
 $            -  
 $    2,700
 $     900
 $  2,700
 $     2,896
Car
 $       333
 $        369
 $       569
 $     667
 $     938
 $     1,885
Travel
 $       292
 $        290
 $       290
 $     583
 $     580
 $            -  
Bills/Utilities
 $       292
 $        290
 $       290
 $     583
 $     580
 $        881
Household
 $       250
 $        250
 $       250
 $     500
 $     500
 $        226
Dining Out
 $       183
 $        183
 $       183
 $     367
 $     367
 $        529
Home Improvement
 $       125
 $        125
 $       125
 $     250
 $     250
 $        268
Gifts
 $       125
 $        125
 $       125
 $     250
 $     250
 $        137
Entertainment
 $       108
 $           90
 $          90
 $     217
 $     180
 $        320
Clothing
 $         92
 $           92
 $          92
 $     183
 $     183
 $           73
Cash Withdrawals
 $         83
 $           83
 $          83
 $     167
 $     167
 $            -  
Home Insurance
 $         58
 $        700
 $           -  
 $     117
 $     700
 $        725
Personal Care
 $         38
 $           38
 $          38
 $        75
 $        75
 $        120
Healthcare
 $         33
 $           33
 $          33
 $        67
 $        67
 $     1,040
Charity
 $         17
 $           17
 $          17
 $        33
 $        33
 $            -  
Fees
 $         13
 $           13
 $          13
 $        25
 $        25
 $        147
Total
 $   2,950
 $     3,155
 $    5,355
 $  5,900
 $  8,511
 $  10,504

If you took the time to look at all the numbers up there, you can see that instead of being about $4,600 over budget for the first two months of the year using the old budget, we are only about $2,000 over budget. It's still not great, but it's a lot more accurate.

We'll go forward with this new budget for a while and see how it works. Hopefully, no major changes will be necessary.

How do you plan for big expenses in your budget? Let us know in the comments.


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