At the beginning of the year, I decided to try and budget a little bit differently. We’ve always had a budget, but we weren’t budgeting for things like yearly expenses or even personal care or household items that we buy fairly regularly but not monthly.

So instead of just using the extra money to buy things like toilet paper or paper towels or vitamins, I’ve been setting aside money in our budgeting program to take care of these expenses. If I don’t need something this month, then that budget rolls over to the next.

After one month of running with this budget, here is my verdict.

I do not like it.

Nope. But that doesn’t mean I’m going to change it yet. There are two possibilities for why I don’t like. The first is obvious—it isn’t for me. The second is that I’m thinking I may just need to get used to it.

It probably doesn’t help that we’ve had a couple of large expenses over the past month. We are in need of some attic insulation. We also had about 10 shingles on our roof blow off thanks to a windy day a couple of weeks ago. Both of those are getting fixed for $1200.

On top of that, we had to put a little money into my car because a tire went flat and wasn’t repairable—plus an oil change. Turned out to be a little under $200. These were expenses that we usually don’t have (obviously).

So, yes. That’s not contributing to my love for the new budget at all, but we’ll see what happens. I’m going to give it three months and see what happens from there.

The New Budget

I’ve read a lot of places that giving every dollar a job is a good idea with budgeting. That has never worked well for me. So I decided to give the current budget a try while still leaving myself a little wiggle room.

The old budget served us well. It helped us pay off $26,000 in debt within 11 months. It’s allowed us to take some great vacations to Disney World and Colorado.

Related:

But there were quite a few yearly and irregular expenses that were never accounted for in our budget. Every time one of those came up, I felt a little sting. Mind you, it wasn’t a big sting, but it was enough to where I’m going to try and budget for them to see if it feels better.

Here’s what our two budgets look like side by side. These are only the categories. Amounts have been concealed to protect the innocent. 😉

 

Old

Needs

Mortgage/Home Insurance

State Farm

Natural Gas

Garbage Disposal

Electric

Water

Cell Phones

Parking at train station

Life insurance

Food

Gas

Childcare

Donations

Wants

Netflix

Hulu Plus

Comcast

My Citi Card

Wife’s Citi card

Disney Vacation Club Monthly Dues

Wife’s Lunch Budget

Wife’s Hair Cuts

Date Night Dining

Family Dining Out

Saving

“Saving Amount”

New

Needs

Mortgage/Home Insurance

State Farm

Natural Gas

Tri-State

Electric

Water

Cell Phones

Parking at train station

Life insurance

Food

Gas

Childcare

Donations

Household

Home Repairs

Clothing

Personal Care

Car repairs

CrashPlan Backup

Vehicle Stickers

Wants

Netflix

Hulu Plus

Comcast

Disney Vacation Club Monthly

Wife’s Lunch Budget

Wife’s Hair Cuts

Date Night Dining

Family Dining Out

Daughter’s Allowance

Wife’s “Spend on whatever” budget

Wife’s Gym Membership

Debt

Christine Citi card

Christine Freedom Unlimited

Tim AMEX

Christine Freedom

Business

Hosting

Domains

Saving

“Saving Amount”

 

What We’ve Added and Why

As you can see, the new one is quite a bit larger than the old. We’ve added quite a few items. There are some good reasons why we’ve added the additional categories to our budget. Let’s look at exactly why we’ve added all of the extra categories.

Note: If you’re not curious about the details of the new budget, go ahead and skip to the next green heading to see my detailed verdict.

Under “Needs,” we’ve added:

Household

This category is stuff like toilet paper, paper towels, cleaning supplies, etc. This is a category that we used to use only when needed instead of setting money aside for it. We set aside $100 a month for this.

Home Repairs

This covers things like caulking, light fixtures, anything else physical in the home that needs repairing. As I mentioned above, this month we’re paying $1200 for some attic insulation and repairing our roof. It’s the first time we’ve had to pay for anything substantial in our home the past 4 years we’ve had it. We budget $100 a month for Home Repairs.

Imagine if I’d started this budget last January. It would have paid for itself and I wouldn’t need to use any of our emergency fund.

Confirmation to keep this one? I would say so.

Clothing

We don’t really buy much in the way of clothing—much to my wife’s dismay. 😉 Every once in a while, though, someone will need a new pair of shoes or new jeans or something. I figured we’d try and set money aside for those moments. We budget $50 a month for this. It isn’t a lot, but it will get us by with how much we spend on clothes (or lack thereof).

Personal Care

Toothpaste, deodorant, shampoo, conditioner, etc. All of these and similar things fall under this category. These are items (like our household budget) that we didn’t budget for before but bought every once in a while.

Trying something different and actually planning. $25 a month.

Car Repairs

This includes oil changes, new tires, or everything else needed to keep our cars. Running. We bought both of cars new (disgusted faces welcome) but we plan on keeping them for about 12 years. We’ll need to take care of them to do that. This is that budget.

I cannot use this money to buy a new car, even if there is eventually that much in this budget.

CrashPlan Backup

We live in a digital world. This helps ensure that all of our photos, videos, and important files are backed up to a secure server offsite from our home. $12.50 a month billed annually.

Vehicle Registration Stickers

Oh, vehicle stickers, how I loathe thee. Alas, what can you do? Instead of paying close to $110 twice a year for each of our cars, we budget $20 a month for this. That’ll leave us a little leftover. We’ll call that breathing room for when they inevitably raise the fee.

Under “Wants” we’ve added:

Daughter’s Allowance

This is for my older daughter. We’ve got a list of chores that she can do whenever they need to be done like keeping her desk clean, putting the clean garbage bags in the garbages, and putting the silverware away from the dishwasher.

We’ve read that a good starting point is giving them a dollar a week for each year they’ve aged. My daughter will be 7 this month. We give her $5 a week. We’re still working on a system to help her actually learn and save money. If you have any suggestions, please comment. I’d love to hear!

We’ll give my younger daughter an allowance in the next year or so.

Wife’s “Spend on whatever” budget

My wife’s favorite category. 😉 This is her money to do whatever she wants with. The main reason for this category was for my sanity. I have a problem with her spending money sometimes so we agreed to give her a budget that I cannot touch. Hey, I’m working on it.

She also deserves it for how much she works and does as a wife and mother. We budget $100 a month for this.

Wife’s Gym Membership

The last “want” we added is for my wife as well. Her friend owns a Crossfit gym so she has the opportunity to join at a discount. She and I are trying to get nice and healthy now so we can continue to feel good later. This is part of that.

It’s also a great opportunity for her to get out of the house and on her own for a bit. Did I mention how much she does as wife, mother, and employee?

For Debt…

I’ve moved debt out of the “Wants” category and into its own because I want to make sure it stays in focus. I’m pushing for us to get out of debt completely except for the mortgage this year. It’ll happen. We’ve added a couple of cards on here that we’ve been paying on for a while but were never “officially” part of the budget. Now they are tracked properly like everything else.

The Saving Category

Saving is a big deal for us. We put it on our sheet with all of our other budgets because we treat it like a bill. It’s a non-negotiable for us unless something major comes up. We have a certain amount that we put into savings every month. Most months we are able to hit it. I chalk that up to treating saving like a bill.

Business Category

The last category I’d like to call out are the business expenses. This is simply web hosting and domain registration for this website. As the blog continues to grow I expect there to be more expenses, but this is it for now. They are yearly expenses broken down into monthly.

The Good and the Bad

Right off the bat I can tell you that it feels amazing to pay for something, put the receipt in YNAB (You Need A Budget), and it not affect anything like savings or debt payoff because it’s already budgeted. I also like how much control it gives me over my money.

It almost feels like it’s too much control, though. I’m all for simplifying the process of personal finance because it makes it easier to manage. This did the opposite. I have quite a few more categories to manage than I did before.

I also don’t like what it does to my perception of the budget. This is another reason why I don’t like giving every dollar a job. It feels limiting even though it really isn’t. I feel poor.

Say I have $1,000 left over a month and decide to give every dollar or almost every dollar a job. Now it feels like I have $50, or $30, or even no money leftover. Granted, this is great for saving and paying off debt, but I don’t think is sustainable in the long term.

I would rather treat saving like a bill, put a certain amount in savings, budget for the extra categories, and then have a couple hundred dollars left over. I’m sure this is just a mindset shift that I’m in need of but I don’t like to budget to where I feel like I have no money or breathing room.

The right budget will not make you feel poor. 

Do What Works For You

Over the years, I’ve tried out several budgets. Some of them worked well for me while others didn’t. That’s why it’s important to set your own budget.

Basically, what I’ve done with my budget is created an amalgamation of the different types of budgets I’ve used. So my budget is a combination of giving every dollar a job (but not quite every dollar), an electronic version of cash-only budgeting, and a budgeting style called the 50-20-30 budget. I haven’t stuck to one method.

I encourage you to do the same. Do what works for you. If you don’t like a certain part of a budgeting method, try taking it out and either replacing it with something else or leave it empty and see what happens.

Don’t Be Afraid to Fail

This isn’t the first time I’ve tried to do something different with my budget and it won’t be the last time I change it up. Something I used to struggle with—and still do from time to time—is not wanting to change my budget for fear of doing something wrong or losing money.

I can tell you from experience that failure is not something to be afraid of. It may seem scary, but when you compare to what failure may look like up front to what you learn from it on the back end, it’s almost always worth it. In fact, I say almost always just in case I ever come across a time when it hasn’t been worth it. To this day, I have not come across a time when failure hasn’t been worth it because you can always learn something.

I mentioned that I had a $1,200 house repair bill this past month. That bill and the need for repairs came less than a month after I started the new budget with the additional categories. It could not have been worse timing. I would go as far to say that it’s exactly what I had feared would happen. As soon as we set money aside for all of these extra budgets, something big happens.

Now it’s over and guess what. It wasn’t nearly as bad as it looked going in. I was worried about finding the money to pay for it, but everything turned out fine. We ended up having to use a little of our emergency fund but that’s exactly what it’s there for.

Change Up Your Budget

I want to encourage you to make changes to your budget if you need to. If there is a certain part that isn’t working for you, try something different. The worst that could happen is you lose a little bit of money or have to use your emergency fund.

I can guarantee you that it won’t be as bad as your brain—or mine—can make it out to be.

Unless, of course, your budgeting change is to quit your job, not watch your spending, and effectively not budget at all. Then you might be in trouble. 😉

Have you changed your budget recently? Was it a major overhaul or just a minor change?

Join the conversation and add your voice in the comments!

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