Pages

Thursday, April 23, 2009

Thrifty Thursday ~ Variable Budget

Last week we took the first step in creating a family budget. How did you do? You may have found that it looks good on paper, but in reality you're struggling to make ends meet each month. Most of the time this is because of VARIABLE EXPENSES. A "variable expense" is one that does not have a due date but is a constant expense. This amount will naturally vary from month to month, but is a necessity. It is impossible to accurately budget for these items if you don't track your spending!

HOW TO DETERMINE YOUR VARIABLE EXPENSES
I created this simple sheet to track our variable expenses. Every time you spend money (that is not a monthly bill) you log it on this sheet. Keep this accessible and right when you get home enter your debits!

THE CATEGORIES
I find joy in the details, but my husband does not. In order to have us both involved in the family budget I created very broad categories to track our spending.

1. Fuel- This amount will vary depending on your region of the country, commute, etc. Track your spending and then increase it slightly to allow for fluctuations in the gas prices.

2. Groceries/Toiletries- $300.00 for a family of 4. Sticking to a budget in this category is a huge key to savings! I am embarrassed to admit that last year we averaged $660.49 per month. However, for the last 7 months I have only spent $300 per month! This is a savings of $4320 per year! It is not difficult. Simple menu planning, smart shopping, and coupons have been the keys to decreasing my spending. I share more details at my blog, Carolina Clipper.

3. Miscellaneous- For three years I allowed this category to be catch all. This year I decided to break it down a little further. You can see the subcategories on the budget. Medical, Auto, Home/Repairs, Clothes, Hair, Gifts, Other. In addition to listing the debit on the variable budget sheet I also indicate the subcategory.

4. Entertainment- Each week my husband and I get "blow money" that we can spend on whatever we want without accountability. The remaining money is for our date nights.

MAKING IT WORK FOR YOU:
When we first started we simply entered the amounts that we spent. I wish I could say that we stopped spending when we reached that category limit, but we didn't. We were tracking our spending instead of living by the budget. Don't make that same mistake! First, understand that for the first three months you're trying to discover the category amounts. They will most likely be more than anticipated. Remember, you want honest numbers. Once you get realistic budget amounts STOP SPENDING when you reach that limit. Finally, make the necessary sacrifices to stick to your budget.

2 comments:

Tami said...

Great advice and direction Richelle! For years my husband and I experienced conflict over the budget until one day I opened my eyes to see that God had created him and I with different strengths. While he was head of the household, I was the one with the affinity to detail. For years this made me 'in charge' of the money. NOT Good! Now I create the detailed budget using similar advise you have given and my husband makes sure all the bills are paid and the budget is followed. And the mad money...a must. Something about a little cash that is not designated to anything but what my heart desires (although...it seems my heart desires end up in my kids pockets more often than not!)

Carolina Clipper said...

Tami~ Many times my blow money goes to the kids too. I've often said I need more than my husband to make it fair :)