Creating a budget was one of the first things we did when we started getting serious about our finances.
Confession: for many years, I didn’t have a formal budget. I knew when I got paid, made note of how much and then tried to keep track of it in my head.
It worked well until we started getting serious about paying back debt.
Our budget is a simple spreadsheet. No bells or whistles; just a document that outlines all our expenses and spending for the month.
Well. Most of our expenses.
There are five specific categories we skipped when creating our budget, even though we do spend money on them regularly. Here’s what we left out and what we do instead.
Creating a budget: Five lines we don’t include in our spreadsheet
Our budget includes several fixed expenses that we spent on every month.
However, there are five categories we left our when creating our budget spreadsheet.
- Groceries
The most obvious exclusion — and the most expensive non-budget line.
Why we left it out of the budget: Our grocery spending varies significantly. We spend between $90-$150/week on groceries, depending on what we’re out of and what’s on the meal plan for the week ahead.
Note: we include household items, like paper products, cleaners, lightbulbs, etc., in this category.
- Gas
We have a car — a 2010 Toyota Corolla — that we fill up about once a week.
Why we left it out of the budget: Much like our groceries, the amount we spent on gas per week varies. A fill-up can range from $35-45 depending on the price of gas. And while we typically fill up once a week, sometimes we have to top up early, depending on what we have going on.
- Personal Grooming
This includes things like hair products and appointments, shaving supplies, deodorant, etc.
Why we left it out of the budget: Honestly, the main reason this does not have a line of its own is because I am very specific about the products I use. As a result, I opt to use my personal spending allowance money to cover these costs. That covers most of the spending in this category, as Jeff’s needs here are typically, much more affordable.
- Clothing
This includes outwear and footwear.
Why we left it out of the budget: Much like personal grooming, we both cover clothing purchases out of our personal spending allowance.
- Pet Care
We have two cats, which means we regularly purchase things like cat litter and food. We also take them to the vet regularly.
Why we left it out of the budget: These are more irregular purchases for us. We buy our litter in 50 pound boxes from Costco and purchase the largest bag of food, which means we only need to stock up every couple months. When it’s time to buy these things, we build it into our plan for the week. As for vet appointments, we stash cash away every pay day in a sinking fund.
How we budget for variable expenses
Clearly, the items above are things we spend money on on a semi-regular basis. Conventional budget wisdom says they should have their own line in our budget, with a designated amount for each interval. This method of budgeting works really well for many people, but it never clicked for us.
So we take a difference approach.
Instead of separate lines for these expenses, we have what we call our miscellaneous budget line.
The last line of each weekly column, it’s generally calculated and filled in after funding for all the other budget items is assigned.
Most weeks, this comes in around $250, but it does vary from time to time (for example, if we need cat food).
We have been doing this for a couple years now and, while it’s not a perfect system, it has worked well for us generally speaking.
Why it works for us
The miscellaneous line benefits us in three key ways.
- It forces us to put our priorities in order
Making sure we have food in the fridge and gas in the car typically top the priority list. The other items shift as we think about what we need — and what can wait.
- It prevents wasteful spending
By including necessities like groceries and gas in the miscellaneous budget line, it forces us to think about our purchases, determine if they are worth it or not, and if they are, figure out how they fit in the budget.
- It allows flexibility
Not assigning fixed values to these items allows us to be flexible with our spending on week over week.
For example, on weeks when we buy cat food, we make a meal plan that allows us to spend a little less on groceries. If we know we have a busy week of travel, we might hold onto a little extra for gas. Keeping this category flexible makes sticking to the more strict areas of our budget easier.
Factor in our personal spending allowances and most weeks, the miscellaneous line serves us quite well.
Final Thoughts
Creating a budget that works for you is important. For us, delegating variable spending to the miscellaneous line has generally worked well.
That said, it’s not a perfect solution.
From time to time, we need bananas or milk or dish soap but all our money for the week is gone. And in those cases, I’ll be real: we take out the credit card. But these charges are never anything significant — and are always paid back the following week.
It’s also unlikely to work for us forever. And that’s OK. It makes sense that, over time, it may be necessary to adjust and change the system.
For now, though, our miscellaneous line helps keep us sane as we follow the otherwise strict and regimented process that will one day result in financial freedom.
Are there any lines you leave out of your budget?
Photo by Matthew Henry from Burst
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