Budget Categories

[cjsmith]

I started "tracking where every penny goes" in early 2004. (I put that in quotes because there are times I've screwed up; I am currently missing a little over $200. But in the grand scheme of things I'm really not doing all that badly.)

I'm still reworking my categories for expenses. The more accurately they reflect my motivation for buying a thing, the better will be my ability to make budget decisions.

I just created a new category: Social Life. The bottle of wine I bring to a friend's party is not under Groceries:Wine, because I'm not buying it in order to have wine to drink. The pizza I order for the friends watching a movie at my house is not under Dining Out:Dinner, because I never order two large pizzas for dinner. These things are expenditures I make for their value in my social life. When I look at the budget later, instead of saying "Yikes, no more $45 meals", I'll probably say "ah yes, those items there are worth it".

Comments

[hitchhiker.livejournal.com]

that's a neat idea!

[cjsmith.livejournal.com]

The tracking, or the new category? :-) I find I learn more about why I spend as, over the months and years, I recategorize.

[hitchhiker.livejournal.com]

the new category. the tracking is a good idea too, but i already knew you were doing that (:

[layer.livejournal.com]

of course you could also let your friends help pay for the pizza and enjoy both the social life and the cash savings. :)

[cjsmith.livejournal.com]

Or I could go to a party at my friend's house and eat a meal's worth of pigs-in-blankets. It all balances out somehow! :)

[cjsmith.livejournal.com]

(p.s. and even if it doesn't all balance out, it's still worth it! Yay!)

[butterfly-smile.livejournal.com]

It is scarey sometimes.
I was really good for awhile and need to get back into it.
I have no idea where are my money goes.
I guess it is time to get quicken

[cjsmith.livejournal.com]

I kept track with a spreadsheet for a while, and I'm *really* happy I got Quicken. It's a whole lot easier!

[ohhjuliet.livejournal.com]

I'm trying to be (a lot) better about my finances. I sat down and made a "budget" the other day (what I bring in weekly and what I must pay out weekly) and I'm totally alarmed at the amount of money I can't account for. I'm curious, how'd you determine the categories, etc., and do you give yourself an allowance or do you just mark down what you spend and look back on it later and say... yikes!

???

[cjsmith.livejournal.com]

I determined the categories over time by watching what I spent. For example, I started with "food". I thought about whether that would help me decide where to save. I broke it down into "dining out" and "wine" and "meal food" (like chicken breast or veggies) and "snacks". It wasn't at all important to me that the categories be perfect at the get-go. It was fine if they slowly got better over time.

I just mark down what I spend and then look back on it later. The PLAN is that I say "yikes" and make changes for the future, but I haven't got to that part yet. :-)

[platypus]

I don't know... a bottle of wine and a couple of large pizzas is starting to sound good now.

[cjsmith.livejournal.com]

It does sound rather tasty! What is it about reading food-related stuff? I can get so hungry reading LiveJournal. :-)

[johnreen.livejournal.com]

I've decided to start doing that this year... I just haven't decided on the software used to track it.

Right now, all I have is a nice pile of organized receipts... and, of course, the categorization-fu will come later.

[cjsmith.livejournal.com]

I hear ya. I started with a spreadsheet, one row per day and one column per category. It was a nice coincidence that when the categories were getting annoyingly multitudinous, TurboTax and Quicken had a deal where you could buy one and get the other nearly for free. Ka-ching!sold! :-)

Tracking encourages me to use credit cards more often and cash less often, because I don't have to write things down myself / keep receipts / etc or risk forgetting. This bias toward plastic would be a minus for some people. So far I'm fine with it.

[johnreen.livejournal.com]

Ka-ching!sold! :-)

Being anti-Windows, that mostly leaves me with GNUCash... although, there are others programs that are relatively simple that would do mostly what I want to do (see how much money I'm actually spending on various things...)

because I don't have to write things down myself / keep receipts / etc or risk forgetting.

I still keep receipts and reconcile them with my monthly CC statement... but maybe I'm anal. I've been eyeballing it up until now ("oh, I remember making that purchase").

The way I do (what amounts to petty) cash is I keep the ATM receipt for the money I took out (which I keep to reconcile that they docked my account correctly), and then I write on the back of that what I spent the money on. I always round up to the nearest dollar (and random change goes in my penny jar... which needs to be taken in now... last time I did it, it was like $150 in change), then when it's gone, I take the receipt out and categorize the expenses... at least, that's what I've started trying to do.

[ambar.livejournal.com]

I'm pretty good about tracking my expenses. My categories could definitely stand an overhaul of the kind you describe, though -- you should have heard me explaining the distinction between "Dining" and "Groceries" to elflet the other day. :-)

[eichin.livejournal.com]

I'm imagining an explanation that starts with Miss Manners' bit about how dating involves entertainment, affection, and food, and where on those three axes the expense occurs :-)

[cjsmith.livejournal.com]

Interestingly, Quicken has no premade category for affection. I suppose Mustang Ranch is "entertainment".

[ambar.livejournal.com]

Actually, no, it was the bit where bottles of water acquired from gas stations count as "Groceries", but anything with calories in it from the same source would be "Dining," that I think made his eyes cross.

What *really* makes his eyes cross? "Hobby:Spirituality" where I put the classes we take together. (It /really/ doesn't belong under Entertainment. Don't ask why I resist simply making it a top level category; such depths are probably better left unplumbed. :-)

categories

[moriamerri.livejournal.com]

It might be really interesting to hear other people's ENTIRE list of categories, and what goes in them.

I *sometimes* put social food under "gifts", but it really depends. A cake brought to a dance would be an example. A cake brought to a potluck would be "groceries". However, I make lots of other distinctions about things bought at a general store. Like dish soap and light bulbs and shampoo are NOT groceries. Neither are herbs or vitamins. Groceries are food. For me. A lot of the money I spend at grocery stores is not on food. Very mixed.

Spiritual classes would go under "classes/workshops" (which IS under entertainment), in most cases. If it was yoga it would go under exercise. But, a number of interesting things go in the category "spiritual supplies" (which is not under entertainment). I'm trying to think of examples that would explain this. Hummm. Stuff like incense or a meditation pillow is probably what it sounds like it is -- and it INCLUDES that. But it also includes things I might buy for emotional sustinance, which could be --um-- a lot of things: fresh flowers, stick-on earrings, some kinds of costumes might fall here. Depends on why I'm buying it. There are a number of categories that I use inconsistently, but I'm not OVERLY bugged by it. It works "well enough" for me.

Re: categories

[cjsmith.livejournal.com]

I love it! OK, here are some of mine, just from the grocery store.

Cake to a dance is Square Dancing. Cake brought to potluck is Social Life (because bringing it is the price of admission). Cake fixings are Hobbies:Baking unless it is for a friend's birthday in which case it might be Gifts.

Light bulbs are Household. Batteries are Household unless they relate to something permanently installed, like a garage door opener, in which case they're Home Maintenance:Minor. I don't know why. Vitamins are Personal Care. Socks, and yes I buy those at the grocery store (maybe that's why they don't fit!), are Clothing.

Snack food is Groceries:Snacks and food for meals is Groceries:Meal Food. Cards are likely to be Gifts, food or litter for the cats is Pets, and wine is either Groceries:Wine or Social Life. Fortune magazine would be an investment education sort of thing, and I don't have a good category for that; I need one. Binaca for a Binaca Blaster Cannon is Entertainment.

Then there's anything I'm picking up for Rob because he hates grocery shopping -- those are "[Rob]" indicating it goes on his account. The worst receipts for me to go through and categorize are grocery store receipts!

[cjsmith.livejournal.com]

I'm not sure if it's a good thing or a bad thing that I don't go back and recategorize old expenses when I make up a new category. This time, I recategorized a few pizzas and that's it. It makes things less clean when I look back more than, say, a year, but it also makes it easy enough to make a new category that I actually do it.

Now I just need to get rid of all the categories Quicken makes for me that I will never ever use. Of course, now I can't think of an example! :-)

[kateo.livejournal.com]

Good distinction! I'm extremely granular about my budget categories, too, and this is a kind of clarification that would be helpful. Thanks for the idea!

[cjsmith.livejournal.com]

The ideas I wind up liking the best are the ones that are obvious in hindsight. This one, I looked at and thought "Why haven't I been doing it this way since day one?" Y'know, the kind that make me feel shortsighted and a little foolish! :-)

[firecat]

Neat idea! My tracking distinguishes social restaurant meals from regular ones but not social groceries from personal groceries.

[cjsmith.livejournal.com]

Ah, interesting. By contrast, I don't distinguish social restaurant meals from regular ones! Huh. Wonder if it would be useful for me to start doing that.

[jupiter29.livejournal.com]

That sounds like a really good idea. I need to do a better job of tracking my spending. And I think you definitely have the right idea with tracking some spending under socialization. That will definitely be more reflective of the value you received from it.

So... will you buy me pizza and wine if I come over? :)

[cjsmith.livejournal.com]

If you come over when a whole bunch of pilots are there for bad aviation movies, pizza, and wine, yes!

[jupiter29.livejournal.com]

Are pilots bad to watch aviation movies with? Do you heckle the movie and point out all the inconsistencies? :)

[cjsmith.livejournal.com]

OHHHHH yes. :-) You should have heard us howling at the supposedly tense moment in "Stealth". I think they were trying convey that the Probably Good Guys couldn't contact the Possibly Rogue Plane, and so Maybe People Would Die, but they said something SO wrong that we all erupted into hoots of laughter.

I think that's the only thing worth doing with most movies, frankly, so I'm just as glad that the only movies I ever watch are aviation movies seen with heckling pilot audiences!

[jupiter29.livejournal.com]

Hehe, I had a feeling. :) And that's okay, while I do like watching movies, I tend to value knowledge and socialization more. So I probably wouldn't mind having the gaps pointed out all that much. ;)