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

[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. :-)