I think this is a great way to really make sure you’re not only being prepared but also planning ahead for that unexpected expense! Pretty cool, right? This way, if I go 3 months without having an expense and I now have a $400 expense, I have already saved $150 in unused funds. I have the ability to classify different amounts of money into different buckets which can help keep it all organized. I put $50 in for my budget every single month and when I get to the end of the month and have spent $0, I then will transfer $50 into my Ally high-yield savings account and let it sit. Personally, I don’t have a car maintenance expense most months, but I budget for it every single month. Of course, you can do some simple preventative maintenance that will help minimize these costs but that doesn’t change the fact that these costs are still going to occur if you have a car. There are a lot of things that might come up in your life including oil changes, flat tires, car accidents, battery replacement, the list goes on and on! I figure we can go ahead and start with car maintenance since this is a topic that I briefly discussed above. Anything more and you’re not going to do it anything less and you’re not actually going to learn where that money is going!Ī lot of personal budget categories are obvious like mortgage/rent, groceries, gas for your car, student loans, etc., but many of them are not obvious! So, what are these magic personal budget categories that everyone forgets?
That might sound taxing, but I can track and entire month of spending in just 15 minutes – it’s really not that bad! I think that spending 15 minutes on your budget each month is the perfect amount of time. Not only does it allow you to be flexible (because life isn’t static, right?), but it forces you to actually track each purchase so you truly know where your money is going. This can all be completely alleviated if you were to just have the proper personal budget categories from the get-go! That’s all it takes! Then you can properly allocate your income to each section that is relevant to you.īut you can only properly allocate them if you have a budget planner that is going to allow you that flexibility, and that’s why I think that the Doctor Budget is the best budget planner on the market. What if it’s the last day of the month? You don’t have anytime to spend less in the other categories so you’re likely going to have to select option #2 or #2. #1 is obviously the best option but it’s still crappy. You didn’t budget for it and now you’re going back into debt and throwing this on a credit card Pull from your emergency fund for something that I honestly don’t consider to be an emergency.Reduce a different category by the same amount as your flat tire repair.Hear me out – if you have budgeted 100% of your money and then something crazy comes up, like say a flat tire – what do you do? Well, you have three choices: To have an effective plan it all starts at the same point – making sure you have the correct personal budget categories included from the get-go. Or, maybe you plan but your plan fails you.
The easiest way to fail on your personal budget is to not plan.
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