For a while now, I’ve been using my dual account budgeting system for our family finances. In case you haven’t read about this before, I use two separate accounts. One is for all of our regular standing orders and direct debits, the other for discretionary spending including food, fuel, clothing and so on.
Use two accounts
Splitting out our two major spending groups means we never have to worry about our bills. These are paid automatically. Plus, we make sure there’s always the money we need in the first account to cover this planned, regular expenditure.
Track with an app
As well as my dual account budget spreadsheet, I’ve been using an app called Spending. This helps me work out what proportion of my overall expenditure is devoted to the different categories I have specified. By seeing the percentages in Spending’s pie chart, I know that I’m allocating the correct proportion of our overall household budget to each category.
Try breaking expenditure into weekly totals
In spite of paying a lot of attention to budget tracking, August seemed like a very long month in money terms. The long summer holidays meant our usual spending patterns shifted and there seemed to be too much month left at the end of the money.
So, I decided to take my ‘what gets measured gets improved’ philosophy a step further. I opted to divide my monthly budget amounts into weekly totals. This way, I could pace our expenditure, and track our overall monthly finances at the same time.
Here’s how I did it
I quickly worked out the number of weeks in the month. It’s easy if every month is February (28 days/7 days in a week = 4 weeks in the month). But, what about a month in which there are 31 or 30 days? Well, a 31 day month has 4.43 weeks and a 30 day month has 4.29. So, that’s the maths out of the way.
Imagine you’re allocating £575 per month to your family food and groceries and you’re in a 31 day month, that gives you £129.84 to spend per week on your weekly shop. Seeing this amount as a weekly total really helps you focus when you’re doing your online shop. I have found that if I spend a few more moments comparing prices and making substitutes, I can keep within the weekly amount.
When it gets tricky
Other items are a little more tricky to manage on a week-by-week basis. For example, a single tank of fuel can exceed the weekly budget, but I know that we only fill up around once a fortnight. For this category, I might allocate fortnightly amounts.
I also think it’s OK to vire between budgets (get me with my finance terminology!). For example, if I know that there are no school lunches to buy during vacation time, I can boost another ‘pot’ if that would be helpful or allocate those funds to savings.
So, I’m going to continue for the remainder of the month and see whether or not this ‘pacing’ of expenditure makes a difference. At least, I’m not buying stuff we don’t need. That’s such a blessing in so many ways.
How about you? What helps you stay on track? Do you use an envelope system and pay for everything in cash? Do you have a favourite app? Do share!
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