Earlier in September, I wrote a post on Sticking to your budget – week by week. I thought it might be helpful to provide an update on how it went. What went well? What didn’t go so well?
As you might recall, I break our spending down into categories and track each one really carefully week by week. You can read about how I do this by clicking on the link to the post, above.
What went well
Our spending categories for September were as follows:
- Dog-related expenditure (gotta feed the hound!)
- Mobile phones
- Teen allowance
We don’t worry about regular expenses such utility bills because those are taken care of from our second account with regular standing orders and direct debits. What we’re dealing with here is discretionary spending.
Food and groceries
The ‘food and groceries’ part of the budget went really well. Because I’d analysed our spending over the previous few months, I knew how much to budget for our weekly food and groceries shopping.
As the month progressed, I tracked what we’d spent so I knew that I’d allocated the right amount of money to this particular pot when ‘actual’ amounts were pretty much what I had anticipated.
Other pots – dog-related stuff, eating out, phone bills etc. were also on budget.
What didn’t go so well
I knew instinctively that my ‘miscellaneous’ category might be where the greatest ‘sticking-to-the budget’ challenge lay. This opaque and potentially confusing category was where I’d record things such as clothes (we don’t buy many), books, haircuts, cash withdrawals for general use and so on. At the beginning of the month, I was clear what we could spend per week under this heading.
The Miscellaneous category
This opaque and potentially confusing category was where I’d record things such as clothes (we don’t buy many), books, haircuts, cash withdrawals for general use and so on. At the beginning of the month, I was clear what we could spend per week under this heading.
I also knew myself: most of this spending happens at the weekend, so I have to be more vigilant on Saturdays (in particular) to guard against a modest splurge! However, at the beginning of the month, I was clear on what there was to spend per week under this heading.
Emergency fund required!
Then, we had a leak under the sink.
£124 later, the leak was repaired and a new part fitted, but that blew the budget for the week and significantly impacted on the following week.
This is where having an emergency fund is essential Dave Ramsay’s Total Money Makeover advocate a series of 7 baby steps, the first of which is to save $1000 to start an emergency fund (in our case, that’s 1000 GBP!). That means no spending on anything that isn’t absolutely essential and doing everything possible to build that fund before tackling all other baby steps (the next of which is to pay off any debts via Ramsay’s ‘snowball’ method).
Happily, our emergency fund is in place, but this shows that the ‘miscellaneous’ category really needs to cover only those spends that are considered or well-thought-through, rather than unplanned ‘surprises’. And you do need to control those spending urges, otherwise it’s easy to overspend mindlessly.
What about you?
How do you manage your monthly budget? Have you tried my dual account budget approach, or do you use another system? Maybe you use a particular app that works really well for you. Do share by replying below!
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