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Question on Budgets

November 30th, 2006 at 01:46 pm

Do you budget on a monthly basis and add in irregular expenses as needed, or do you try to account for the irregular expenses every month?

Here's an example of what I'm talking about: I am a runner. I buy about 3 pairs of running shoes / year at ~$270 for the year. However, I don't buy them like clockwork every 4 months-- it depends on how much I'm running and how quickly the shoes are breaking down. I categorize this as "recreation" in Quicken rather than clothing since I only wear the shoes for running. I'm curious if people would recommend putting in $22.50 / month (22.5 *12months = 270), or, just put in the $90 / month when I anticipate having to buy new shoes? I'm sure it can be done either way, but I'm just curious what works well for people.

I imagine most people have a slush fund in their budget for unexpected but unnecessary things. I suppose the running shoes could be drawn from that.... any thoughts?

Posted in Spending | 9 Comments »

9 Responses to “Question on Budgets”

  1. tinapbeana Says:
    November 30th, 2006 at 02:13 pm 1164895989
    1164895989

    personally i would budget X per month, just cause it's easier to keep up with. i do the same thing with my water bill, which i actually get quarterly...

  2. Broken Arrow Says:
    November 30th, 2006 at 02:59 pm 1164898742
    1164898742

    I would budget any irregular expenses that may come up.

    Thing is, even with shoes, if you're a regular runner, you know roughly how long they're going to be good for. And thus, you can anticipate, budget, and save up for it when it's time to replace them.

    Also, something like this would not be considered irregular expenses.... It's just not something that is associated with basic necessities such as food or shelter.

    So, if it was me, I would create and regularly fund an "exercise fund".

    Even with birthdays and Christmases- something that occurs only once a year-- I have a regular fund that I contribute to everytime I get paid.

    The only true irregular/slush fund I have is my emergency fund... and that's reserved only for emergencies. Otherwise, I recommend trying to regulate everything. The tighter you can corral your budget, the easier your financial life will be.

  3. threebeansalad Says:
    November 30th, 2006 at 03:13 pm 1164899583
    1164899583

    Great advice.. thanks!

  4. janH Says:
    November 30th, 2006 at 04:11 pm 1164903105
    1164903105

    We're doing the same with Hubby's workboots. Although he won't need them for another while, I am putting away a set amount each month toward the boots. Learned that here!

  5. koppur Says:
    November 30th, 2006 at 05:12 pm 1164906761
    1164906761

    I'd put aside a small amout each month, then when you need it it is there...and if you go several months without needing it, then the amount just buils up and you'll be set for the next 2 times you need shoes...good luck! Smile

  6. Aleta Says:
    November 30th, 2006 at 07:01 pm 1164913260
    1164913260

    I budget everything monthly. It's so much easier to keep up with. Even if its water as was said that is paid quarterly, I budget it monthly and at the end of the month or whenever I want to transfer anything out of my account that pays bills, I just transfer it to my money market where it will earn interest. I do the same with my husband's estimated taxes. You'll be surprised after a while how much your escrowed expenses will give you more in interest.

  7. Broken Arrow Says:
    November 30th, 2006 at 07:47 pm 1164916023
    1164916023

    Is it my imagination, or did this entry change? Probably my imagination. Big Grin

    I'd still budget regularly, and err on the high side. Better to have a little too much money to work with than too little.

  8. paigu Says:
    November 30th, 2006 at 08:00 pm 1164916843
    1164916843

    I buy running shoes every 6 months or so. To make things easier, I classify it under the general "clothing" category. Since I don't buy clothes every month, then I don't feel too bad using the money I allocated for those $85 shoes.

  9. monkeymama Says:
    November 30th, 2006 at 10:45 pm 1164926738
    1164926738

    I take most of those expenses and divide them by 12. Whatever I don't use one month goes to a slush fund so it is there later. For bigger things (property tax and insurance) I put it in a money market to earn interest, smaller things in a low interest savings slush fund tied to my bank. IF the slush fund gets too large, like I am not spending all I budgeted, I transfer it to my emergency fund. But as an accountant I have a pretty complex system overall. It is easier just to put aside so much per month than account for the bigger things.

    I made a spreadsheet in excel where I entered everything by month though (month paid) more as a reference so I can see when things are coming due and make sure I didn't prematurely empty out my slush fund and such. Plus it is super easy to update numbers when things increase or you realize you compeltely forgot to include an expense. Then you see the totals for the year and can divide by 12 easily as things change over time.

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