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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?

9 Responses to “Question on Budgets”

  1. tinapbeana Says:

    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:

    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:

    Great advice.. thanks!

  4. janH Says:

    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:

    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:

    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:

    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:

    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:

    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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