Warning: Long post ahead! This is an introduction to our monthly budget, and I’m including a lot of information this time around that won’t need to be repeated in the months to come.
Welcome to the new Mintly Budget Preview for January 2015!
I haven’t done this before, but I’m sucking it up and I’m going to let you know how we did at the end of the month. (Augh! I’m terrified.)
Part of the whole reason I started this blog was to help keep track of our Debt Eradication progress and for some accountability. I also recently revealed that we have only stayed within our projected budget ONE month out of the last twelve! So, this is really just an opportunity to give myself a kick in the pants to do better this year. (Fear is an excellent motivator, right?)
- We use a zero-sum budget.
- We get paid a little more than what I budget for – but I use that extra either to pay down unexpected expenses from the month before or I can snowflake it to Debt Eradication. If either of those happens, I’ll let you know!
Note: This image is a screenshot from the Budget tab of my account on Mint.com.
Rent: self-explanatory – just want to say that this is way better than our mortgage used to be!
Transfer: Sinking Funds: This is where we save money each month for known upcoming expenses. I have a spreadsheet with different line items to keep track of how much money each category has in it. The categories are things like: Gifts, Business Expenses (usually tax-write-offs), L’s School Activities, Car Repairs, Car Insurance, etc. At the end of 2013, I used Mint to figure out how much we had spent, then divided it by 12. This year, I tallied again and modified what we are saving to help us keep up with what we are spending. We are now putting aside $600 (up from $450 last year) each month. (I’ll talk more about this topic in an upcoming post!)
Food & Dining: I aim to spend about $500 on groceries and $100 on eating out (but breaking it down too much in our Mint Budget makes my head hurt). I believe that we can do way better than this (like, $400 for food all together) if we get serious about meal planning. I’m aware that some others are able to do much better than this, BUT I also know that we need to take baby steps! (I’m secretly hoping we can come in under budget in this category this month and then I can snowflake the leftover money to Debt Eradication!)
Student Loan: This amount is our minimum payment for four separate student loans. (Debt Eradication funds are separate from these automatic payments.)
Transfer: Savings Funds: This is our last time we’re designating $500 to our Travel Fund. It is now fully funded (actually, I transferred these funds as soon as we got paid right before Christmas).
Bills & Utilities: Cell phone bill, Water, Electric, and Internet are included in this category.
Gas & Fuel: $250 still seems high to me, because we live only a few miles from where we work now; however, we do travel about two hours each weekend to go into the Small City to take L to ballet lessons and so I can get my City Fix (Trader Joe’s, anyone?). I also predict there will be some travel to see H’s family (about four hours of travel total) and perhaps an extra trip to Small City somewhere in there. It would be great if we came in under budget here, but it’s unlikely.
Slush Fund: This is a new category for 2015. I built in $200 for us each month, which will hopefully help us avoid putting things on credit cards that we can’t pay off before the month’s end. This will include any clothing, personal items, haircuts, or even a special evening out. In the past, we have still paid money for those things, but when we were using a zero-sum budget and allocated all of our savings at the beginning of the month, we had no money in our checking account to cover those expenses. I hope that some months we won’t use all of this money but will be able to snowflake whatever is left over to Debt Eradication!
Kids Activities: This is L’s ballet lessons ($60) and piano lessons ($30/lesson). Piano lessons are variable, and this month L will have 4 lessons.
Babysitter & Daycare: L’s After-School Care cost.
Roth IRA: We bumped this up from $30 to $100 a month. Although I know the $70 could be well-spent on paying down our student loans, I feel better knowing that we’re putting SOMETHING in there. H doesn’t have a Roth IRA – but his retirement fund is better funded than mine, because the institution where he works does something similar to a match, so his fund gets more put in each month than mine does. Yes, I too have a regular retirement fund, but it’s in much sadder shape than H’s (it is funded by my contributions from my paycheck, pre-tax, but my institution doesn’t pay anything into it).
Home Services: This is our trash collection. I think I kept it as a separate line item because it’s not variable, like some of our other utilities. I think I’ll move this into the Utilities section in February, though.
Home Insurance: This is our Renter’s insurance premium.
Entertainment: $9 for Netflix!
Fee: $1 for the credit union – they take it out once a month. I don’t like the fee, but it could be higher!
Goal: Citibank (Balance 2): This is the $450 we spend each month to pay down our Citibank card, where we moved a good chunk of our student loans. It will be paid off in June 2015.
January extra funds: The money over $5000 from our paychecks went directly to paying down credit card debt that we accumulated in December buying gifts. Gulp.
January Debt Eradication: We have big plans for Student Loan Debt Eradication from February on; however, the Travel Fund got its last deposit this month. Moving forward, that will be snowballed into our extra debt payments.
You can see that we have an extra $256 left over. In February (and beyond), we will be using this (plus the money that was being saved to the Travel Fund monthly) to send extra Debt Eradication payments to our student loans.
Unfortunately, we know that L is going to need two more cavities filled in January/February. They will cost about $300 each (AAAUUUGGGHHHH), so I’m going to keep this aside and use it to pay the dentist when she goes back. We can cover the rest from the Slush funds. (My big plan is to also use money from our health category in our Sinking Fund after we’ve contributed again in February, as well.)
Well, there you have it, folks! I am going to work super hard this month to try to stay under budget, since I know I have to own up to how we did at the end of the month! Eep.
Does anyone else use a zero-sum budget? Do you find it works or creates problems? If you don’t use this type of budgeting, what do you do instead?