Budgeting

I have oft read about to 50/30/20 rule, that 50% of your income after taxes should go towards needs, 30% towards wants, and 20% into savings or debt reduction. I generally feel like I have a really good hold on our finances, so this afternoon I decided to see if our spending fits in this model.

It doesn’t.

The bad news is that we’re only putting 16% of our income into savings. That includes what we’re putting into retirement, emergency savings, our “general” savings, and our extra payment on our mortgage. This seems a little unfair to me, though. Aside from our mortgage, we don’t have any debt. (We were both super lucky on the student loan front. We occasionally used to let our credit cards balloon to a few thousand dollars and then pay them down, but since I started using mint, we got off that train. The car’s paid for. Knock on wood, debt free for the moment.)

The good news is that we’re also well under 50% for needs. Including auto insurance, home insurance, gas and electric, gas for the car, our alarm system, groceries, pet food, and our portion of medical insurance, we’re sitting at about 36%.

When I add up the wants that happen every month, I end up with about 21%. (So, going out to dinner, buying lunch, booze, mobile phones, internet, occasional parking, car2go and uber, beauty stuff (I usually get alternate months getting a pedicure or my brows done), my yoga classes, hulu, clothes, coffee shops, and housecleaning.)

If you’re a math wizard, that leaves 27% for random stuff that is hard to budget on a monthly basis because it’s not monthly. Once a year stuff, like my eye doctor appointment and contacts, vacation, vet bills, race entry fees, christmas gifts, hair cuts, funeral travel, replacing our busted wireless router, parking tickets, concert tickets, getting Chris’s tux dry cleaned, car repairs, bike repairs, fabric to make curtains for my office…it’s not like we have a big chunk leftover every month. It’s always going somewhere.

Anyhow. All just to say that budgeting is hard because categorizing is hard and there’s always something random that comes up that doesn’t fit neatly into a bucket.

 

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