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Considering to-the-penny budgeting

May 8th, 2008 at 10:42 pm

I've been considering it for a few days, and I finally decided today: I'm going to try budgeting to the penny as soon as AS finds her job.

Currently, I just set up a budget for what money we know we need, and there was a bit left over (about $225) that I considered fluff money: Every so often, if I didn't need it for an unexpected expense, I'd put it toward debt, or toward fun-money savings, or build it up gradually for a planned expense (like a trip). But quite often it would go for a medical bill or to buy textbooks.

It's worked perfectly well, but I'm starting to get annoyed that there [i]are[/] still expenses that I don't have money allocated in the budget for. Also, when we get a smaller windfall, like from selling a book on half.com, I just roll it into the general surplus and never get to see [i]exactly[/] how it benefits us.

So I've decided when AS changes jobs and we figure out how much she'll bring in, I'm going to start budgeting to the penny of our minimum paychecks. I'm going to add a regular line item ("envelope" I guess) in my budget spreadsheet for health care and one for education expenses, and I'm going to up my regular contribution to fun-money savings, so that we're more likely to reach our gift and travel budgets in time for the relevant holidays.

That should cover all the things outside our budget that have come up in the past year. I've been socking a bit away for medical expenses in case I couldn't cover them and I have about $75 saved and contribute a few bucks a month. Once I create this health-expense line item, I'm renaming that money "Emergency Fund." There are probably expenses I still can't predict, so that bit of savings could keep us from going off track. When I up the fun-money savings it will automatically increase my contribution to the emergency fund, so it should build up pretty fast.

Unexpected windfalls such as OT pay and eBay sales will go toward debt repayment. (The only exception is our June garage sale, because I've already promised we could use those profits for home improvements.)

If we get raises or AS gets a higher paycheck than at her current job, my next priorities would be: 1. Up the health and education allotments (right now I see $75 per month for both but I'd like it to be $50 apiece). 2. Up our spending money, but as an exercise incentive, so it will encourage us to exercise (rather than decide "woo hoo! extra spending money! now I don't have to exercise!") 3. Increase debt repayment. 4. Increase 401(k) contributions.

Currently I have a budget surplus of $1256.40 through July 15. I'm keeping that there, and we'll use part of it for a new fridge (hopefully our last unsaved-for expense) and the other part will sit as a security blanket during AS's job hunt. If we don't use it all to cover a paycheck gap, I'll put every penny of the remaining surplus toward debt and start fresh with an eye toward maintaining a $0 bottom line at all times.

There! I've published it, so now I'll have to make it happen. Smile

1 Responses to “Considering to-the-penny budgeting”

  1. koppur Says:
    1210293903

    I was the same way with half.com payments and ebay sales. Now I make it a point to transfer all those small payments into my $20 Challenge/EF fund ASAP. It's nice seeing them add up. Smile

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