One of the greatest parts of creating a budget is how customizable it can be. However, sometimes it is so customizable that it feels like it is hard to know how to create one or how to make it work for you.
One of the biggest hold ups we see with couples we coach and budgeting is the sustainability of it. You have one unexpected purchase and the whole budget goes out the window. It feels restrictive. You don’t want to create a new budget every month. The list goes on and on and pretty soon your budget is thrown by the wayside and you are back to overspending. We suggest keeping your different categories between 10-20 because if you get too many categories it gets a little tricky to manage. We go over all of this in MUCH more detail in our course but today along with the typical categories of: housing, groceries, gas, etc. I wanted to mention a few categories you may not have thought of.
Other Expenses: This is probably the most critical for the sustainability of your budget. This category is for those unexpected expenses. A good rule of thumb would be about $25 per person in your family. Then, if you aren’t using all of it you can definitely lower it so you have more money going towards your goals. But this is a “catch all” category. As much as you can try to anticipate all your upcoming expenses, there are going to be things that you miss and that can come out of this category.
His/Her Funds: Choose an amount for each of you. This is your “no questions asked” money and is so helpful to have when managing money as a couple. It gives you autonomy to spend money however you want– especially when you are coming from different value systems. If I want to spend my money on shoes? No problem. If my husband blows all his money on golf? No problem. Seriously, this category alone will change the way you view budgeting and make it feel way less restrictive! We even had this when we were getting out of debt as college students. It can be as little as $5 to start out with!
Gifts: Whether it is Christmas, Birthday, Mother’s Day, it is so helpful to already have the money allocated. Just putting a little bit of money away each month will help you to keep your budget in check and not have a huge credit card bill come Christmas time!
Dreamlining/Vacation: Very similar to the gifts category but if you are putting a small amount away each month for vacation, you will actually go on them. Many people we talk to have dreams and plans of going on vacation but feel like they never have the money to do so. It is hard to all of a sudden come up with hundreds or thousands of dollars on the spot to fly to Europe. However, if you put away a little bit each month you will make those things happen. You can adjust the amount based on your stage of life. When we were getting out of debt we still put a small amount away for this but a lot of the things we did were free or inexpensive: camping, St George trip, fly home for Christmas etc.
Last year, we were able to put a bit more away for this and went skydiving, month long trip to Europe, Anniversary trip to Austin, TX, Colorado, San Fransisco etc.
The point is whether they are big or small, putting aside a little bit each month helps you to make them happen!
Car Repair: Your car will break down. You will have to get it registered. You will have to get an oil change etc. Put aside a bit of money each month for this so that it doesn’t blow your budget when you hit a rough patch.
Hopefully these categories will help you to make your priorities happen and help you to create a sustainable budget. Happy budgeting!
If you want a step by step guide on how to create a budget, travel hacks, insurance, what bank accounts to use and so much more, check out our course here.