I’ve been using YNAB for years now (and J does too), and what’s made a HUGE difference for me was money in categories. Instead of seeing $3,000 in my bank account, I see that I have $300 allocated for groceries and don’t overdo it on the fancy cheeses every time I go to the store.
This works well with most categories – groceries, household goods, gas, utilities. Typically I spend about the same amount per month in each of these categories.
For some categories like car insurance, I allocate money each month and pull the money out twice a year when the payments are due.
I have noticed an issue with other categories, though, and maybe you have, too.
Gifts
Let’s start with gifts. If I see that I have $100 allocated for gifts this month, I will want to spend it this month (presents for everyone 🥳). Historically I haven’t been great with rolling money over from month to month in the gifts category, because I love buying gifts.
I’m not prioritizing the gifts that I know I’ll need, nor am I setting a budget for those gifts by person. I buy birthday and Christmas presents for important people – J, my partner, my sister and my nephew. But it’s anyone’s guess how much I’ll spend.
It can also be hard to plan for other gifts – like graduation presents for J’s friends (how many of those will there be?) or gifts for people whose loved ones have passed away (which seems to be happening with more and more frequency).
I’m also not taking into consideration that there are other ways to show love and affection without buying gifts.
I need to try to be more intentional with gift buying – figure out the priorities and then use what’s left (and not more) as needed.
Travel
The next category is travel. In the past, I’ve set aside a fixed amount of money each month for travel, but it’s not tied to any specific travel. I’m not looking ahead to see where I’m going throughout the year or how much I’ll need.
Here’s what’s upcoming for this year.
- Hotel and food for college visit in April
- Hotel for wedding in July
- Flights and hotel for vacation in July (paid for last month with e-credits, cash and credit card points) PLUS airport parking, Ubers, public transportation, food and excursions
- Possible hotel for camp in July
- Flights, airport parking and Ubers for family visit in November
For vacation, we’re leaving early the first day and can pack snacks and food for the trip there. There is a Trader Joe’s a few blocks from our hotel, and we can try to determine ahead of time what kind of groceries we’ll buy for the room. (We do have a fridge!)
If I ballpark meals at $70/day, that’s almost $500 just in food alone. I’ll also research some activities and figure out how much additional we’ll need for the trip.
For this category, I need to plan a bit better and try to estimate what I’ll need for each trip.
Activities
The next area I struggle with is actually not one specific category, but all the things for J are hard to categorize:
- February – Ads / ornaments / basket / donations for musical
- May – Prom
- July – Camp
- August – Senior pictures, band and football ads
- September – Yearbook, college applications, band festival donations
- October – College in HS credits / AP Exam fees, homecoming, instrument, contacts
This category may need a little bit of everything – research for costs I’m not sure of (how much DO senior pictures cost?!), saving ahead for larger costs (camp is $715 for the week) and limits for the rest. Yes, I could spend an unlimited amount on ads and donations, but I probably shouldn’t.
So what about you? What are some sticking points in YOUR budget and how can you fine-tune?