A few budget questions...

[chrissy]

How do you budget for things that you don't spend money on every paycheck- like clothing or trips to the dentist?

Dh and I both suck at managing finances and for the most part we have just ignored them. I really really want to get a handle on them though, and be able to feel like we are responsibly managing our money.

Help!

[velochic]

You need to put away a certain amount for these kinds of things each paycheck. Don't consider it to be money to be spent, but rather money to be saved. Don't touch it. When the time comes that you need to tap this resource... it's there. When you don't need it, it is earning you money in an interest-bearing account. This would be separate from an emergency fund, which would be for true emergencies (unemployment, serious medical, disaster).

[lmonter]

Originally Posted by chrissy

How do you budget for things that you don't spend money on every paycheck- like clothing or trips to the dentist?

A second checking account is what works for us. I got the idea from some book on finances or frugality (I've since forgotten the name of the book).

Every month we budget a certain amount for certain categories. At the beginning of the month I transfer the total of those amounts into our secondary (irregular expense) checking account. In it we save up for...

Home repairs and maintenance (includes tools dh may need for certain things)
Furniture replacement
Gardening supplies (we're getting drip irrigation this year! it's our hobby/fun and good for the grocery budget during growing season)
Car repairs, car licensing and drivers license renewal
Car insurance
Clothing
Medical deductible (we're not putting a lot in this yet, but something is better than nothing)
Gifts (birthdays, Christmas, etc.)
Wood cutting
Life insurance (we pay once yearly and get a slight discount)

So then when I see a good sale on kid clothes, I've got the money already in the account. When my car needed it's 60K tune-up, money was ready and waiting. When the U-joint in the pickup literally fell onto our lawn, we had money ready to fix it. When we needed a new bed for the toddler, we had the money. I either write a check from the account or use the debit card that comes with the account. No credit card (per se) needed.

One thing that I do that others might see as a pita is in the check ledger I have the different categories on each page. When I put in the monthly deposit I write it down, and when we spend from a certain category I put that in. So each category has it's own little balance. Might not work for the not-so-detail-oriented, but this way we know exactly how much is currently in each category at any one time. Like right now we've saved up $200 for gardening supplies (we haven't bought anything yet).

Plus this way it's out of sight, out of mind. Dh and I suck at finances that way - if it's in our regular checking account, for some reason we feel it's fair game once all the regular bills are taken care of. So this works *so* much better, and our finances are really in much better shape now.

[jackson'smama]

i sat down and made a budget that included stuff i KNOW i have to spend on (regular bills, groceries and household, gasoline, etc..) and estimated what it costs monthly for things like you're talking about plus gifts (i don't have to buy someone a gift EVERY month), car expenses (new tires in 2006 cost us $750!!!!), home insurance, car insurance (we pay in annual or semi annual chunks ), heating oil (once per year), etc... i divided an estimate of annual expense by 12 to see what it costs per month on average. then every month, i add up all the "planned annual spending" and that amount (which for us happens to be 400 per month) goes "hidden" in our checking account. i keep a register (a notebook sheet of paper) and tally up the "hidden" as i add to it or subtract from it. so, it's technically always there, but on my checkbook register, it doesn't show up b/c i hide it. my dh thinks i'm goofy but it works.
so my cb register lines would look like this:

hide 1/2/07 plan. ann. spend. 400 then subtract 400 from balance

i then go to the notebook paper and put the date and the amount added and the new hidden balance. then, i get a doctor bill. i subtract the amount of the bill from my notebook paper (hidden) balance and add it back to the checkbook register balance and pay the bill

trans 1/4/07 from PAS 25.00 add 25 to balance
check # 1/4/07 Dr. SoandSo 25.00 subtract 25 from balance

you just need to figure out what you might need in a months time based upon what you spend in a year. i keep it in my checking even though it doesn't earn interest b/c it's easier for me - no true transfer of funds from account to account just to pay a doctor bill.

[mightymoo]

I track my expenses seperate from the checking account. I don't trust the checking account to tell me what I have left for the month or the year. I have an excell spreadsheet for each month. I have at the top, our take home pay, all our bills in one section and I put in expenses in another, One fo the 'bills' is a contribution to our annual budget. I don't really budget on a monthly basis, but on an annual basis I do for things that need to be saved for all year long - christmas, birthdays, subscriptions, vacations, etc.

[PajamaMama]

We use a credit union and we have something called a 'special savings' account...it's the same account number as our savings and checking, with a different suffix. I allot money to go into that account each pay period and when I need to do something like pay the auto insurance I can transfer it to checking over the phone, or online.

By the way this amount for us is $400 a pay period, or $200/week if you look at it that way, or about $10k a year. It pays for car repairs and other automobile expenses, household things, furniture/clothing, etc.