Yesterday I had the opportunity to visit with my good friend who is about to be married. Our conversation shifted to the importance of establishing a budget together as a new couple. Christopher introduced me to the world of budgeting when we were still dating and I fell in love with it. In fact, putting together our budget is one of my favorite times of the month. There is so much security that comes with telling our money where to go rather than being stressed out about how to make ends meet at the end of the month!
My Top Three Must-Have Budget Categories
As I was talking to my friend (and then later in the day writing our own February budget), I realized that there are 3 must-have budget categories. These are worked into our budget each month and I would encourage you to do the same. As you read this list, you will see that these are categories that are outside of the “necessities” of life. You know, the things like food and utilities and gas money and tithe.
Christopher and I tithe religiously (pun definitely intended!) and see that as the most important building block of our financial plan. Tithing is always the first category on our budget and we allocate it before anything else – even our mortgage and grocery money.
My must-have budget categories may not be the same for you, though I will lay out my reasoning for including these three categories on every budget. Perhaps it will make sense to you and will help you as you put together your first budget or write your next one.
This budget category is often overlooked – especially by those of us on a tight budget. It is so frequently thought to be a luxury, when in reality it is an investment into the future. Rainy days will come – and it is so much more easier to get through when you have a bit of money set aside to help. I will admit that this is one of those budget categories that has gotten overlooked by Christopher and I in recent months and as we built our house. After finishing Dave Ramsey’s first baby step, we became lax with saving and instead poured every “extra” dollar into our home. Now, we are re-working our priorities (can you say “new year”?!?!?) and including saving in each months’ budget.
Saving doesn’t have to be done in large amounts…this month we are only putting $50 into our emergency fund. As our income increases or other expenses go down, we will be putting in more. The next baby step we are working on is to fully fund our emergency fund (which, in our case, means building it to around $10,000). It’s going to take us some time to get there but we are committed to saving toward it every month.
While this may seem like an unnecessary expense, I have learned (over 4+ years of writing budgets for our family), that this is something I shouldn’t leave out. It seems that inevitably on the months I think we don’t need anything in this category, someone does. Whether it’s mittens for the boys or a new bra for me, there always seems to be a clothing need in our family.
We don’t put much in this category though (except for on the months that there is a consignment sale in town…on those months we’ll increase the clothing budget since that’s when I buy most of my clothes). Usually it amounts to around $20 or $30. That is enough to cover the “emergency” clothing needs and we can plan better for larger purchases in future months.
When I first began writing budgets (and we were on a lesser income), I often did not include a clothing category. But, like I said earlier, those were the months when we would actually end up needing something. I always feel terrible about needing to take it from somewhere else.
This category is really our “free money”. We try really hard not to have a plan for it when we make our budget. Sometimes when we are really tight we will say to each other “well, we can use the blow money on that”. But our blow money is really for spur-of-the-moment spending, a spontaneous date, or that too-good-to-pass-up yard sale deal! Some months we will put $100 in this category, but recently we’ve reduced it to $50.
Our blow money category is a bit like a buffer. I am a spender and have a really hard time *not* spending money. I am the one that usually falls for those t00-good-to-pass-up deals! Having a bit of flexibility in our budget is important because I’m not feeling terribly restricted with having no fun spending money, but we are still putting those parameters around our money and keeping it under control.
What About You?
Now that you’ve seen my top three must-have budget categories, I’d love to know what yours are! What are those cannot-do-without categories in your monthly budget? Leave me a comment and let me know!