Friday, January 18, 2013

What's the best way to budget?

Part of the reason I stopped blogging last year is that I was getting frustrated in how to budget. We all know that a budget is a living document, meaning that it won't be the same everymonth. Some months you will spend more on food than others, etc

For me another part of the challenge for me is that my paycheques can also vary. I get paid hourly and I don't get paid if I take a day off (other than a sick day) or if there's a stat holiday. I find it hard to budget based on a fixed income because I don't really have a fixed income. I know Gail suggests to have an A,B,C budget (if you don't know what I mean on this, I'll see if I can find a link). But my income doesn't vary that much from month to month so I know my basics are always covered. So I just vary my payments or variable expenses accordingly. This makes sure my bases are covered but makes it a pain in the *ss to budget.

Another issue, one that I'm hoping my fellow pf bloggers can help me with. What do you do if you have a run over? When I was looking at my last 2 week time period, before I got paid on the 3rd of Jan I had about $200 left over from my last paycheque (shocking, I know). If I was using the jar system, I could just allow the money to accumulate until I might need to do a bigger shop, but what do you do if you're not on the jar system? For me the jar system wouldn't work as the hubby and I don't share finances and there's too much sharing or taking turns of spending money. For example, maybe I'll buy dinner tonight and he'll pay for lunch tomorrow, etc
For me, as long as I'm not spending more than I make, I'm making regular debt repayment (with the goal to be debt-free by the end of the year), I'm making regular savings payments (to RSP, Emergency Fund, and spending plan) shouldn't the rest be mine to do with whatever I want? Does it really matter how much I spend on groceries or entertainment as long as the bottom line balances?

So, I'm going to be posting my budgets monthly rather than bi-weekly like I used to. I will still post my weekly spending for accountability purposes.

How about you? How do you budget? What do you do with overflow?

Have a great weekend! TTFN,


  1. We are fixed, with bonuses some times and an extra check twice a year. So it is easy for us to bonus. Either way though, we zero budget balance, even with the unexpected bonuses.

    As for your extra money - do you have long or short term savings goals? Maybe something that does not get a line item monthly? For example, we love to travel, but maybe do not have a destination in mind just yet. So, any extra money we come upon, we stick in there.

    It doesn't have to be travel - it can be taxes, roof repair, new car - anything. So those extra money times could be a little play, a little save.

  2. I like the idea of sticking extra money to another line in my budget. I've technically already started since I decided one of my savings account to be a "curveball" account as Gail calls it for those "unexpected" (well, not unexpected, but not necessarily well planned for) expenses like gifts, or when your budget has a run-over. So, I think this may be the best way for me to deal with overages for the time being.

    Thanks for the suggestions, Jennifer.

  3. Great question!

    When I was paid weekly, and bi weekly, I had a different budget than I do now. I budgetted using a 4 day number - since it's easier to account for sick days and the potential than on a five-day and getting screwed with not enough money.

    So, using your four-day total (the fifth being an automatic direct-to-debt/direct-to-savings amount), you can handle things a little better. If you get through the month, having worked every day, split the money - one week to debt, one week to savings. That way when you need a sick day or a day off you've got it stashed away.

    This may not work exactly as is for you, and there may be situations that arise that this doesn't work, however, it should hold up really well for you. Then when you work more hours, or all the days and more hours, you can shift the extra money around, leave it as a buffer in your account, beef up your savings for a day down the road when you need a sick day, or tackle that debt faster.

    It's not fool proof, however, it does leave room for these other situations.

  4. Hi FMW,

    Thanks! I really like this idea! I get paid for sick days, its only vacation days and stat holidays I don't get paid for (instead getting 8% extra each pay). But yes, budgeting like I only get 4 days of pay per week instead of 5 should smooth out those pays where I do only get paid for 4 days. Its rare that I would get less than that (only Christmas or Easter would be the exceptions). I will definitely play around with my budget numbers and see how this would work out. Thanks for the suggestion.