My Simple Trick to Budgeting

I think budgeting is fun, but I’m weird!

I’m sure you hate to budget, or you wouldn’t be reading this article…so let’s jump right into it.

What’s my simple trick to budgeting?

Less is more.

I categorize my expenses broadly (see the list below).

This allows me to have fewer budget buckets — and I can spend less time assigning expenses and reviewing. But also allows flexibility for my spending to change month-to-month.

While broad, the categories are not so large that I can’t see when I’ve exceeded my budget in key areas.

The benefit of my process is that I don’t care if I spend $500 on food this week or $50.

I don’t have to worry about restocking my cleaning supplies and necessities this month, even though they’ll last for several months.

As long as I’m under my total category spend at the end of the month, then I’m fine.

Here are my budget categories and what they include:

1. Housing. Includes mortgage and HOA fees.
2. Internet. Includes internet, Amazon Prime, Netflix, and other online services.
3. Utilities. Includes water, garbage, gas, and electricity.
4. Phone. Includes…phone.
5. Auto Insurance. Includes insurance only for our cars (we don’t have a car loan).
6. Pet. Includes puppy costs like food, toys, grooming, and daycare.
7. Grooming. Includes our hygiene costs like haircuts, nails, lashes, etc.
8. Room & Board. Includes our “excess” monthly contribution to our Coast FIRE brokerage account.
9. General Savings. Includes our regular contribution to our high-yield savings account for travel and savings.
10. Monthly Spending. Includes everything else for the month — food, gas, entertainment, car care, discretionary spending, drinks out, day trips, and of course lots of coffee!

That’s it.

And it’s even better because 9 of the categories are fixed costs that rarely change. (We average our annual utilities for our monthly budget, so we only worry about this once a year.)

This means we can spend most of our budgeting energy reviewing the “Monthly Spending” category — but only if it exceeds the budgeted amount.

If it’s under budget, then we move the difference to our Coast FIRE Piggy and move on. (See the article below about my Piggy Dippin’ game.)

How complicated have you made your budget?

Is it intimidating or requires hours to update and review?

If so try this simple trick to streamline your budgeting and spend those hours enjoying the rewards of your great financial habits!

Enjoy the article? Hit the clap button, leave a comment, share with a friend, and click the follow button. And join the #coastFIREby45 community!