Author Topic: Budgeting - the dreaded miscellaneous expenses  (Read 7374 times)

Enough

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Budgeting - the dreaded miscellaneous expenses
« on: February 17, 2016, 05:00:37 PM »
Looking for any thoughts/tips/tricks on cutting down on the non-recurring expenses, the ones that fall in my catch-all / miscellaneous category.

Some background:
I feel like I run a pretty tight budget in that and I know where all of my recurring expenses are going and have always had them under control.  The problem is each month there are one-time expenses that slide into my catch all category.   These expenses end up putting me way over my recurring spending budget.  If it only happened one or two months out of the a year, no big deal, but seems to happen all but one or two months out of the year.

For example:

My budget for recurring items:
Food: Restaurants   165
Food: Groceries   135
Auto: Ins., Taxes, Reg.   40
Cell Phone   Employer Paid
Morgage    N/A
Home Insurance   60
Home Taxes   40
Haircut   10
Auto: Fuel   165
Electric & Nat Gas Bill   100
Water Bill   40
Internet   25
Donations   50
Total Recurring Budget   830

Actual recent non-recurring expenses from past three months:   
1 day ski Lift passes for myself and SO   120
Picture frame   75
Weekend trip to nearby city (hotel, tours, gas)   300
Dental filling   80
Illness (doctors visit, lab tests, & perscription):   210
Speeding Ticket   150
Caving trip   55
Clothing & shoes   110
Indoor plants   15
Superbowl party   30
New iphone (work subsidized)   55
Rock Climbing   70
3 Family Birthday Gifts   160
Christmas presents   200
Broken Ceiling Fan   85
Total 3mo miscellaneous expenses   1715
Per month    571.67


I find it difficult to create a budget for these expenses because I do not plan to spend money on those items every month, even if they were grouped into more generic categories like gifts, travel, home maintenance, shopping, healthcare.  And without a budget, its difficult for me to cutback on these expenses because each time one pops up, I pay for it and tell myself its just a one time expense.

So how do you handle these types of expenses? How do you motivate yourself to cut back on them?

Cassie

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #1 on: February 17, 2016, 05:03:57 PM »
When we were young and on a tighter budget we had a category for everything. So basically no going skiing if there was not enough $ in vacation fund, etc.  If you do this for every category it will solve the problem.

Kitsune

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #2 on: February 17, 2016, 05:18:47 PM »
Some of those things seem like they'd fit general categories, which is what we do. For example, ski lift passes, weekend trips, rock climbing, etc can be 'trips and entertainment' or something of the sort. Broken ceiling fans, picture frames, etc can be 'home improvement' ('cause things are gonna keep breaking and needing replacing, it's not something you can bring down to zero without paying in the long run...). Illness, dentist, etc all go under 'medical', with an average monthly budget of what you generally spend. Gifts (Christmas, birthdays, etc), figure out what you can justify per month, put it in the budget, let it accumulate and spend from there.

Let's face it, none of these things are going away. If you think you're spending too much, look at what you wish you'd cut and make that category lower and stick to it (if you're out of money, you can't afford it, period). But home repairs are gonna happen. The occasional trip is gonna happen. Christmas presents are gonna happen. Budget for them. The reason you're over your recurring budget is that these are all expenses that should be (generally) included in your recurring budget!

(Although, really: 120$ for ski lift passes?? I've never been so happy I don't ski...)

mskyle

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #3 on: February 17, 2016, 05:21:16 PM »
Things like Christmas and family birthdays... even the Super Bowl party - they weren't impulse decisions, right? You know these are going to happen regularly. You have to stop thinking of them as "one-time" because they're not one-time.

You're running a tight budget but you're cheating, basically, by not including these things. I notice that you have no budget line for entertainment or activities. For me, that would be unrealistic. Having no budget line for health expenses is unrealistic for most of us as well.

Obviously you aren't going to spend the same amount every month in each of these categories, but you probably don't actually spend exactly the amounts you say per month for restaurants, groceries, and utilities, right, and you've got that figured out. You can either roll over the money for these budget lines or you can pull from one category if you need it for the other - like if you've spent a lot of travel one month, you don't also buy clothes that month.

Add budget lines for clothing, home goods/maintenance (covers things like the plants, fan, and picture frame), health, and entertainment/travel. Oh and gifts! Like I say, you won't spend exactly the same amount in these categories each month, but you will be able to track it better.

(Also I usually roll party expenses into my grocery budget, since that's the main cost. Then I can try and cut costs the rest of the month elsewhere in my grocery budget.)

Personally I don't keep a strict budget but I do set myself a spending/saving goal for the month. If I buy clothes or hobby supplies, I have to say no to a weekend trip or scale back restaurant eating. I know that some bills are non-negotiable (utilities, rent, groceries to a certain extent because I share them with my SO and he is picky) and some are more flexible (clothes, shopping, travel). I try to be frugal leading up to Christmas because I know I'll have to pay for gifts; I have to pay annual dues for an organization I participate in, so I plan for that; I know I need new eyeglasses every couple of years, so I keep that in mind.

JAYSLOL

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #4 on: February 17, 2016, 06:24:38 PM »
Unexpected expenses were a big problem for me in 2015, including an expensive government application fee, financial help to MIL, fried computer, unexpected dental work and an expensive car breakdown.  I've started a new budget that includes long term spending like future dental/optical, travel fund and a car maintenance/replacement fund.  Hopefully the rest really were a one time thing and I'm looking forward to a low cost 2016

Bruised_Pepper

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #5 on: February 17, 2016, 08:19:18 PM »
I use a slush fund for miscellaneous expenses.  Every month I give myself a certain allotment for unbudgeted spending--the same amount every month.  When I use less than the budgeted amount in a month, I put the remaining money into a separate account, the "slush fund".  If I spend more than the monthly allotment, I take the excess out of the slush fund.  It's a good way to smooth your spending over a period of time. It also gives me an incentive to "save" some of the excess miscellaneous money so I can afford to buy something expensive (if I need to) later on without wrecking my budget for that month.

Things like Christmas and family birthdays... even the Super Bowl party - they weren't impulse decisions, right? You know these are going to happen regularly. You have to stop thinking of them as "one-time" because they're not one-time.

I also have a yearly expenses account for subscriptions, vacations, car registration, etc.  At the beginning of the year, I estimate how much they'll all cost for the year, divide that into monthly payments and stash it in a separate account until I need to withdraw to pay for an annual expense.

coolistdude

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #6 on: February 17, 2016, 08:32:38 PM »
I use a slush fund for miscellaneous expenses.  Every month I give myself a certain allotment for unbudgeted spending--the same amount every month.  When I use less than the budgeted amount in a month, I put the remaining money into a separate account, the "slush fund".  If I spend more than the monthly allotment, I take the excess out of the slush fund.  It's a good way to smooth your spending over a period of time. It also gives me an incentive to "save" some of the excess miscellaneous money so I can afford to buy something expensive (if I need to) later on without wrecking my budget for that month.

Things like Christmas and family birthdays... even the Super Bowl party - they weren't impulse decisions, right? You know these are going to happen regularly. You have to stop thinking of them as "one-time" because they're not one-time.

I also have a yearly expenses account for subscriptions, vacations, car registration, etc.  At the beginning of the year, I estimate how much they'll all cost for the year, divide that into monthly payments and stash it in a separate account until I need to withdraw to pay for an annual expense.

There are budgeting tools to help you do this. YNAB has a saving goal function built into it. EveryDollar isn't as easy but it still works. I have a Misc fund, but if there is something I anticipate, I put it into the budget before the month begins. It's okay to spend money, just budget for it. Have a birthday? Plan for it. I'm preaching to me too. I've gotten lazy recently.

MMMdude

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #7 on: February 17, 2016, 08:39:17 PM »
For myself i have three buckets of costs.  Recurring costs, variable and discretionary.

Recurring is like it sounds - basic costs to live that happen each month.  Variable are ones that vary year to year - stuff like major house expenses, dental, medical, vet care, auto repair, etc.  You know that they exist but in varying quantities each year.  I budget $6,000 per year for that stuff.

 Discretionary is similar to variable except that they can be kept at zero if one is so inclined.  So that is stuff like travel, hobbies, etc.

It's vital these costs are quantified and incorporated into your calcs

dess1313

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #8 on: February 17, 2016, 10:41:55 PM »
okay  you're missing some categories in your budget it looks like.  just because you may not spend it today doesn't mean you can't start saving it now.  i have an excel sheet i keep track of my little categories in.
 
you should have a gift category.  for example, start saving for christmas now, even if its $20 a month.  that way by the time you get to christmas you already have it saved.  christmas isn't a unexpected thing.  it comes back at the same time every year.  can also save for important birthdays this way.

gotta have a category for clothing.  you'll need new socks one day.  again, let it pile up and accumulate for times when you need a bigger item like winter jacket

i have a reno/repair budget for my house.  soemthing like your broken fan would fall into that.  or the fridge if it goes.  etc  doesn't have to be a lot a month, but i let it build up for when a larger repair is needed

need to save a little for medical costs.  we all get sick

i have a fun/vacation line as well, that would cover things like weekend trips, ski trips, vacations etc. 

i also have a random shit category i put $50 into.  it covers those odd things that aren't elsewhere.  this can be just about anything depending on the month






Noodle

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #9 on: February 17, 2016, 10:48:04 PM »
Well, I do suggest separating your non-recurring expenses into necessities and "fun" spending. Lift tickets and paying a traffic ticket don't really belong in the same budget line, because you don't have control over the second group. For fun, you can pretty much decide how much you want to spend per month, and then allot as opportunities arise (you could even do envelopes etc if you liked).

For the necessities, I'm still working on that. Some people keep costs down by dragging out purchases that aren't emergencies...so for the ceiling fan they would look for a long time at clearance racks or salvage stores before buying retail. Others stockpile things in categories they are likely to need coming up (the author of The Tightwad Gazette had, I think, six kids so as she got the opportunity to pick up kids' clothes cheaply, she stockpiled knowing that some kid would grow into the clothes eventually.) Neither of those tactics work all that well for me, so I go the "buy it for life"/minimalist route...I have a tiny condo and just don't need that much stuff; when I do, I research online and try to find an item that hits a good balance between cost and quality. The expenses I don't have control over (doctor visits, city fees and taxes), I just don't worry about. My overall earning/spending has plenty of wiggle room to accommodate those. If they were particularly high in a given month, I'd dial back the "fun" spending, but that is fairly rare.
« Last Edit: February 17, 2016, 10:50:21 PM by Noodle »

dinkhelpneeded

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #10 on: February 18, 2016, 07:04:23 AM »
I always struggled with this as well - and I have a follow up question to those who said budget those items in.

For example: If I paid $20 in each month to christmas gift budget, that money stays in the account, and doesnt get used- is that the idea?
Or do you then at the end of the month move that $20, to another account or something of that kind?

Where it gets complicated for me is, if I had christmas gifts and vacation and x, y and z all of which I budgeted, but are all in the same bucket of money/same account, wont the math get messed up?
Wont it especially get messed up if you overspend say $20 on gifts and underspend on another category?


Kitsune

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #11 on: February 18, 2016, 07:23:04 AM »
I always struggled with this as well - and I have a follow up question to those who said budget those items in.

For example: If I paid $20 in each month to christmas gift budget, that money stays in the account, and doesnt get used- is that the idea?
Or do you then at the end of the month move that $20, to another account or something of that kind?

Where it gets complicated for me is, if I had christmas gifts and vacation and x, y and z all of which I budgeted, but are all in the same bucket of money/same account, wont the math get messed up?
Wont it especially get messed up if you overspend say $20 on gifts and underspend on another category?

I use YNAB, so how it works is that I have two actual accounts (chequings and savings, basically), but I have like 20 budget categories. So for Christmas presents, for example, I "budget" 50$/month. The money accumulates until Christmas, at which point it get spent. Same for car repairs, or house maintenance, or anything that isn't an everyday spending but that you're gonna need a lump sum for at some point in the semi-near future. I also have a "savings" category, which is he money we plan to put into savings (25% of our income, currently).. At the end of the month, I move all the $ left in chequings to an easily-accessible savings account, but only invest my "savings" amount that I've budgeted. Basically, I keep aside in an accessible place the money that's earmarked for certain purposes.

This means that I always save at least the amount I plan to save, but also that I have money set aside for large planned expenses.

GardenFun

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #12 on: February 18, 2016, 07:23:38 AM »
I always struggled with this as well - and I have a follow up question to those who said budget those items in.

For example: If I paid $20 in each month to christmas gift budget, that money stays in the account, and doesnt get used- is that the idea?
Or do you then at the end of the month move that $20, to another account or something of that kind?

Where it gets complicated for me is, if I had christmas gifts and vacation and x, y and z all of which I budgeted, but are all in the same bucket of money/same account, wont the math get messed up?
Wont it especially get messed up if you overspend say $20 on gifts and underspend on another category?

Depends on how likely you are to spend the money if it is in your general account.  Do what works for you - it could be physically moving the money into a different bank account, putting the money into a Christmas envelope every month/paycheck, or leaving it in the general account but marking it as "spent" on your budget tracking tool.  I have used various versions of all three methods listed above for different reasons - vacations, Christmas, auto repair, etc. 

To build off of Bruised_Pepper's slush fund idea, I currently have a Capital Expenditure section of our budget.  Vacations, Car Repair, Unplanned Expenses, and Home Improvement have yearly allotments assigned.  Since spending in these items is not consistent month to month, removing them from the monthly "budget" enables me to focus on controlling repeating expenses, without saying "Oh crap, I had a $300 car repair this month.  February budget is blown so screw it, I'm going to just spend/party this month."

This system also works because we receive bonuses/tax returns/monetary Christmas gifts January-March.  That money is used to fund the Capital Expenditures. 
 

NonprofitER

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #13 on: February 18, 2016, 08:05:23 AM »
We do our budget in excel - I just prefer it - and in addition to our monthly bills, we track our "variable" expenses in these categories, which avoids the dreaded "misc" category that things get lost in.  A lot of MMMrs stop tracking budgets in general and just abide by the "don't buy anything" motto, but I like having the information in retrospect at years' end and comparing years, etc.  This is our third year using these categories and they work well for us. 

We have some sinking funds in CapitalOne360 that align with some of these categories (like travel and home repairs), and an HSA for the health related expenses, but most things get cash-flowed because in general, we don't overspend anymore. But I credit that in part to keeping these more specific categories, because its easy to see when you're spending too much on something and be more mindful of that area in future months. IE, "We spent XYZ doing optional home upgrades last year, but we really need to tackle that ultra boring home maintenance issue this year... so let's not buy anything optional for the house this year." 

Out to Eat - seperate from groceries, since we only go out if we're with friends, doing a happy hour with workmates, etc.
Entertainment
Home Projects (Optional) - things that we opted to do/buy/upgrade, but didn't have to
Home Repairs (Not Optional) - IE, an urgent or semi-urgent repair
Car Expenses - repairs, new tires, etc.
Child related expenses - things like field trip fee, swim lessons once a year, etc.
Xmas/ Gifts/ Seasonal - gifts to others, family Xmas costs, seasonal activities we do as a family (like pumpkin patch, hosting seasonal brunches, etc.)
Haircuts/Optional Self - haircuts for the whole family, occasional makeup or optional splurge
Clothing
Annual Expenses - things that come up once a year or annually, like Costco/Amazon subscriptions, etc.
Work Related Expenses - things we itemize or write off related to business or contracting income
Medical
Vacations/Travel
Charitable giving
Other goods (optional) - actual things we bought, like new headphones, a lamp, etc. 
« Last Edit: February 18, 2016, 08:09:49 AM by NonprofitER »

golden1

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #14 on: February 18, 2016, 09:15:02 AM »
I basically divide my budget into three categories.

1) Recurring expenses - checking account
2) Savings - Automatically withdrawn from checking into savings twice a month
3) Flexible expenses - I use a reward CC for this and keep careful note of my balance on a daily basis.  I pay it off each month. 

I basically have a set amount for flex expenses every month, and it I go under, I put the excess into savings.  If I go over, I take some from savings for that month. 

This year has been a kick in the pants for me so far.  $1700 in unexpected home repairs has meant that I have put virtually nothing into savings this month.  However, I know that some months I will spend less than my flex budget allows and be able to put extra in.  I'm praying that March is kind to me.  :)

dess1313

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #15 on: February 18, 2016, 04:34:41 PM »
I always struggled with this as well - and I have a follow up question to those who said budget those items in.

For example: If I paid $20 in each month to christmas gift budget, that money stays in the account, and doesnt get used- is that the idea?
Or do you then at the end of the month move that $20, to another account or something of that kind?

Where it gets complicated for me is, if I had christmas gifts and vacation and x, y and z all of which I budgeted, but are all in the same bucket of money/same account, wont the math get messed up?
Wont it especially get messed up if you overspend say $20 on gifts and underspend on another category?

yes, you set the money aside in some way until it is time to use it.

I have a online bank where i can keep many piles/accounts of money for all the different categories(with no fees involved).  Some i know have labeled jars at home they put the $ into.  some have a multi-file folder, some use envelopes.  a Plano fishing tackle box works well too with all the dividers.  its what works best for you and keeps you organized

For my house account i have several categories in one checking account but i keep the order straight with an excel sheet.

dinkhelpneeded

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #16 on: February 18, 2016, 10:53:24 PM »
I always struggled with this as well - and I have a follow up question to those who said budget those items in.

For example: If I paid $20 in each month to christmas gift budget, that money stays in the account, and doesnt get used- is that the idea?
Or do you then at the end of the month move that $20, to another account or something of that kind?

Where it gets complicated for me is, if I had christmas gifts and vacation and x, y and z all of which I budgeted, but are all in the same bucket of money/same account, wont the math get messed up?
Wont it especially get messed up if you overspend say $20 on gifts and underspend on another category?

yes, you set the money aside in some way until it is time to use it.

I have a online bank where i can keep many piles/accounts of money for all the different categories(with no fees involved).  Some i know have labeled jars at home they put the $ into.  some have a multi-file folder, some use envelopes.  a Plano fishing tackle box works well too with all the dividers.  its what works best for you and keeps you organized

For my house account i have several categories in one checking account but i keep the order straight with an excel sheet.

Can I ask which bank this is? Sounds like that would work for me.

Ebrat

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #17 on: February 19, 2016, 06:49:39 AM »
I always struggled with this as well - and I have a follow up question to those who said budget those items in.

For example: If I paid $20 in each month to christmas gift budget, that money stays in the account, and doesnt get used- is that the idea?
Or do you then at the end of the month move that $20, to another account or something of that kind?

Where it gets complicated for me is, if I had christmas gifts and vacation and x, y and z all of which I budgeted, but are all in the same bucket of money/same account, wont the math get messed up?
Wont it especially get messed up if you overspend say $20 on gifts and underspend on another category?

yes, you set the money aside in some way until it is time to use it.

I have a online bank where i can keep many piles/accounts of money for all the different categories(with no fees involved).  Some i know have labeled jars at home they put the $ into.  some have a multi-file folder, some use envelopes.  a Plano fishing tackle box works well too with all the dividers.  its what works best for you and keeps you organized

For my house account i have several categories in one checking account but i keep the order straight with an excel sheet.

Can I ask which bank this is? Sounds like that would work for me.

You can open a bunch of savings accounts at Capital One 360 (formerly ING) and nickname them.  I have 3 right now, but I've heard people say they have a lot more than that.  I can't remember what the max is (but pretty sure it's double digits).

Melody

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #18 on: February 19, 2016, 07:39:12 AM »
Ultimately there are only three buckets - "want", "need" and "save", assign values to these buckets and work on a longer (fortnightly or monthly) cycle. I give myself a free reign (within reason) on needs - I may not have planned to need a plumber but I need one and it will be paid for. I will still try to meet my savings target, so I will generally cut wants in that month. I also just focus on "value" and savings goals rather than what I spend on wants. So each want is scrutinised - is it the best use of money> Does it provide maximum joy? rather than having a fixed bucket. I try to keep wants as low as possible without feeling sad :-)

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #19 on: February 19, 2016, 08:29:46 AM »

Ultimately there are only three buckets - "want", "need" and "save"

I just had two buckets: "spending" was the default, and anything that didn't get spent got moved over to the "investing" bucket.

Now that we're FIRE the latter bucket is gone, and it's just a "spending" bucket. :)
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dess1313

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Re: Budgeting - the dreaded miscellaneous expenses
« Reply #20 on: February 19, 2016, 09:11:22 AM »
I use https://www.tangerine.ca/en/index.html
 
if you do want to set up with them, they have promos that referring new customers means you get bonuses to both parties.  let me know if you do

its canadian but i am sure there are other online banks following in its foot steps if you're not canadian.  I do one large drop into it, then separate and divide it up among the accounts.  I find it keeps it handy but just slightly out of reach.  out of reach means out of temptation for me