It’s Friday! It’s been a crazy busy week with very little sleep in our house. I know teething is a breeze for some babies, but Sally’s not one of them, and she’s currently getting her molars. Yesterday morning we were all up at 5:00. Nooo. So while my New Year’s resolution of going to bed early isn’t going so hot, Johnny’s resolution of getting up early is going splendidly. Thanks, Sal!
Although January’s already proving to be a tad crazy, Johnny and I took the time one night last week to hash out our 2014 budget. In the past, we’ve always talked generally about what we expect the year to entail, and then we plan our budget one month at a time. But this year, on top of planning a monthly budget, we also decided to plan one ginormous budget for the entire year. And so we sat down and talked out every single discretionary expense we plan to see in 2014. It looked a little like this:
Budget Details in 2014 (Discretionary Expenses)
- Gifts for Others: grand total we plan to spend on birthdays, Mother’s and Father’s Days, and Christmas for our families
- Gifts for Ourselves and Sally: grand total we plan to spend on birthdays, Mother’s and Father’s Days, Christmas, and our anniversary
- Everything Else: yearly expected total for our “Everything Else” category (we calculated this by writing out how much we expect to spend on the following categories each month, added it all together, and then multiplied it by 12)
- Home & personal care
- Baby Supplies
- Persie (our cat)
- Dry cleaning
- Vacations: grand total we plan to spend on our main vacation as well as any day trips or weekend getaways
- Personal & Clothing: grand total Johnny and I budgeted for ourselves to spend on clothing and any other wants this year
We then calculated the following expected figures for 2014:
- Total take-home (net) pay – Total non-discretionary expenses (consistent expenses such as rent, utilities, tithing, etc.) – Total discretionary expenses = Total savings
Math! And that’s that.
Some things of note:
- We decided to calculate the yearly totals for our discretionary spending because it’s not something we can really plan for on a month-to-month basis. That said, we know how much we’d like to spend in those areas for the entire year. So in our budgeting app on our phones, each discretionary category (vacations, gifts, etc.) has a yearly total. We then divide those totals by 12 and we’re given a set amount each month, which rolls over if it isn’t used. It’s similar to working at a job where your vacation time accrues throughout the year. The total for the year is X amount, and you can use it all in January if you’d like, but it won’t fully accrue until December. Make sense?
- Last year, we gave ourselves monthly personal spending ($25 each) and then had clothing as part of our Everything Else category. And then twice a year we’d have seasonal mini-shopping sprees for clothing with an agreed upon allowance for each of us. This year, we decided to each have one combined Personal & Clothing budget from which we can spend at any time throughout the year. It makes that spending feel a little less constrained, while also helping us plan all of it in advance.
So that’s how we’ve planned out our 2014 moneys. This is the first year we’ve created an all-encompassing budget for the year, and we’re really excited! We’re easily excitable or just reallllly boring. By having the entire year planned out, I think we’ll be more motivated in the day-to-day and month-to-month since we know where we’d like to be at the finish line — December 31, 2014.
How about you? What are your budgeting plans for 2014? We love hearing how others do this budgeting thang!